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    Chapter 2 Problems-2

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    Alona Calendas
    The document contains 12 multiple choice questions about economic concepts like the circular flow diagram, production possibilities curves, opportunity costs, and slope. The questions test understanding of key ideas including: 1) That the next step in the scientific method after developing an economic theory is to collect and analyze data to test the theory; 2) That the circular flow diagram shows the flow of goods and services from households to firms through markets; and 3) That production possibilities curves illustrate opportunity costs and show attainable versus unattainable combinations of goods given current resources and technology.

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    Chapter 2 Problems-2

    Uploaded by

    Alona Calendas
    73 views4 pages
    The document contains 12 multiple choice questions about economic concepts like the circular flow diagram, production possibilities curves, opportunity costs, and slope. The questions test understanding of key ideas including: 1) That the next step in the scientific method after developing an economic theory is to collect and analyze data to test the theory; 2) That the circular flow diagram shows the flow of goods and services from households to firms through markets; and 3) That production possibilities curves illustrate opportunity costs and show attainable versus unattainable combinations of goods given current resources and technology.

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    The document contains 12 multiple choice questions about economic concepts like the circular flow diagram, production possibilities curves, opportunity costs, and slope. The questions test understanding of key ideas including: 1) That the next step in the scientific method after developing an economic theory is to collect and analyze data to test the theory; 2) That the circular flow diagram shows the flow of goods and services from households to firms through markets; and 3) That production possibilities curves illustrate opportunity costs and show attainable versus unattainable combinations of goods given current resources and technology.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    73 views4 pages

    Chapter 2 Problems-2

    Uploaded by

    Alona Calendas
    The document contains 12 multiple choice questions about economic concepts like the circular flow diagram, production possibilities curves, opportunity costs, and slope. The questions test understanding of key ideas including: 1) That the next step in the scientific method after developing an economic theory is to collect and analyze data to test the theory; 2) That the circular flow diagram shows the flow of goods and services from households to firms through markets; and 3) That production possibilities curves illustrate opportunity costs and show attainable versus unattainable combinations of goods given current resources and technology.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Chapter 2 Problems

    1. Suppose an economist develops a theory that higher food prices arise from higher gas
    prices. According to the scientific method, which of the following is the economist's next step?

    A Collect and analyze data

    B Go to a laboratory and generate data to test the theory

    C Publish the theory without testing it

    D Consult with other economists to see if they agree with the theory

    2. In the simple circular-flow diagram, the participants in the economy are:

    A firms and government.

    B households and firms.

    C households and government.

    D households, firms, and government.

    3. Which of the following is an example of a capital input?

    A A computer

    B A share of stock

    C An hour of a worker's time

    D $50,000

    4. In the circular-flow diagram, which of the following items flows from households to
    firms through the markets for goods and services?

    A Goods and services

    B Dollars paid to land, labor, and capital

    C Dollars spent on goods and services

    D Wages, rent, and profit


    5. An economy's production of two goods is efficient if

    A all members of society consume equal portions of the goods.

    B the goods are produced using only some of society's available resources.

    C it is impossible to produce more of one good without producing less of the other.

    D the opportunity cost of producing more of one good is zero.

    6. Figure 2-13:

    Consider the production possibilities curve for a country that can produce sweaters, apples (in
    bushels), or a combination of the two.

    Refer to Figure 2-13. Which point(s) on the graph show unemployment of resources? T W
    Which point(s) on the graph is(are) unattainable given current resources and technology? S X

    7. Suppose price is measured along the vertical axis on a graph. When price changes, there
    will be a:

    A rotation of the curve.

    B shift of the curve.

    C movement along the curve.

    D change in the slope of the curve.


    8. Table 2-4

    Mobile Phones Pizzas

    0 10,000

    200 8,000

    500 6,000

    900 4,000

    1400 2,000

    2000 0

    Refer to Table 2-4. Consider the production possibilities table for an economy that produces
    only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile
    phones from 200 to 500? 2,000 pizzas.

    9. Figure 2-15:

    Refer to Figure 2-15. What is the slope of the line with points A, B, and C?
    (6 – 7) / (40 – 30) = -1/10
    10.

    Table 2-3
    Production
    Possibilities
    Corn Wheat
    (Bushels) (Bushels)
    2,000 0
    1,600 700
    1,200 1,300
    800 1,800
    400 2,200
    0 2,500

    Refer to Table 2-3. Which of the following combinations of corn and wheat is not currently
    attainable but would be attainable if there was an improvement in overall production technology?

    A 1,600 bushels of corn and 300 bushels of wheat

    B 1,200 bushels of corn and 800 bushels of wheat

    C 1,000 bushels of corn and 2,200 bushels of wheat

    D 400 bushels of corn and 1,800 bushels of wheat

    11. If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

    TRUE FALSE (10-5)/(10-20) = 5/-10 = -1/2

    12. If a major union goes on strike, then the country would be operating inside its production
    possibilities frontier.

    TRUE FALSE

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