Econ chapter 2

According to the circular flow model, if Chris is the owner of a landscaping business and he just received $50 for mowing mrs. Pendletons lawn... A. Chris acts as a firm who interacted in the markets for good and services w mrs Pendleton B. The $50 represents a cost of production for Chris's firm C. The $50 represents wages, rent, and profit to Chris firm D. Chris acts as a firm who interacted in the markets for factors production w mrs Pendleton

A

Duties of the Council of Economic Advisers include A. Advising the president and writing the annual economic report of the president B. Implementing the presidents tax policies C. Managing of the nations money supply D. Managing the social security program

A

Efficient production is represented by which point(s)? A. A,B B. A,B,D C. A,B,C D. C

A

If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then A. The flow of factors of production is also part of what is represented by the inner loop B. The flow of income paid to households is also part of what is represented by the inner loop C. The flow of revenue to firms is also part of what is represented by the inner loop D. Households must be sellers of output

A

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario? A. This is a common occurrence. The policy maker knows the best policy but chooses not to institute it for other reasons. B. This is a common occurrence. The policymaker usually disregards an economists advice because they do not believe its the most efficient policy. C. This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. D. This would never happen. Policy makers always follow the advice of economists

A

The use of theory and observation is more difficult in economics than 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 D. Formulating theories about economic events

A

When a PPF is bowed outward, the opportunity cost of producing an additional unit of a good A. Increases as more of the good is produced B. Decreases as more of the good is produced C. Does not change as more of the good is produced D. May increase, decrease, or not change as more of the good is produced

A

Ethan works as an attorney for a corporation and s paid a salary in exchange for the legal services he performs. If Ethan's income is represented by a flow of dollars from box d to box b in this circular-flow diagram, then the revenue earned by a firm selling its product is represented by a flow of dollars A. Box a to box c B. Box c to box a C. Box b to box c D. Box c to box b

B

In the circular-flow diagram, in the markets for A. Goods and services, households and firms are both sellers B. Factors of production, households are sellers and firms and buyers C. Goods and services, households are sellers and firms are buyers D. The factors of production, households and firms are both sellers

B

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that A. The nation is producing beyond its capacity, so inflation will occur B. The nation is not using all available resources is using inferior technology or both C. The nation is producing an efficient combo of goods D. There will be a large opportunity cost if the nation tries to increase production of any good

B

What is the opportunity cost to foothills of increasing production of shoes from 400 to 600? A. 400 socks B. 300 socks C. 200 socks D. 100 socks

B

Which of the following events would explain the shift of the ppf from a to b? A. Decrease in unemployment B. General technological advance C. Technological advance in necklace industry D. An improvement in allocation of resource

B

Suppose the economy is producing at point B. Which of the following statements would best explain this situation A. Econ has insufficient resources to produce at a more desirable point B. The economy's available tech prevents it from producing at a more desirable point C. There is a widespread unemployment in the economy D. The economy is experiencing economic growth

C

The ppf provides an illustration of the principle that A. Trade can make everyone better off B. Gov can sometimes improve market outcomes C. Ppl face trade offs D. People respond to incentives

C

Which of the following is an example of a positive, as opposed to a normative statement A. If welfare payments increase, the world will be a better place B. The income tax rate should be increased to offset the budget deficit C. Prices rise when the gov prints too much money D. Antitrust laws should be used to prevent further concentration in the wireless telephone service market

C

An assumption an economist might make while studying international trade is A. There are only two countries B. Countries only produce two goods C. Technology does not change D. All of the above

D

Consider the ppf for an Econ that only produces computers and televisions. The opportunity cost of each computer is A. The slope of the ppf, or 1/2 Fp a television B. The reciprocal of the slope of the ppf, or 2 televisions C. The reciprocal of the slope of the ppf, or 1/2 a television D. The slope of the ppf, or 2 televisions

D

How are economists not like mathematicians, physicists, and biologists? A. Economists do not apply scientific method B. Economists do not try to address their subject w a scientists objectivity C. Economists only use data to refute theories D. Economists typically pay closer attn to natural experiments through history then lab experiments

D

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement? A. One economist believes everyone should pay the same percentage of their income in taxes; another economist believes that wealthier citizens should pay a higher percentage of their income in taxes B. One economist believes that manufacturing firms should face greater regulation to preserve the environment; another economist believes the government should to intervene in free markets C. One economist believes that equality should be valued over efficiency in policy decisions; another economist believes tat efficiency should be valued over equality in policy decisions. D. One economist believes the gov should tax a households income; another economist believes the gov should tax a households consumption because it will cause households to save more

D

The opportunity cost of this economy moving from point d to point c is A. 60 dryers B. 20 dryers C. 20 washers and 20 dryers D. 20 washers

D

When an economist evaluates a positive statement, he or she is primarily A. Examining evidence B. Acting as a scientist C. Concerned with verifying how the world is D. All of the above

D

Which of the following statements is correct? A. The opportunity cost of an additional 100 toys is constant at 100 glasses B. The opportunity cost of an additional 100 toys is constant at 600 glasses C. Supertowns ppf is a straight, downward-sloping line D. The opportunity cost of an additional 100 toys increases as more toys are produced

D

Which of the following steps does and economist not take when studying the economy? A. Devise theories B. Collect data C. Analyze data D. Conduct a lab experiment in order to generate data

D

Yi and Avik are both economists. Yi thinks that taxing consumption rather than income would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik... A. Hold different normative views about the tax system B. Disagree about validity of a positive theory C. Have a fundamental misunderstanding of the tax system D. More than one of the above is correct

D

Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular-flow diagram, then Juan's income is represented by a flow of dollars A. Box a to box c B. Box c to box a C. Box b to box d D. Box d to box b

Dw