Chapter 2 Quiz

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good...

Increases as more of the good is produced.

Refer to figure 2-2. If box C of this circular-flow diagram represents the goods market then box D represents...

The factor market

Refer to figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of the circular-flow diagram, then...

The flow of factors of production is also part of what is represented by the inner loop.

Refer to figure 2-5. If this economy devote all of its resources to the production of bananas, then it will produce...

300 bananas and zero baseballs

Refer to figure 2-13. The movement from point B to point C could have been caused by...

A change in income

In economics, capital refers to...

Buildings and machines used in the production process.

The production possibilities frontier is a graph that shows the various combinations of output that an economy...

Can produce

Refer to figure 2-1. Which arrow represents the flow of land, labor, and capital?

D

Refer to figure 2-13. The curves shown are...

Demand curves

Refer to figure 2-10. The shift of the production possibilities frontier from A to B illustrates...

Economic growth

Refer to figure 2-2. If households are buyers in the markets represented by box C of this circular flow diagram, then...

Firms are sellers in the market represented by Box C

Refer to figure 2-2. If the outer loop of the circular-flow diagram represents flows of dollars, then the interloop includes...

Flows of rent payments paid to owners of land.

Economists face an obstacle that many other scientists do not face. What is that obstacle?

It is often difficult and sometimes impossible to perform experiments in economics.

Which markets are represented in the simple circular-flow diagram?

Markets for goods and services and markets for factors of production

In the circular-flow diagram, which of the following is not a factor of production?

Money

Do use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in...

Performing an experiment in an economic system.

"Prices rise when the quantity of money rises rapidly" is an example of a...

Positive economic statement

Refer to figure 2-5. A movement from point C to point D could be caused by...

Unemployment

Refer to figure 2-5. If this economy devote one-half of its available resources to the production of baseballs and the other half to the production of bananas, it could produce...

We would have to know the details of this economies technology in order to determine this.

Refer to figure 2-5. The opportunity cost of this economy moving from pointe D2 point B is...

Zero