WorksheetsECO111-Review 1-3
Total questions: 20
Worksheet time: 11mins
38. Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?
a. a landowner leases land to a farmer
b. a woman buys corn for dinner
c. a farmer hires a teenager to help with harvest
d. a retired farmer sells his combine to a new farmer
39.When two variables have a positive correlation,
a. (i) when the x-variable increases, the y-variable decreases.
b. (ii) when the x-variable decreases, the y-variable increases.
c. (iii) when the x-variable increases, the y-variable increases.
d. More than one of (i), (ii), and (iii) is correct.
40.The slope of a steep upward-sloping line will be a
a. small positive number.
b. large positive number.
c. small negative number.
d. large negative number.
41. Refer to Figure 2-1. Which arrow shows the flow of spending by households?
a. A
b.B
c.C
d.D
42. The slope of a fairly flat upward-sloping line will be a
a. small positive number.
b. large positive number.
c. small negative number.
d. large negative number.
43. Refer to Figure 2-8, Panel (a). In order to gain 2 donuts by moving from point L to point M, society must sacrifice
a. (i) efficiency.
b. (ii) employment
c. (iii) 4 cups of coffee.
d. More than one of (i), (ii), and (iii) is correct.
44. Economists sometimes give conflicting advice because
a. graduate students in economics are encouraged to argue with each other.
b. economists have different values and scientific judgment.
c. economists acting as scientists do not like to agree with economists acting as policy advisers.
d. economics is more of a belief system than a science.
45. The scientific method is
a. the use of modern technology to understand the way the world works.
b. the use of controlled laboratory experiments to understand the way the world works.
c. the dispassionate development and testing of theories about how the world works.
d. the search for evidence to support preconceived theories about how the world works.
48. When economists attempt to simplify the real world and make it easier to understand they make
a. assumptions.
b. mistakes in judgment.
c. predictions.
d. evaluations.
49. Which of the following is not correct?
a. Economists use some familiar words in specialized ways.
b. Economics has its own language and its own way of thinking, but few other fields of study do.
c. Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist’s language.
d. The value of the economist’s language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.
50. The slope of a line is equal to
The slope of a line is equal to
b. the change in the value of y divided by the change in the value of x.
c. the horizontal distance divided by the vertical distance.
d. the value of y divided by the value of x.
51. Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 55 units of food and 30 machines. Which of the following statements is correct?
a. Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 30
b. Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry.
c. In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies.
d. The technological advance reduced the amount of resources needed to produce 30 machines, so these resources could be used to produce more food.
52. Refer to Figure 2-7. In order to reach point C, the economy would have to
a. (i) acquire more resources or experience a technological advance.
b. (ii) begin using its available resources more efficiently than it is currently using them.
c. (iii) shift resources away from the production of ribeye steaks and toward production of books.
d. None of (i), (ii), and (iii) are correct; the economy will never be able to reach point C.
53. Factors of production are
a. used to produce goods and services.
b. also called output.
c. abundant in most economies.
d. assumed to be owned by firms in the circular-flow diagram.
54. The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in
a. opinions and education.
b. opinions and values.
c. scientific judgments and education.
d. scientific judgments and values.
55. A model can be accurately described as a
a. theoretical abstraction with very little value.
b. device that is useful only to the people who created it.
c. realistic and carefully constructed theory.
d. simplification of reality.
56. Refer to Table 2-2. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?
a. 75 waffles
b. 150 waffles
c. 250 waffles
d. 325 waffles
57. The production possibilities frontier is a graph that shows the various combinations of output that an economy
a. should produce
b. wants to produce.
c. can produce.
d. demands
58. Refer to Figure 2-9, Panel (a). In order to gain 2 radios by moving from point S to point T, society must sacrifice
a. (i) 6 televisions.
b. (ii) employment.
c. (iii) efficiency
d. More than one of (i), (ii), and (iii) is correct.
59. The field of economics is traditionally divided into two broad subfields,
a. national economics and international economics.
b. consumer economics and producer economics.
c. private sector economics and public sector economics.
d. microeconomics and macroeconomics.
