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