Chapter 2 Quiz
In making which of the following statements is an economist acting more like a scientist?
A reduction in unemployment benefits will reduce the unemployment rate
The scientific method requires that
scientists be objective
Positive statements are
statements of description that can be tested
Which of the following issues is related to microeconomics?
the impact of oil prices on auto production
Which of the following statements regarding the circular-flow diagram is true?
The factors of production are owned by households
Which of the following statements about microeconomics and macroeconomics is not true?
The study of very large industries is a topic within macroeconomics
Which of the following statements is normative?
The unemployment rate should be lower
In which of the following cases is the assumption most reasonable?
To address the benefits of trade, an economist assumes that there are two people and two goods
Which of the following will not shift a country's production possibilities frontier outward?
a reduction in unemployment
Economic growth is depicted by
a shift in the production possibilities frontier outward
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 regulations on rural lending
Economic models are
built with assumptions
Which of the following is not a factor of production?
money
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, "Hogwash. 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!" These economists
disagree because they have different scientific judgments
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, "Hogwash. Inflation is the greatest social evil." These economists
disagree because they have different values
Points on the production possibilities frontier are
efficient