online quiz 2

Economists face an obstacle that many other scientists do not face. What is that obstacle?

It is often difficult and sometimes impossible to perform experiments in economics

Economists believe that production possibilities frontiers are often bowed because

resources are not completely adaptable

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

the available production technology

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

the nation is not using all available resources or is using inferior technology or both

On a bowed production possibilities frontier, as you move down along the curve

the opportunity cost increases, the available production technology does not change, more of one good must be given up to receive one unit of the other good

Which of the following is a correct statement about production possibilities frontiers?

An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier.

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

One economist believes increases in the minimum wage increase unemployment; another economist believes increases in the minimum wage do not increase unemployment

One way to characterize the difference between positive statements and normative statements is as follows:

Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be

Which of the following is an example of a normative, as opposed to positive, statement?

Reducing tax rates on the wealthy would benefit the nation

Which of the following statements about the circular-flow diagram is correct?

The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms

The scientific method is

The dispassionate development and testing of theories about how the world works

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

There is a technological advance in the toy industry, but the greeting card industry experiences no such advance, There is a technological advance in the greeting card industry, but the toy industry experiences no such advance, The economy experiences economic growth.

In economics, capital refers to

buildings and machines used in the production process

The production possibilities frontier is a graph that shows the various combinations of output that an economy

can produce

An economic outcome is said to be efficient if the economy is

getting all it can get from the scarce resources it has available

For an economist, the idea of making assumptions is regarded generally as a

good idea, since doing so helps to simplify the complex world and make it easier to understand

The most common data for testing economic theories come from

historical episodes of economic change

Economists, like mathematicians, physicists, and biologists...

make use of the scientific method, try to address their subject with a scientist's objectivity, devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories

The production possibilities frontier provides an illustration of the principle that

people face trade-offs

The bowed shape of the production possibilities frontier can be explained by the fact that

the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing