ECON chapter 2

the following parts of government regularly rely on the advice of economists

Department of treasury Office of management and budget Department of Justice

Microeconomics refers to the economy as a whole, whereas macroeconomics refers to the economic choice of individuals

False

a point inside the production possibilities frontier is

Feasible but not efficient

the circular flow diagram illustrates that in markets for the factors of production

Households are sellers, and firms are buyers

which of the following is a positive, rather than a normative, statement

Law X will reduce national income

which of the following is an accurate statement about positive and normative economics

Positive economics can be proven with facts and quantitative data

which of the following would be a topic you could expect to study in microeconomics

Supply and Demand

Positive economics in the status of the economy whereas normative economics is an idea of what the status of the economy should be

True

in making which of the following statement is an economist acting more like a scientist

a reduction in unemployment benefits will reduce the unemployment rate

Economic growth is depicted by

a shift in the production possibilities frontier outward

An economic model is

a simplified representation of some aspect of the economy

which of the following is most likely to produce scientific evidence about a theory

a tenured economist employed at a leading university analyzing the impact of bank regulation on rural lending

economic models are

built with assumptions

which of the following is not a factor of production

money

which of the following will not shift a country's production possibilities frontier outward

reduction in unemployment

Suppose two economists are arguing about policies that deal with unemployment. One economist says " the government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars." the other economist responds, "that ridiculous. If the government spent an additional 50 billion dollars it would reduce unemployment by only one-tenth of 1 percent and that effect would only be temporary."

disagree because they have different scientific judgement

Suppose two economists are arguing about policies that deal with unemployment. One economist says, "The government should fight unemployment because it is the greatest social evil." The other economist responds, "That's ridiculous. Inflation is the greatest social evil." These economists

disagree because they have different values

Points on the production possibilities frontier are

efficient

the scientific method requires that

scientists be objective.

Positive statements are

statements of description that can be tested

which of the following statement regarding the circular flow diagram is true

the factors of production are owned by households

which of the following issues is related to microeconomics

the impact of oil prices on auto production

All of the following topics fall within the study of microeconomics except

the influence of the government budget deficit on economic growth

which of the following statement about microeconomics and macroeconomics is not true

the study of very large industries is a topic within macroeconomics

which of the following statement is normative

the unemployment rate should be lower

which of the following cases in the assumption most reasonable

to address the benefits of trade, an economist assumes that there are two people and two goods