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Essentials of Economics 3rd Edition Brue Test Bank 1
Essentials of Economics 3rd Edition Brue Test Bank 1
Essentials of Economics 3rd Edition Brue Test Bank 1
[QUESTION]
1. Market failures occur when:
A. the government sets price floors and ceilings.
B. the competitive market system under- or overallocates resources to production of goods.
C. there are no externalities.
D. goods are rival in consumption.
Answer: B
Difficulty: 1 Easy
Topic: Market failure
Learning Objective: 05-01
Blooms: Remember
AACBS: Analytic
[QUESTION]
2. When the competitive market system does not allocate resources to economically desirable
goods, economists say what has occurred?
A. Market failure
B. Government failure
C. Externalities
D. Productive inefficiency
Answer: A
Difficulty: 2 Medium
Topic: Market failure
Learning Objective: 05-01
Blooms: Remember
AACBS: Analytic
[QUESTION]
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
3. Suppose that people want bike paths through town, but no private individual or business is
willing to build it. This is an example of:
A. negative externalities.
B. government failure.
C. market failure.
D. productive inefficiency.
Answer: C
Difficulty: 2 Medium
Topic: Market failure
Learning Objective: 05-01
Blooms: Apply
AACBS: Analytic
[QUESTION]
4. Which of the following is the best example of market failure?
A. Lucian wants more video games but doesn’t buy them because his willingness to pay is less
than the equilibrium price in the market.
B. Kara’s Kitten Shop won’t sell more purebred cats because the equilibrium price in the market
is less than it would cost her to provide more.
C. Alex and others in a community want a new outdoor soccer field and are willing to pay to use
it, but no private business is willing to build it.
D. Government fixes the price of gasoline, resulting in a shortage.
Answer: C
Difficulty: 2 Medium
Topic: Market failure
Learning Objective: 05-01
Blooms: Apply
AACBS: Analytic
[QUESTION]
5. From the economist’s perspective, “market failures” basically arise when:
A. the quantity demanded for a good or service is greater than the quantity supplied of the good
or service.
B. the quantity supplied of a good or service is greater than the quantity demanded for a good or
service.
C. demand and supply do not accurately reflect all the benefits and all the costs of production.
D. the market system is unable to adapt to or to accommodate change.
Answer: C
Difficulty: 3 Hard
Topic: Market failure
Learning Objective: 05-01
Blooms: Remember
AACBS: Analytic
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
[QUESTION]
6. Which is an example of a market failure?
A. There are not enough tickets available to concerts of extremely popular performers.
B. The price of medical care has risen dramatically as a result of the introduction of sophisticated
equipment and techniques.
C. Polio shots and chest x-rays provide widespread benefits to the community as a whole as well
as to the individuals who get them.
D. Extensive decreases in the prices of electronic equipment resulted in large numbers of
bankruptcies in the computer industry.
Answer: C
Difficulty: 3 Hard
Topic: Market failure
Learning Objective: 05-01
Blooms: Apply
AACBS: Analytic
[QUESTION]
7. Private goods are characterized by:
A. rivalry and excludability.
B. rivalry and nonexcludability.
C. nonrivalry and excludability.
D. nonrivalry and nonexcludability.
Answer: A
Difficulty: 1 Easy
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
8. Which of the following is most likely to be a private good?
A. Road
B. Bicycle
C. Park
D. City fireworks display
Answer: B
Difficulty: 1 Easy
Topic: Private goods
Learning Objective: 05-02
Blooms: Apply
AACBS: Analytic
[QUESTION]
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
9. “Rivalry” in consumption means that:
A. there are multiple sellers of the good.
B. there are many buyers of the good.
C. a buyer may purchase goods from multiple sellers.
D. when one person buys a good, it is not available for another person to buy.
Answer: D
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
10. “Excludability” means that:
A. sellers can restrict the benefits of a good to those who pay for it.
B. buyers can restrict other buyers from making purchases in that market.
C. when one person buys a good, it is not available for others to buy.
D. government can prevent consumers from buying the good.
Answer: A
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
11. For which of the following goods would you most likely observe the characteristic of
excludability?
A. A concert in the city park
B. A professional baseball game
C. Exterior Christmas lights
D. An interstate highway
Answer: B
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Apply
AACBS: Analytic
[QUESTION]
12. If an economy is being “productively efficient,” then that means the economy is:
A. producing the products most wanted by society.
B. fully employing all economic resources.
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
C. maximizing the returns to factors of production.
D. using the least costly production techniques.
Answer: D
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
13. With allocative efficiency:
A. the state of technology—or methods used to produce output—does not change.
B. the available supplies of factors of production are fixed in both quantity and quality.
C. production of any particular mix of goods and services occurs in the least costly way.
D. production of any particular mix of goods and services is that mix most wanted by society.
Answer: D
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
14. If an economy is being “allocatively efficient,” then that means the economy is:
A. using the least costly production techniques.
B. producing the goods and services most wanted by society.
C. fully employing all economic resources.
D. maximizing the returns to factors of production.
Answer: B
Difficulty: 2 Medium
Topic: Private goods
Learning Objective: 05-02
Blooms: Remember
AACBS: Analytic
[QUESTION]
15. Allocative efficiency means that:
A. the law of increasing opportunity costs has reached a maximum.
B. the least costly methods are being used to produce goods and services.
C. resources are being devoted to the production of goods and services most desired by society.
D. the amount of other products that must be sacrificed to obtain production of a given product is
at a minimum.
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Ja neiti tulikin.
— Minkä Holopaisten? —
Kyllä täytyy sanua, jotta eri kylä s'oon se Pariisi kaiken pualesta.
Pinta-alaaki on kuulemma 78 neliökilometriä ja esikaupunkiinensa
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Ku toinen soittokunta lopetti, nii töine jatkoo ja koko se mahrottoman
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porisi ja kuahuu ku pärinäpata. Samppanjakorkit paukkuuvat ja erifärisiä
keijukaasia lenteli vasthan joka taholta n'otta henkiä salpas.
— Uiii mösjöö…!
— Nu ska vi hålla ruulit, int'e man altti i Pariis! (Ny pirethän lystiä, ei
me aina olla Pariisis.)
Mutta sitte tuli salihin yks yksinääne, juhlallisen näkööne herra. S'oli
tuas 50 ikääne ja vissihi enklantilaane. Eikhän se vai ollu joki pappi eli
opettaja, ku s'oli nii kovasti totisen ja juhlallisen oloone.
— Noo, noo — — —
Mutta silloonkos flikka äkkiä molemmin käsin otti ja pörrötti sen äijän
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— Täm'on kamalaa!
Suamen joukon perästä tuli Franskan oma sakki, john oli n. 250
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— Rikki!
— Menikö se 60?
— Nyt veti! — Hyi saakeli, alas alas, putua putua maaha keihäs! —
huuran mä ja Pihkala ähkyy kans ku mahatauris.