9. Eoonomics, according to its definition, studies how people a earn and spend m

Question

9. Eoonomics, according to its definition, studies how people a earn and spend money b. vest in the stock and bond markets c. make choices in the face of scarcity d. supply goods in response to demand. 10 Which of the following is the best example of a microeconomic topic? a. The impact that the money supply has on inflation b. The reasoms for increases in the price of soft drinks c The effect that federal budget deficits have on the interest rate d The tradeoff between inflation and unemployment 11.- Which of the following is a macroeconomics topic? a Wages of textile workers in the Northeast b. The cost of producing 10,000 bookcases CThe economy's annual growth rate d. National demand for fish e Effects of farm subsidies on food prices 12. An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps? b. Gather data on crude ol prices and seemingly unrelated vatjables in onder to look for d None of these. The oil industry is controlled by a cartel; therefore price changes in the ldentify the problem, develop a model based on simplifying assumptions and test the model to formulate a conelusion. associations, then formalate a hypothesis based on those unexpected associations Askpeople in Alaska why they are not purchasing ol cannot be explained using economie theories

Explanation / Answer

Question 9

Economics is concerned with the selection of resources under conditions of scarcity.

Scarcity of resources implies choice.

Thus,

Economics, according to its definition, studies how people make choices in face of scarcity.

Hence, the correct answer is the option (c).

Question 10

Microeconomics is concerned with the behavior of individual economic units.

So, if we analyze a single good or an individual firm then this pertains to microeconomics.

So, the reason for increases in the price of soft drinks is the best example of a microeconomic topic.

Hence, the correct answer is the option (b).

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