Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Economic
Q:
Refer to the accompanying figure to answer the following questions.Unemployed resources are evident ata. point A. b. point B.c. point C.d. point D. e. points B, C, and E.
Q:
Refer to the accompanying figure to answer the following questions.The inefficient point(s) is/area. point A. b. points C and D. c. point C.d. point D.e. points B, C, and E.
Q:
Refer to the accompanying figure to answer the following questions.How is opportunity cost illustrated?a. a move from point A to point Bb. a move from point A to point Cc. a move from point C to point Dd. a move from point B to point Ce. a move from point D to point E
Q:
Consider the production possibilities frontier (PPF) shown in the figure below to answer the following questions.Given current resources and technology, the unattainable range is best described asa. only area O: points outside the PPF.b. points on the PPF only.c. only area I: points inside the PPF.d. area I: inside the PPF and points on the PPF.e. area O: outside the PPF and points on the PPF.
Q:
Refer to the following figure to answer the following questions.Which statement best describes the opportunity cost evident in the production possibilities frontier (PPF) for the accompanying figure?a. The law of increasing relative cost applies because the PPF is a straight line.b. The law of increasing relative cost applies because the PPF is bowed outward.c. The opportunity cost is constant because the PPF is a straight line.d. The opportunity cost is constant because the PPF is bowed outward.e. The opportunity cost decreases because the line has negative slope.
Q:
Refer to the following figure to answer the following questions.In the figure, point E isa. an efficient point.b. unattainable with current resources.c. an inefficient point.d. the equilibrium.e. evidence that trade does not enrich society.
Q:
Refer to the following figure to answer the following questions.Which point in the corresponding figure shows that productive resources are NOT fully employed?a. point A b. point B c. point Cd. point De. point E
Q:
Which of the following is NOT an assumption that economists make when developing a production possibilities frontier (PPF)?
a. We live in a world with only two goods.
b. There are no increases in technology.
c. There is no change in available resources.
d. Society will always be producing somewhere on the PPF.
e. There are no decreases in technology.
Q:
Think of the production possibilities frontier (PPF) model. When society is producing the largest possible output from its resources, it is operatinga. inefficiently. b. efficiently. c. with no opportunity cost.d. inside (within) the PPF.e. beyond its opportunity cost.
Q:
How will a reduction in the national unemployment rate affect a nations production possibilities frontier (PPF)?
a. It will cause the PPF to shift inward.
b. It will cause the PPF to shift outward.
c. It will move society to a point inward, to a point farther away from the PPF.
d. It will move society outward, to a point closer to or on the PPF.
e. It will push society to a point outside its PPF.
Q:
On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by
a. movement from a point within the frontier to a point on the frontier.
b. a point outside the frontier.
c. a point within the frontier.
d. movement from a point on the frontier to another point on the frontier.
e. a point on the frontier.
Q:
A society that is producing its maximum combination of goods and using all available resources for production
a. has minimized its opportunity cost.
b. has maximized its opportunity cost.
c. is operating on its production possibilities frontier (PPF).
d. is operating outside its PPF.
e. has eliminated scarcity.
Q:
Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by
a. also increasing the production of the second good.
b. decreasing the production of the second good.
c. increasing the price of the second good.
d. decreasing the price of the second good.
e. reducing the resources available for production.
Q:
The area inside (within) the production possibilities frontier (PPF) contains ________ points.a. normative b. positive c. efficientd. inefficiente. high opportunity cost
Q:
The ________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.
a. concept of absolute advantage
b. law of positive statements
c. law of demand
d. production possibilities frontier (PPF)
e. principle of comparative advantage
Q:
At full employment, a society produces
a. somewhere within its production possibilities frontier (PPF).
b. somewhere outside its PPF.
c. at the origin on its PPF graph.
d. on its PPF.
e. only one good.
Q:
A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called
a. a production possibilities frontier (PPF).
b. a supply curve.
c. opportunity cost.
d. a consumer demand curve.
e. absolute advantage.
