10. What is the fundamental difference between macroeconomics and microeconomics? A) Macroeconomics involves studying the economy as a whole, while microeconomics involves studying the behavior of individual industries, firms, and households. B) Macroeconomics concentrates on those parts of the economy involving very large amounts of money, while microeconomics concentrates on those parts of the economy involving small sums of money. C) Macroeconomics studies the behavior of large firms, while microeconomics studies the behavior of small firms. D) There is no difference, basically macroeconomics and microeconomics are one and the same. E) None of the above.11. What is the best definition of an economic good? A) Goods that are very expensive. B) Goods that are in scarce or limited supply. C) Goods that a country produces and then trades to another county. D) Goods that are vital to an individual's welfare. E) None of the above. 12. Which of the following would be considered a free good? A) Fresh water. B) Forests in the northwestern United States. C) The advice of economists. D) All the above. E) None of the above. 13. Which of the following may have been considered a free good today? A) Land. B) Cattle. C) Computers. D) Air. E) None of the above. 14. Which of the following is the most basic of the subjects with which the study of economics must try to deal? A) Markets. B) Money. C) Profit seeking. D) The price mechanism. E) Scarcity.15. "Scarcity" in economics refers basically to: A) periods of famine. B) monopolization of existing supplies of goods. C) monopolization of resources to provide goods. D) monopolization of outlets to sell goods. E) none of the above. Answer: E Difficulty: Easy Topic: Definition Bloom's: Knowledge AACSB: Reflective Thinking 16. "Distribution" in economics refers to: A) retailing, wholesaling, and transportation. B) what. C) how. D) for whom E) none of the above.17. The main difference between a free good and an economic good is that: A) it is not produced. B) no one desires any amount. C) it is not tradable. D) it is not scarce. E) none of the above. 18. The three questions of what, how, and for whom: A) relate to the three factors of production. B) exist because of scarcity. C) are more of a problem in a market economy. D) are more of a problem in a command economy. E) are no longer relevant. 19. A market economy is: A) one in which a government makes all the important production and consumption decisions. B) one in which individuals and private firms make the major production and consumption decisions. C) one in which only one person makes all the important production and consumption decisions. D) none of the above. 20. The U.S. is considered to be a mixed economy: A) due to the combination of capital goods and consumption goods that it produces. B) due to the increasing diversity of members of its labor force. C) because of the government's involvement in the market system. D) for all the above reasons. E) none of the above.21. Which of the following statements relates to the concept of efficiency? A) The absence of waste. B) Using resources as effectively as possible. C) Being able to produce more of one good only by producing less of something else. D) B and C only. L E) All of the above. 22. The twin themes that form the basis of the definition of economics are: A) supply and demand. B) inflation and unemployment. C) scarcity and efficiency. D) inputs and outputs. E) price and quantity.23. If you stand up at a concert to get a better view, your view may not improve because everyone in front of you may stand up too. This situation is an example of: A) the post hog fallacy. B) the failure to hold other things constant. C) the fallacy of composition D) a zero-sum game. E) what happens when you purchase cheap tickets. The description of economics as. \"cool heads in the service of warm hearts" means that: A) allocating scarce resources may require painll decisions. B) costs and benefits need to be weighed objectively. C) the proper balance must be struck between the discipline of the 111a1'bet and the generosity of the welfare state. D) all ofthe above. E) none of the above. Which of the following would be considered a positive economic statement? A) Lowering taxes will help the poor. B) Lowering taxes will hurt the poor. C) The rich are getting richer. and the poor are getting poorer. D) All ofthe above. E) None of the above. Normative economics refers to: A) economic policies that are in effect when ination and unemployment are at their normal levels. B) tax programs aimed at the middle class leads to more ination. C) economic programs that have been in place for five or more years. D) economic statements with a value judgment of what ought to be, or what should be. E) both statements A) and B)