UNIT 3 example #44005

Efficiency is illustrated by a. both the production possibilities frontier and the circular-flow diagram. b. neither the production possibilities frontier nor the circular-flow diagram. c. the production possibilities frontier only. d. the circular-flow diagram only.

Which of the following concepts cannot be illustrated by the production possibilities frontier? a. efficiency b. opportunity cost c. equality d. trade-offs

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good a. increases as more of the good is produced. b. decreases as more of the good is produced. c. does not change as more of the good is produced. d. may increase, decrease, or not change as more of the good is produced.

One way to characterize the difference between positive statements and normative statements is as follows: a. Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future. b. Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be. c. Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation. d. Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.

Which of the following is an example of a positive statement? a. We should cut back on our use of carbon-based fuels such as coal and oil. b. Increasing the minimum wage results in more unemployment. c. Every American should have equal access to health care. d. The Federal Reserve ought to cut the interest rate.

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good a. decreases as more of the good is produced. b. increases as more of the good is produced. c. does not change as more of the good is produced. d. may increase, decrease, or not change as more of the good is produced.