Q:
The production possibilities frontier (PPF) shows
a. the trade-off between the efficient production of two different goods.
b. the difference between microanalysis and macroanalysis.
c. the difference between normative and positive analysis.
d. how a firm should price a new product.
e. how price and quantity are related for a single good.
Q:
A model without any simplifying assumptions
a. is highly complex and likely unworkable.
b. excludes important predictive variables.
c. is very helpful for solving tough, real-world problems.
d. does not look like the real-world problem it is meant to address.
e. provides simplified solutions to complex problems.
Q:
One reason that economists make assumptions when designing models is to
a. exclude variables that do not add predictive power to the model.
b. make models more like the real world.
c. make models more complex.
d. increase endogenous factors.
e. ensure that all possible factors are included.
Q:
Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs. The many variables that can be precisely controlled inside the wind tunnel are considered ________ factors.a. normative b. positivec. comparatived. endogenous e. exogenous
Q:
When testing a model rocket on a campus quad, which of the following would be an endogenous factor?
a. the current wind speed across the quad
b. the quads elevation and air pressure
c. the extent of precipitation
d. the gravitational pull of Earth
e. the size of the rocket engine
Q:
When testing a paper airplane on a campus quad, which of the following would be an exogenous factor?
a. the weight of the paper used in making the plane
b. the ratio of wingspan to plane length
c. the height of the body of the plane
d. the level of wind encountered
e. the number of folds in the wings
Q:
Nadine is considering the dress well, test well theory, which argues that one performs better on exams when one dresses nicer than one does when wearing sweatpants. If Nadine wants to test this theory over the course of the semester, which of the following would be an endogenous factor in her experiment?a. her innate ability in the subjectb. the difficulty of the examc. the relative mix of multiple-choice and short-answer questionsd. her clothing choice for the exame. the amount of time Nadine spends studying for the exam
Q:
Variables that are controlled for in a model are calleda. normative statements. b. positive statements. c. endogenous factors.d. exogenous factors.e. the scientific method.
Q:
Variables that are NOT accounted for in a model are calleda. endogenous factors. b. exogenous factors. c. normative statements.d. positive statements.e. the scientific method.
Q:
Why do economists use models?
a. Models are used to add complexity to a simple world.
b. Models allow us to study a simplified version of a complex world.
c. Models allow us to control exogenous factors.
d. Models make the world harder to understand.
e. Models allow us to examine more factors than what actually exists in our world.
Q:
The process of examining a change in one variable in a model while assuming that all the other variables remain constant is calleda. exogenous factors. b. ceteris paribus. c. normative analysis.d. positive analysis.e. faulty assumptions.
Q:
Which of the following is necessary to build a good economic model?a. normative statements b. assumptions c. opinionsd. complex mathe. realism
Q:
Ceteris paribus means
a. in sets of two.
b. constant opportunity cost.
c. other things being equal.
d. buyer beware.
e. there is no reason to argue about peoples tastes.
Q:
The important act of holding all other variables constant while examining a particular variable is known asa. endogeneity. b. a normative statement. c. a positive statement.d. macroeconomics.e. ceteris paribus.
Q:
Which of the following is a normative statement?
a. The current exchange rate is 0.7 British pounds per U.S. dollar.
b. In January, the average temperature in Fargo, North Dakota, is 56 degrees.
c. Winters in Arkansas are too cold.
d. On average, people save 15 percent when they switch to GEICO.
e. University of Virginia graduates earn more than Duke University graduates.
Q:
Which of the following is a positive statement?
a. Winters in Arkansas are too cold.
b. Everyone should work in a bank to understand the true value of money.
c. Harvard University is the top education institution in the country.
d. On average, people save 15 percent when they switch to GEICO.
e. Everyone ought to have a life insurance policy.
Q:
Which of the following is a positive statement?
a. Individuals should make good long-term decisions.
b. Corporations should maximize shareholder value.
c. The government should reduce the level of unemployment.
d. The most important effects of policy happen in the short term.
e. The unemployment rate is 8 percent.
