The economic way of thinking includes:Question 23Select one:a.attention paid to the opportunity costs involved in any choice.b.the assumption that individuals choose to average out some objective.c.concern with the biological make up of decision makers.d.emphasis on how choices affect total values rather than marginal values.

10.The economic perspective entails (1 Point)irrational behavior by individuals and institutions.a comparison of marginal benefits and marginal costs in decision making.short-term but not long-term thinking.rejection of the scientific method.11.Purposeful behavior suggests that (1 Point)everyone will make identical choices.resource availability exceeds economic wants.individuals may make different choices because of different desired outcomes.an individual's economic goals cannot involve trade-offs.12.Economics involves marginal analysis because (1 Point)most decisions involve changes from the present situation.marginal benefits always exceed marginal costs.marginal costs always exceed marginal benefits.much economic behavior is irrational.13.You should decide to go to a movie(1 Point)if the marginal cost of the movie exceeds its marginal benefit.if the marginal benefit of the movie exceeds its marginal cost.if your income will allow you to buy a ticket.because movies are enjoyable.14.You should decide to go to a movie (1 Point)if your income will allow you to buy a ticket.if the marginal cost of the movie exceeds its marginal benefit.because movies are enjoyable.if the marginal benefit of the movie exceeds its marginal cost.15.Opportunity costs exist because (1 Point)the decision to engage in one activity means forgoing some other activity.wants are scarce relative to resources.households and businesses make rational decisions.most decisions do not involve sacrifices or trade-offs.16.The assertion that "there is no free lunch" means that (1 Point)there are always trade-offs between economic goals.all production involves the use of scarce resources and thus the sacrifice of alternative goods.marginal analysis is used in economic reasoning.choices need not be made if behavior is rational.17.Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase. This is a reflection of (1 Point)resource scarcity and the necessity of choice.purposeful behavior.marginal costs that exceed marginal benefits.the trade-off problem that exists between competing goals.18.If a firm produces too little of a particular good, this would suggest that (1 Point)rational choice cannot be applied to many economic decisions.the good is being produced at a point where marginal costs exceed marginal benefits.government should intervene to produce more of the good.the good is being produced at a point where marginal benefit exceeds marginal cost.19.In deciding whether to study for an economics quiz or go to a concert, one is confronted by the idea(s) of (1 Point)scarcity and opportunity costs.money and real capital.complementary economic goals.full production.20.Which one of the following expressions best states the idea of opportunity cost? (1 Point)"A penny saved is a penny earned.""He who hesitates is lost.""There is no such thing as a free lunch.""All that glitters is not gold."

Financial executives in business firms use the "economic way of thinking" when they conduct cost/benefit analyses about financial decisions for their organizations. Which of the following is an example?Group of answer choicesAll of these are examples.Should we raise money for firm expansion through debt or equity?Should we raise money for expansion by issuing bonds or selling stock?Should we increase salaries or offer stock options to retain the best of our employees?Should we reinvest our profits back into the firm for growth or pay it out as dividends to our shareholders?

Economics may best be defined as the (1 Point)interaction between macro and micro considerations.social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.empirical testing of value judgments through the use of logic.study of why people are rational.

21.Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates (1 Point)distorted priorities.opportunity costs.increasing opportunity costs.productive efficiency.22.Economists contend that most economic decisions are (1 Point)random.irrational.spontaneous.purposeful.23.Economics is a social science that studies how individuals, institutions, and society may (1 Point)expand the amount of resources available to them.attain a minimum level of production.best use resources to maximize satisfaction of economic wants.reduce the amount of goods and services they need.24.The basic truth that underlies the study of economics is the fact that we all face (1 Point)death.taxes.risk.scarcity.25.A recurring theme in economics is that people (1 Point)have unlimited resources but limited economic wants.can increase resources by limiting their economic wants.have limited economic wants and limited resources.have unlimited economic wants but limited resources.26.As a consequence of the problem of scarcity, (1 Point)there is never enough of anything.individuals have to make choices from among alternatives.only some people can "have it all."things which are plentiful have relatively high prices.27.Which of the following is a distinguishing feature of a command system? (1 Point)private ownership of all capitalcentral planningheavy reliance on marketswidespread dispersion of economic power28.Which of the following is a feature of a command system? (1 Point)a legal envirnoment that protects private propertygovernment's role is very limitedgovernment owns most property resourcesconsumer sovereignty29.Which of the following is a distinguishing feature of laissez-faire capitalism? (1 Point)public ownership of all capitalcentral planningminimal government interventionan economy based on bartering30.Which of the following is a feature of laissez-faire capitalism? (1 Point)people are free to interact in markets to buy and sell goods and servicesgovernment enforces the economic planbusiness firms rely on the government for their resourcespublic ownership of all capital31.Examples of command economies are(1 Point)the United States and Japan.Sweden and Norway.Mexico and Brazil.Cuba and North Korea.

Economics is the study of howGroup of answer choicessociety manages its scarce resources.society manages its unlimited resources.to avoid having to make trade-offs.to fully satisfy our unlimited wants.