MicroEcon Chapter 2

d. They cannot run lab experiments in the same way that other scientists can.

1 How are economists not like mathematicians, physicists, and biologists? a. They use models to represent the real world. b. They try to address their subject with a scientist's objectivity. c. They devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. d. They cannot run lab experiments in the same way that other scientists can.

a. the opportunity cost is the same as when society moves from point B to point C.

10 Refer to the figure. Consider the production possibilities frontier for an economy that produces only sofas and cars. When society moves from point A to point B, a. the opportunity cost is the same as when society moves from point B to point C. b. it is giving up cars to get sofas. c. the opportunity cost is increasing. d. it moves from an inefficient point to an efficient point

b. 400 bushels of wheat

11 Table: Production Possibilities What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels? a. 200 bushels of wheat b. 400 bushels of wheat c. 600 bushels of wheat d. 800 bushels of wheat

a. bowed outward indicating increasing opportunity costs.

12 Table: Production Possibilities Based on the values in the table, the production possibilities frontier is a. bowed outward indicating increasing opportunity costs. b. bowed outward indicating decreasing opportunity costs. c. a straight line indicating constant opportunity costs. d. bowed inward indicating increasing opportunity costs.

c. 1,000 bushels of corn and 2,200 bushels of wheat

13 Table: Production Possibilities Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology? a. 1,600 bushels of corn and 300 bushels of wheat b. 1,200 bushels of corn and 800 bushels of wheat c. 1,000 bushels of corn and 2,200 bushels of wheat d. 400 bushels of corn and 1,800 bushels of wheat

d. claims about how the world is.

14 Positive statements are a. prescriptive. b. claims about how the world should be. c. Correct Answer d. claims about how the world is.

a. performing an experiment in an economic system.

2 The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in a. performing an experiment in an economic system. b. applying mathematical methods to economic analysis. c. analyzing available data.

b. households and firms.

3 In the simple circular-flow diagram, the participants in the economy are a. firms and government. b. households and firms. c. households and gov d. households, firms, and government.

d. Money

4 In the circular-flow diagram, which of the following is not a factor of production? a. Labor b. Land c. Capital d. Money

c. it is impossible to produce more of one good without producing less of the other.

5 An economy's production of two goods is efficient if a. all members of society consume equal portions of the goods. b. the goods are produced using only some of society's available resources. c. it is impossible to produce more of one good without producing less of the other. d. the opportunity cost of producing more of one good is zero.

C

7 Refer to the figure below. It is not possible for this economy to produce at point a. A. b. B. c. C. d. D.

c. There is widespread unemployment in the economy.

8 Refer to the figure below. Suppose this economy is producing at point D. Which of the following statements would best explain this situation? a. The economy has insufficient resources to produce at a more desirable point. b. The economy's available technology prevents it from producing at a more desirable point. c. There is widespread unemployment in the economy. d. The economy is experiencing economic growth.

d. the slope of the production possibilities frontier, or 3/2 sofas.

9 Refer to the figure. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is a. the slope of the production possibilities frontier, or 2/3 of a sofa. b. the reciprocal of the slope of the production possibilities frontier, or 3/2 sofas. c. the reciprocal of the slope of the production possibilities frontier, or 2/3 of a sofa. d. the slope of the production possibilities frontier, or 3/2 sofas.

d. The opportunity cost of an additional 200 shoes increases as more shoes are produced.

Refer to the table above. Which of the following statements is correct? a. The opportunity cost of an additional 200 shoes is constant at 200 socks. b. The opportunity cost of an additional 200 shoes is constant at 300 socks. c. Footville's production possibilities frontier is a straight, downward-sloping line. d. The opportunity cost of an additional 200 shoes increases as more shoes are produced.