Question :
65) The term “market” in economics refers to
A) a place : 1387249
65) The term “market” in economics refers to
A) a place where money changes hands.
B) a legal institution where exchange can take place.
C) a group of buyers and sellers of a product and the arrangement by which they come together to trade.
D) an organization which sells goods and services.
66) Economists assume that
A) individuals behave in unpredictable ways.
B) consumer behavior is explained by the existence of unlimited resources.
C) people put other people’s interests ahead of their own.
D) optimal decisions are made at the margin.
67) Which of the following best describes an assumption economists make about human behavior?
A) They assume that individuals act rationally all the time in all circumstances.
B) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.
C) They assume that people take into account the question of fairness in all decisions they make.
D) They assume that individuals act randomly.
68) Economists assume that rational people
A) never use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) only weigh the benefits and costs of the most desirable alternative actions.
D) respond to economic incentives.
69) Your roommate Serafina, a psychology major, said, “The problem with economics is that it assumes that consumers and firms always make the correct decision. But we know that everyone’s human, and we all make mistakes.” Do you agree with her comment?
A) Yes, I agree with her. One cannot make predictions about economic behavior because in reality people make incorrect choices in many situations.
B) I disagree with her. Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave rationally, meaning they make the best decisions given their knowledge of the costs and benefits.
C) Yes, I agree with her. Economic theory should allow for irrational behavior so that we can have more reliable predictions.
D) I disagree with her. If we cannot assume that decisions are correct, then we will not be able to examine the moral implications of these decisions.
70) Consider the following statements:
a. Consumers rent more DVDs from a video store that rents DVDs at a lower price than other rival video stores in the area.
b. Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment.
c. Farmers produce more cotton when its selling price falls.
Which of the above statements demonstrates that economic agents respond to incentives?
A) a only
B) b only
C) c only
D) a and b
E) a, b, and c
71) In the first six months of 2003, branches of Commerce Bank in New York City were robbed 14 times. The New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called “bandit barriers.” The police were surprised the bank did not take their advice. According to a deputy commissioner of police, “Commerce does very little of what we recommend. They’ve told our detectives they have no interest in ever putting in the barriers.”
It would seem that Commerce bank would have a strong incentive to install “bandit barriers” to deter robberies. Why wouldn’t they do it?
A) The banks would rather delay installation of any theft deterring equipment in anticipation of new lower cost innovations in the security devices market.
B) The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have “no interest in ever putting in the barriers.”
C) The banks are concerned that “bandit barriers” would send the wrong message to customers — that the bank is unsafe.
D) The banks probably resent any interference from the police department.
72) Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that
A) people without health insurance will be less likely to be overweight than people with health insurance.
B) people without health insurance will be more likely to be overweight than people with health insurance.
C) people without health insurance will be equally likely to be overweight as people with health insurance.
D) there is no correlation between not having health insurance and being overweight.
73) According to the Centers for Disease Control and Prevention, ________ in 2013 in which less than 20 percent of the population was considered obese.
A) Colorado was the only state
B) there were only 5 states
C) there were more than 25 states
D) there were no states
74) What does the term “marginal” mean in economics?
A) the edge of a market
B) an additional or extra
C) illegal
D) secondary
E) trivial
