Chapter 2 - MACRO

Economic models are ________.

• a. usually made of wood and plastic

• b. built with assumptions

• c. created to duplicate reality

• d. useless if they are simple

Suppose two economists are arguing about policies that deal with unemployment. One economist says, "The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars." The other economist responds, "That's ridiculous. If the government spent an additional 50 billion dollars, it would reduce unemployment by only one-tenth of 1 percent, and that effect would only be temporary!" These economists ________.

• a. disagree because they have different scientific judgments

• b. disagree because they have different values

• c. really don't disagree at all. It just looks that way

• d. do none of the answer choices

Tags

CCSS.RI.8.1

CCSS.RI.8.8

CCSS.RL.11-12.1

CCSS.RL.8.1

CCSS.RL.9-10.1

The scientific method requires that ________.

• a. scientists use test tubes and have clean labs

• b. scientists be objective

• c. scientists use precision equipment

• d. only incorrect theories are tested

• e. only correct theories are tested

Which of the following is not a factor of production?

• a. Land

• b. Labor

• c. Capital

• d. Money

• e. All of the answer choices are factors of production.

Which of the following will not shift a country's production possibilities frontier outward?

• a. An increase in the capital stock

• b. An increase in the labor force

• c. A reduction in unemployment

• d. An advance in technology

Economic growth is depicted by ________.

• a. a movement from inside the production possibilities frontier toward the frontier

• b. a movement along a production possibilities frontier toward consumption goods

• c. a shift in the production possibilities frontier outward

• d. a shift in the production possibilities frontier inward

Use the Exhibit to answer the question.

If the economy is operating at point C, the opportunity cost of producing an additional 15 units of bacon is ________.

• 
  a. 10 units of eggs

• b. 20 units of eggs

• c. 30 units of eggs

• d. 40 units of eggs

• e. 50 units of eggs

In making which of the following statements is an economist acting more like a scientist?

• a. The unemployment rate should be reduced because unemployment robs individuals of their dignity.

• b. The rate of inflation should be reduced because it robs the elderly of their savings.

• c. A reduction in unemployment benefits will reduce the unemployment rate.

• d. The state should increase subsidies to universities because the future of our country depends on education.

Which of the following statements regarding the circular-flow diagram is true?

• a. The factors of production are owned by households.

• b. If Alicia works for Apple and receives a paycheck, the transaction takes place in the market for goods and services.

• c. If Apple sells a computer, the transaction takes place in the market for factors of production.

• d. The factors of production are owned by firms.

• e. None of the answer choices are correct.

Use the Exhibit to answer the question.

If the economy were operating at point E, ________.

• 
  a. the opportunity cost of 20 additional units of eggs is 10 units of bacon

• b. the opportunity cost of 20 additional units of eggs is 20 units of bacon

• c. the opportunity cost of 20 additional units of eggs is 30 units of bacon

• d. 20 additional units of eggs can be produced with no impact on bacon production