Quiz 1: Macroeconomics

The production possibilities curve illustrates the basic principle that:

if all the resources of an economy are in use, more of one good can be produced if less of another good is produced

The four factors of production are:

land, labor, capital, and entrepreneurial ability

According to economists, economic self-interest:

is a reality that underlies economic behavior

The study of economics is primarily concerned with:

Choices that are made in seeking the best use of resources

The market system's answer to the fundamental question "who will get the goods and services?" Is essentially:

"Those willing and able to pay for them"

The assertion that "there is no free lunch" means that:

All production involves the use of scarce resources and thus the sacrifice of alternative goods

A person should consumer more of something when it's marginal:

Benefit exceeds its marginal cost

Refer to the above tables. Suppose that Duckistan and Herbania are each producing 14 units of civilian goods and 2 unit of military goods. Then:

Duckistan is fully employing its resources but Herbania is not.

Refer to the above tables. Suppose that the amount and quality of resources are the same in both countries. We can conclude that:

Herbania is technologically superior to Duckinstan in producing civilian goods

Refer to the above tables. Opportunity costs are:

Increasing in both Duckistan and Herbania

Refer to the above diagram. The combination of computers and bicycles shown by point F:

Is attainable, but implies that the economy is not using all its resources.

A nation's production possibilities curve is bowed out from the origin because:

Resources are not generally equally efficient in producing every good

Which of the following most closely relates to the idea of opportunity costs?

Tradeoffs

The scientific method is:

Used by economists and other social scientists, as well as by physical scientists and life scientists

Refer to the above diagram. If society is currently producing 9 units of bicycles and 4 units of computer and it now decides to increase computer output to 6, the cost:

Will be 4 units of bicycles

Which of the following is associated with macroeconomics?

an empirical investigation of the general price level and unemployment rates since 1990

Refer to the above diagram. Points A, B, C, D, and E show:

combinations of bicycles and computers that society can produce by using its resources efficiently.

A production possibilities curve illustrates:

Scarcity

Refer to the above tables. Opportunity costs of producing military goods are:

Smaller in Duckistan than Herbania