Question

1. all of the following are characteristics of an economic institution except: a. it is a basic component of the structure of society. b. it is maintained and functions by means of rules, values, and traditions. c. it serves important social needs and interests. d. none of the above 2. when economists encounter tradeoffs in the analysis of social problems, they a. know that they have found useful means for solving the problems. b. recognize that further analysis cannot use methods of positive economics. c. have identified conflicts between values and objectives presented by the problems. d. are running into difficulties produced by measurement errors and bias. 3. economists would be more successful in their professional work if they a. could understand how business firms form and change their expectations. b. encountered only spurious correlations between economic variables. c. did not have to rely so heavily on statistics produced by government agencies. d. all of the above 4. if the use or allocation of a resource generates social conflict, then the resource a. is currently scarce. b. is probably a non - market good. c. does not show rivalry in consumption allowing exclusive use. d. all of the above 5. which of the following is one of the basic assumptions made by microeconomists? a. consumers primarily follow custom and tradition in making market purchases. b. the primary objective of business firms is to maximize their sales in any period. c. consumers continuously try to maximize their utility (satisfaction) d. none of the above 6. price competition in many industries is hard to observe because a. some sellers keep their prices fixed for long periods. b. many sellers give some buyers confidential discounts off the advertised list prices. c. it seldom occurs, being replaced by predatory pricing. d. none of the above

Explanation:

1. Economic institutions are fundamental to society, function via rules - values - traditions, and serve social needs. So all options a, b, c are correct characteristics, making d the answer.
2. Trade - offs in economic analysis of social problems imply value and objective conflicts.
3. Understanding firm expectations helps economists as firms are key economic actors. Spurious correlations are bad and over - reliance on government stats can be limiting.
4. Scarce resources often lead to social conflict as they are in limited supply. Non - market goods can also cause conflict due to non - market allocation methods. Rivalry in consumption is a characteristic of scarce resources that can lead to conflict.
5. Microeconomics assumes consumers aim to maximize utility.
6. Price competition can be hard to observe as some sellers keep prices fixed and others give confidential discounts.

Answer:

1. d. none of the above
2. c. have identified conflicts between values and objectives presented by the problems.
3. a. could understand how business firms form and change their expectations.
4. a. is currently scarce.
5. c. Consumers continuously try to maximize their utility (satisfaction)
6. b. many sellers give some buyers confidential discounts off the advertised list prices.