Microeconomic Principles A Contemporary Introduction International Edition 8th Edition by William A. McEachern – Test Bank

MULTIPLE CHOICE

1. An author who writes newspaper columns for $75 each is deciding whether to purchase a personal computer with a laser printer. She figures she’d be able to write two more columns per month than she could on her typewriter. She should
a. buy the computer if the monthly payment is less than $300
b. buy the computer regardless of its price
c. not buy the computer if the monthly payment is greater than $75
d. not buy the computer regardless of the price
e. buy the computer if the monthly payment is less than $150

ANS: E PTS: 1 DIF: Moderate NAT: Analytic
LOC: Marginal costs & benefits TOP: Resource Demand

2. Resource owners will supply additional units of a resource as long as
a. doing so increases their costs
b. doing so increases production
c. the quantity of the resource demanded exceeds the resource price
d. resource users demand the resource
e. doing so increases their utility

ANS: E PTS: 1 DIF: Easy NAT: Reflective Thinking
LOC: Marginal costs & benefits TOP: Resource Supply

3. Resource owners supply resources in ways that
a. maximize their utility
b. maximize their income
c. minimize the amount of work
d. maximize the amount of work
e. maximize the demand for their resource

ANS: A PTS: 1 DIF: Easy NAT: Analytic
LOC: Supply and demand TOP: The Demand and Supply of Resources

4. Resource owners will supply additional units of a resource as long as doing so
a. decreases their opportunity cost
b. increases their income
c. increases their utility
d. decreases their income taxes
e. improves their working conditions

ANS: C PTS: 1 DIF: Moderate NAT: Analytic
LOC: Supply and demand TOP: The Demand and Supply of Resources

5. The resource market is different from the product market because
a. in the resource market, firms don’t maximize profit
b. in the resource market, households don’t maximize utility
c. in the resource market, firms are demanders and households are suppliers
d. supply and demand do not apply in the resource market
e. supply and demand do not apply in the product market

ANS: C PTS: 1 DIF: Easy NAT: Analytic
LOC: Supply and demand TOP: The Demand and Supply of Resources

6. An increase in the demand for shoemakers will increase the demand for shoes.
a. True
b. False

ANS: B PTS: 1 DIF: Moderate NAT: Reflective Thinking
LOC: Labor markets TOP: The Market Demand for Resources

7. An increase in the price of a resource will cause a movement along the demand curve for that resource.
a. True
b. False

ANS: A PTS: 1 DIF: Easy NAT: Reflective Thinking
LOC: Supply and demand TOP: The Market Demand for Resources

8. The demand for a resource is derived from the demand for the final product it helps to produce.
a. True
b. False

ANS: A PTS: 1 DIF: Easy NAT: Analytic
LOC: Supply and demand TOP: The Market Demand for Resources

9. In the resource market, firms demand resources in order to
a. maximize profit
b. maximize total revenue
c. maximize marginal revenue
d. maximize utility
e. minimize cost

ANS: A PTS: 1 DIF: Easy NAT: Analytic
LOC: Supply and demand TOP: The Market Demand for Resources

10. As the price of a resource (e.g., labor) decreases,
a. demand for that resource increases
b. the quantity demanded of that resource decreases
c. the supply of that resource increases
d. producers are more willing and able to hire that resource
e. producers are less willing and able to hire that resource

ANS: D PTS: 1 DIF: Moderate NAT: Analytic
LOC: Supply and demand TOP: The Market Demand for Resources