Microeconomics Quiz #2 example #22352

12 November 2022
4.8 (118 reviews)
23 test answers

Unlock all answers in this set

Unlock answers (19)
question
Economists, like mathematicians, physicists, and biologists do 3 things....
answer
1. make use of the scientific method 2.try to address their subject with a scientist's objectivity 3. devise theories, collect data, and the analyze these data in an attempt to verify or refute their theories.
question
The dispassionate development and testing of theories about how the world works...
answer
Scientific Method
question
Economists face an obstacle that many other scientists do not face. What is this obstacle?
answer
It is often difficult and sometimes impossible to perform experiments in economics.
question
The most common data for testing economic theories come from....
answer
historical episodes of economic change.
question
Economists make assumptions in order to...
answer
focus their thinking on the essence of the problem at hand.
question
For an economist, the idea of making assumptions is regarded generally as a....
answer
good idea, since doing so helps to simplify the complex world and make it easier to understand.
question
A model can be accurately described as a...
answer
simplification of reality
question
What does the circular-flow diagram leave out?
answer
The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
question
In economics, capital refers to
answer
buildings and machines used in the production process.
question
The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and
answer
society's preferences.
question
The production possibilities frontier is a graph that shows the various combinations of output that an economy
answer
can produce.
question
Any point on a country's production possibilities frontier represents a combination of two goods that an economy
answer
can produce using all available resources and technology.
question
What is a correct statement about production possibilities frontier?
answer
An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier.
question
An economic outcome is said to be efficient if the economy is....
answer
getting all it can get from the scarce resources it has available.
question
Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that
answer
the nation is not using all available resources or is using inferior technology or both.
question
The production possibilities frontier provides an illustration of the principle that
answer
people face trade-offs.
question
The bowed shape of the production possibilities frontier can be explained by the fact that
answer
the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.
question
Economists believe that production possibilities frontiers are often bowed because
answer
resources are not completely adaptable.
question
On a bowed production possibilities frontier, as you move down along the curve, 3 things happen...
answer
more of one good must be given up to receive one unit of the other good. the available production technology does not change. the opportunity cost increases.
question
In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now? a. The economy experiences economic growth. b. There is a technological advance in the toy industry, but the greeting card industry experiences no such advance. c. There is a technological advance in the greeting card industry, but the toy industry experiences no such advance. D. All of the above are correct.
answer
D
question
Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 1050 units of food and 47 machines. What happened through this technological advance?
answer
The technological advance reduced the amount of resources needed to produce 47 machines, so these resources could be used to produce more food.
question
Which of the following is an example of a normative, as opposed to positive, statement? a. If the price of a product decreases, people's willingness to buy that product will increase. b. Reducing tax rates on the wealthy would benefit the nation. c. If the national saving rate were to increase, so would the rate of economic growth. d. The elimination of trade restrictions would increase an economy's standard of living.
answer
B
question
Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement? a. One economist believes income tax cuts are unfair to those with low incomes; another economist believes income tax cuts are not unfair to those with low incomes. b. One economist believes unemployment causes more human suffering than does inflation; another economist believes inflation causes more human suffering than does unemployment. c. One economist believes the policies of the Democratic party offer the best hope for America's future; another economist believes the policies of the Republican party offer the best hope for America's future. d. One economist believes increases in the minimum wage increase unemployment; another economist believes increases in the minimum wage do not increase unemployment.
answer
D