Macro Quiz #1

Refer to the above diagram. This economy will experience unemployment if it produces at point:

D

Refer to the above diagram. Flow (2) represents:

Land, labor, capital, and entrepreneurial ability.

Which of the following most closely relates to the idea of opportunity costs?

Tradeoffs

The scientific method is?

Used by economists and other social scientists, as well as by physical scientists and life scientists

Refer to the above diagram. Flow (1) represents:

Wage, rent, interest, and profit income.

Refer to the above tables. Suppose that Duckistan and Herbania are each producing 14 units of civilian goods and 2 unit of military goods. Then:

Duckistan is fully employing its resources but Herbania is not.

Refer to the above diagram. Flow (3) represents:

Goods and services.

The term laissez-faire suggests that:

Government should not interfere with the operation of the economy

Refer to the above tables. Suppose that technology and the quality of resources are the same in both countries. We can conclude that:

Herbania has more resources than Duckistan.

Refer to the above tables. Suppose that the amount and quality of resources are the same in both countries. We can conclude that:

Herbania is technologically better than Herbania at producing both military goods and civilian goods

The simple circular flow model shows that:

Households are on the selling side of the resource market and on the buying side of the product market

Refer to the above diagram. Arrows (3) and (4) represent:

Incomes and consumer expenditures respectively.

Refer to the above diagram. The combination of computers and bicycles shown by point F:

Is unattainable, given currently available resources and technology.

Refer to the above diagram. Other things equal, this economy will achieve the most rapid rate of growth if:

It chooses point A.

Refer to the above table. For these data the law of increasing opportunity costs is reflected in the fact that:

Larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.

According to economists, economic self-interest is?

A reality that underlies economic behavior

Refer to the above table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must:

Achieve economic growth.

Which of the following best illustrates the circular flow model in action?

All of these answers illustrate the workings of the circular flow model

The assertion that "There is no free lunch" means that...

All production involves the use of scarce resources and thus the sacrifice of alternative goods

Which of the following is associated with macroeconomics?

An empirical investigation of the general price level and unemployment rates since 1990

The production possibilities curve illustrates the basic principle that:

If all the resources of an economy are in use, more of one good can be produced only if less of another good is produced

Refer to the above tables. Opportunity costs are:

Increasing in both Duckistan and Herbania.

The four factors of production are:

Land, labor, capital and entrepreneurial ability

Refer to the above diagram. Arrows (1) and (3) are associated with:

The resource market

Refer to the above diagram. The combination of computers and bicycles shown by point G is:

Unattainable, given currently available resources and technology.

The market system's answer to the fundamental question "Who will get the goods and services?" is essentially:

"Those willing and able to pay for them."

Refer to the above diagram. Flow (3) represents:

Goods and services

Refer to the above table. If the economy is producing at production alternative C, the opportunity cost of the tenth unit of consumer goods will be:

1/3 of a unit of capital goods

A person should consume more of something when its marginal...

Benefit exceeds its marginal cost

The study of economics is primarily concerned with...

Choices that are made in seeking the best use of resources

Refer to the above diagram. Points A, B, C, D, and E show:

Combinations of bicycles and computers that society can produce by using its resources efficiently.

Refer to the above diagram. Flow (4) represents:

Consumer expenditures.

Refer to the above diagram. Arrows (1) and (2) represent:

Resources and goods respectively.

A nation's production possibilities curve is bowed out from the origin because:

Resources are not generally equally efficient in producing every good

A production possibilities curve illustrates:

Scarcity

Refer to the above tables. Opportunity costs of producing military goods are:

Smaller in Duckistan than Herbania

Refer to the above table. As compared to production alternative D, the choice of alternative C would:

Tend to generate a slower growth rate

Refer to the above diagram. If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6, the cost:

Will be 4 units of bicycles

Refer to the above diagram. If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

Will cost 1 unit of computers

Refer to the above table. A total output of 3 units of capital goods and 4 units of consumer goods:

Would involve an inefficient use of the economy's scarce resources.