Test Bank For Fundamentals of Economics 5th Edition By William Boyes
Chapter 1—Economics and the World Around You
MULTIPLE CHOICE
- Which of the following is a reason to study economics?
| a. | Economic analysis explains daily events. |
| b. | It helps us understand why people, firms and government behave in a certain way. |
| c. | We need to understand relevant economic applications and policy issues. |
| d. | It provides useful logic for solving complex problems. |
| e. | All of these |
ANS: E PTS: 1 DIF: Easy REF: Ch 1, Section 1: Preface
OBJ: 1.1 TOP: Economics TYP: Factual
- According to the text, why are some countries rich and others very poor?
| a. | Some countries have no oil. |
| b. | People have no property rights. |
| c. | Access to education is very limited. |
| d. | High tariffs prevent international trade. |
| e. | All of these. |
ANS: B PTS: 1 DIF: Medium REF: Ch 1, Whole chapter
OBJ: 1.1 TOP: Wealth TYP: Factual
- The primary reason to explain why some nations are rich and others poor is
| a. | A democratic government |
| b. | A strong judicial system |
| c. | Access to education |
| d. | Private ownership |
| e. | A stable currency |
ANS: D PTS: 1 DIF: Medium REF: Ch 1, Section 1: Ownership
OBJ: 1.1 TOP: Wealth TYP: Factual
- It can be said that ____ laid the foundation for the Industrial Revolution.
| a. | the discovery of the Americas |
| b. | private property rights |
| c. | the invention of the cotton gin |
| d. | the discovery of gold |
| e. | the development of a strong judicial system |
ANS: B PTS: 1 DIF: Medium REF: Ch 1, Section 1: Ownership
OBJ: 1.1 TOP: Private property rights TYP: Factual
- Private property rights are important because
| a. | they create incentives for people to improve their standard of living. |
| b. | the Constitution says so. |
| c. | they allow students to choose their major field of study in college. |
| d. | an economy cannot grow without them. |
| e. | all of these |
ANS: A PTS: 1 DIF: Medium REF: Ch 1, Section 1: Ownership
OBJ: 1.1 TOP: Private property rights TYP: Factual