Q:
Which of the following is a normative statement?
a. One should wear a helmet when cycling.
b. The sky is blue.
c. A bicycle has two wheels.
d. A unicycle has five wheels.
e. Electricity follows the path of least resistance.
Q:
Which of the following is a positive statement?
a. Nellys dog should lose some weight.
b. Legally requiring dogs to have rabies shots will reduce the number of rabid dogs.
c. Nelly should take her dog to the veterinarian once a year for a checkup.
d. Chihuahuas are cuter than bulldogs.
e. All dogs should be required to wear leashes at all times.
Q:
Which of the following is a normative statement?
a. The sky is blue.
b. The sky is green with pink polka dots.
c. Points on the production possibilities frontier (PPF) are efficient.
d. Points outside the production possibilities frontier (PPF) are unattainable with current resources.
e. We should strive to push the production possibilities frontier (PPF) outward.
Q:
Which of the following is a positive statement?
a. An economist should test every theory at least twice.
b. Increases in the minimum wage cause unemployment.
c. We ought to deregulate the mortgage market.
d. The government must provide unlimited health care to citizens.
e. We should forgo some current consumption in order to invest in the future.
Q:
A positive statement
a. is a claim that can be tested.
b. is a statement about what ought to be.
c. is a declaration of opinion.
d. is a claim that cannot be tested.
e. cannot be evaluated using the scientific method.
Q:
The scientific method and the tools of economics are useful in examining
a. only how individuals make decisions.
b. only how business firms make decisions.
c. only how government policies affect macroeconomic outcomes.
d. only the trade-offs evident in the production possibilities frontier (PPF).
e. anything; economists will use their tools to study anything in the world around them.
Q:
Economists use the scientific method and the tools of economics to study
a. only the decisions of individuals.
b. only the decisions of business firms.
c. only economic growth and gross domestic product (GDP).
d. only the production possibilities curve.
e. anything around them; the world is the economists laboratory.
Q:
On the television show MythBusters, the hosts design experiments, collect data, and test theories based on popular myths. This is an example ofa. the scientific method. b. economic growth. c. gains from trade.d. production possibilities.e. absolute advantage.
Q:
CHAPTER 2: Model Building and Gains from TradeAn economists use of experiments and real-world data to test a theory is an example ofa. the scientific method in economics. b. macroeconomics. c. economic growth.d. normative analysis.e. comparative advantage.
Q:
Q:
Q:
Q:
Q:
Q:
20. Explain why, in the figure, a country might rather be at point B than at point A.
Q:
Q:
Q:
Q:
16. In the movie A Knightu2019s Tale, three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performances. Use appropriate production possibilities frontiers (PPFs) and words to describe the investment trade-off they face.
Q:
Q:
Q:
13. The table below shows the maximum number of burgers or hot dogs that Frances and Takeru can cook in one hour.a. Fill in the rest of the table with the opportunity cost of burgers and hot dogs for each person. Be sure to include the units.b. Identify who has a comparative advantage in producing each good. Maximum BurgersMaximum Hot DogsOpportunity Cost of 1 BurgerOpportunity Cost of 1 Hot DogFrances3060 Takeru5075
Q:
12. The existing entries in the following table show the maximum quantities of milk shakes or fruit smoothies the college president and dining hall staffer could make during an afternoon shift, given a fixed amount of resources.a. Fill in the remaining part of the table (be sure to label the units) and answer the questionsbelow. Number of Milk Shakes per ShiftNumber of Smoothies per ShiftOpportunity Cost of 1 SmoothieOpportunity Cost of 1 Milk ShakePresident5025 Dining Hall Staffer9030 b. Who has a comparative advantage in producing smoothies?c. Who has an absolute advantage in producing milk shakes?
