Question 1

A circular-flow diagram is a model that

Accepted Answer

a.) helps to explain how participants in the economy interact with one another.b.) helps to explain how the economy is organized.

Question 2

A circular-flow model and production possibilities frontier are similar in that

Accepted Answer

both make use of assumptions.

Question 3

A model that shows how dollars flow through markets among households and firms is called the

Accepted Answer

circular-flow diagram.

Question 4

A production possibilities frontier can shift outward if

Accepted Answer

there is a technological improvement.

Question 5

A production possibilities frontier shifts outward when

Accepted Answer

the economy experiences economic growth.

Question 6

According to the circular-flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Accepted Answer

Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.

Question 7

An economic outcome is said to be efficient if the economy is

Accepted Answer

getting all it can get from the scarce resources it has available.

Question 8

An economy's production of two goods is efficient if

Accepted Answer

it is impossible to produce more of one good without producing less of the other.

Question 9

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Accepted Answer

can produce using all available resources and technology.

Question 10

Efficiency is illustrated by

Accepted Answer

the production possibilities frontier only.

Question 11

Factors of production are

Accepted Answer

inputs into the production process.

Question 12

Factors of production are

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used to produce goods and services.

Question 13

Which of the following events would explain the shift of the production possibilities frontier from A to B? (upward shift)

Accepted Answer

The economy experienced a technological advance in the production of books. (books vs. DVDs)

Question 14

The shift of the production possibilities frontier from A to B can best be described as (outward shift)

Accepted Answer

economic growth.

Question 15

Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

a general technological advance

Quiz #1

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