Macroeconomics Quiz 1-2 Review

Refer to the above diagram. Flow (3) represents:

goods and services

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 only if less of another good is produced.

Refer to the above diagram. If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

will cost 1 unit of computers.

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

Herbania has more resources than Duckistan.

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 Duckistan in producing civilian goods.

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.

Refer to the above table. For this economy to produce a total output of 3 units of capital goods and 13 units

allocate its available resources most efficiently among alternative uses.

The study of economics is primarily concerned with:

choices that are made in seeking the best use of resources.

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.

Refer to the above diagram. Arrows (1) and (2) represent:

goods and resources respectively.

Refer to the above diagram. Flow (4) represents:

goods and services

Refer to the above diagram. Other things equal, this economy will achieve the most rapid rate of growth if:

it chooses point A.

Refer to the above diagram. Flow (2) represents:

land, labor, capital, and entrepreneurial ability

Refer to the above tables. Opportunity costs are

smaller in Duckistan than Herbania.

Refer to the above table. For these data, the law of increasing opportunity costs is reflected in the fact that

the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point.

Refer to the above diagram. Arrows (1) and (3) are associated with:

the resource market.

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

tradeoffs.

Which of the following best illustrates the circular flow model in action?

All of these answers illustrate the workings of the circular flow model.

Refer to the above table. A total output of 3 units of capital goods and 4 units of consumer goods:

is unobtainable in this economy.

The four factors of production are:

land, labor, capital, and entrepreneurial ability

A nations production possibilities curve is bowed out from the origin because:

resources are not generally equally efficient in producing every good.

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

unattainable, given currently available resources and technology

Refer to the above diagram. Flow (1) represents:

wage, rent, interest, and profit income.

Refer to the above diagram. If society is currently producing 9 units of bicycles and 4 units of computers

will be 4 units of bicycles.

The market systems answer to the fundamental question "Who will get the goods and services?" is essentially:

"Those willing and able to pay for them."

Refer to the above table. If the economy is producing at production alternative C, the opportunity cost of the tenth unit of consumer goods will be:

1 / 3 of a unit of capital goods.

Refer to the above diagram. This economy will experience unemployment if it produces at point:

D.

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.

Which of the following is associated with macroeconomics?

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

The scientific method is:

analysis that moves from broad generalizations called laws to theories and then to hypotheses.

Refer to the above table. As compared to production alternative D, the choice of alternative C would:

be unattainable.

A person should consume more of something when its marginal:

benefit exceeds its marginal cost.

The term laissez-faire suggests that:

government should not interfere with the operation of the economy.

The simple circular flow model shows that:

households are on the selling side of the resource market and on the buying side of the product market.

Refer to the above diagram. Arrows (3) and (4) represent:

incomes and consumer expenditures respectively.

According to economists, economic self-interest:

is a reality that underlies economic behavior.

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 production possibilities curve illustrates:

scarcity

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

smaller in Duckistan than Herbania.