Q:
Q:
Q:
Q:
Q:
Q:
Q:
5. Draw a production possibilities frontier (PPF) for good A and good B. Suppose that these goods are subject to increasing relative costs in production, and be sure that your graph reflects this fact.Now suppose that a new and innovative technology enhances the production of good A but not good B. Illustrate how this new innovation changes the production possibilities frontier (PPF).
Q:
4. What does it mean when society is operating inside the production possibilities frontier (PPF)?
Q:
3. What assumptions do economists make when developing a production possibilities frontier (PPF)?
Q:
2. How will a reduction in the national unemployment rate affect a nations production possibilities frontier (PPF)?
Q:
SHORT ANSWER1. Comment on the role of models in economics. What are the strengths and weaknesses of using them to explore the world around us?
Q:
Why has Indias economy grown faster than the United States in recent years?a. India production has focused more on consumer goods.b. India has lowered its population growth rate.c. India has attained a higher standard of living than the United States.d. Indias production has focused more on capital goods.e. India has placed more focus on its citizens immediate needs.
Q:
A poker player wins some cash. Which use of the money would most naturally be considered an investment?
a. buying a round of drinks for everyone at a bar
b. using the money to play more poker
c. paying off debts owed to bookies
d. shopping for groceries
e. buying a book of tips for poker players
Q:
For what kind of society does a shift away from the production of capital goods and toward the production of consumer goods make sense?
a. a society with a scarcity of natural resources
b. a society with a high unemployment rate
c. a society with a low per-capita income
d. a society with a large per-capita stock of capital goods
e. a society with a large population
Q:
When an economy shifts away from production of consumer goods and toward production of capital goods, for the average worker this trade-off means
a. a higher standard of living.
b. longer work hours.
c. a lower savings rate (as a percentage of income).
d. more leisure time.
e. more disposable income.
Q:
Consider the following scenario to answer the following questions: Kukla makes tables, with an opportunity cost of 3 rugs per every 4 tables. Zola makes rugs, with an opportunity cost of 2 tables per every 3 rugsOllie proposes that Kukla give Zola 2 tables in exchange for 2 rugs. What are Kukla's and Zolas reactions?a. Kukla likes the proposal, but Zola does not.b. Zola likes the proposal, but Kukla does not.c. Kukla and Zola both like the proposal.d. Neither Kukla nor Zola likes the proposal.e. Ollies proposal is not feasible.
Q:
The figure depicts a shift in a societyu2019s production possibilities frontier (PPF) for the manufacture of trains and planes: train-manufacturing capacity expands while plane-manufacturing capacity shrinks. Refer to this figure to answer the following questions.Which point represents an output that was efficient before the shift but is inefficient afterward?a. point A b. point B c. point Cd. point De. point E
Q:
Which scenario represents economic contraction?
a. an outward shift of the PPF
b. an inward shift of the PPF
c. upward movement along the PPF
d. downward movement along the PPF
e. straightening of the curve of the PPF
Q:
Economic growth is, by definition, an increase in the
a. ability to produce goods.
b. number of participants in the workforce.
c. demand for goods.
d. average citizens standard of living.
e. average workers salary.
Q:
Which faulty assumption by banks led to the Great Recession that began in 2007?
a. that inflation would always remain low
b. that the U.S. government would always pay its debts
c. that stock prices would never drop
d. that the dollar would always be strong against other currencies
e. that real estate prices would always rise
Q:
Wilbur and Orville Wrights testing of wing designs in a wind tunnel is an example of usinga. observations to construct models. b. hypotheses to test observations. c. a theory to formulate hypotheses.d. models to collect data.e. data to make predictions.
Q:
Which of the following is an important characteristic of good economic models?
a. They deal with the economy as a whole.
b. They use the language of mathematics.
c. They are flexible in their designs.
d. They avoid making predictions.
e. They are as complex as the realities they represent.
Q:
For a phenomenon to be investigated by means of experiments, the phenomenon musta. involve human beings. b. have observable effects. c. have occurred in the past.d. be well understood.e. be quantitatively measurable.