Microeconomics is the branch of economics that deals with which of the following topics?
A. The behavior of individual consumers
B. Unemployment and interest rates
C. The behavior of individual firms and investors
D. B and C
E. A and C
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A Rolling Stones song goes: "You can't always get what you want." This echoes an important theme from microeconomics. Which of the following statements is the best example of this theme?
A. Consumers must make the best purchasing decisions they can, given their limited incomes.
B. Workers do not have as much leisure as they would like, given their wages and working conditions.
C. Workers in planned economies, such as North Korea, do not have much choice over jobs.
D. Firms in market economies have limited financial resources.
Economics is about the allocation of scarce resources. Which of the following is NOT an example of economic scarcity?
A. If Steve goes to see a movie on Saturday, he will not be able to afford buying ice cream.
B. If Jenny studies for her economics quiz this evening, she will not have time to walk her dog.
C. If General Motors increases its production of SUVs this year, it will have to spend more on advertising.
D. If Barnes and Noble bookstore increases the number of titles it carries, it will have to reallocate shelf space to accommodate the new titles.
Use the following two statements to answer this question: I. Economic theories are developed to explain observed phenomena by deducing from a set of basic rules and assumptions. II. Economic theories use value judgments to determine which people ought to pay more taxes.
A. Both I and II are true.
B. I is true, and II is false.
C. I is false, and II is true.
D. Both I and II are false.
Which of the following is a normative statement?
A. The taxes paid by the poor should be reduced in order to improve the income distribution in the U.S.
B. State governments should not subsidize corporations by training welfare recipients.
C. Presidential candidates should not be given funds from the federal government to run campaigns.
D. The sea otter should not be allowed to spread into Southern California coastal waters, because it will reduce the value of fisheries.
E. all of the above
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