Question 1

Indiadesh is a country that produces two goods,textiles and computers.Last year,Indiadesh produced 50,000 textiles and 1300 computers.This year it produced 45,000 textiles and 1100 computers.Given no further information,which of the following events could explain this change?
A)Indiadesh decreased unemployment.
B)Indiadesh experienced an improvement in textile-making technology.
C)Indiadesh experienced an improvement in computer-making technology.
D)Indiadesh experienced a reduction in resources.

Accepted Answer

The reduction in production of both textiles and computers can indicate a reduction in resources available for production.

Question 2

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.If this society is producing at point T,
A)there is unemployment.
B)production is efficient.
C)growth can only be achieved through an advancement in technology.
D)the opportunity cost of producing one more sweater is approximately 40 bushels of apples.

Accepted Answer

If the society is producing at point T, it indicates that resources are not being fully utilized, suggesting unemployment.

Question 3

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.

Accepted Answer

The field of economics is traditionally divided into two broad subfields: microeconomics and macroeconomics. Microeconomics deals with the behavior of individual actors such as consumers, firms, and workers, while macroeconomics deals with the overall behavior of the entire economy. The other options listed are not accurate descriptions of the traditional subfields of economics.

Question 4

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.Which combination of points show production possibilities only achievable with improvements in technology or increases in resources?
A)Q,R,U,and V
B)S and X
C)T and W
D)None of the above is correct.

Accepted Answer

Points S and X are outside the original production possibilities curve, indicating that they can only be achieved with improvements in technology or increases in resources. The other points (Q, R, U, V, T, W) can all be achieved within the original curve with the given resources and technology.

Question 5

A microeconomist - as opposed to a macroeconomist - might study
A)the effect of a national healthcare program on the nation's unemployment rate.
B)the effect of new regulations on production in the pulp and paper industry.
C)the effect of changes in interest rates on gross domestic product.
D)the growth rate of production in the economy.

Accepted Answer

A microeconomist typically studies the behavior and decisions of individual firms, households, and markets, rather than the economy as a whole. Therefore, studying the effect of new regulations on production in a specific industry falls under the realm of microeconomics. The other options involve analyzing the economy as a whole or studying the impact of macro-level policies, which are typically the focus of macroeconomics.

Question 6

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.The opportunity cost of moving from point U to point R is
A)60 bushels of apples.
B)80 bushels of apples.
C)80 sweaters.
D)160 sweaters.

Accepted Answer

The opportunity cost of moving from point U to point R is 60 bushels of apples. This is because at point U, the economy is producing 100 bushels of apples and 20 sweaters. At point R, the economy is producing 40 bushels of apples and 100 sweaters. Therefore, the economy must give up 60 bushels of apples in order to produce 80 more sweaters.

Question 7

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?
A)Home experienced increased unemployment.
B)Home experienced a decline in pear-producing technology.
C)Home experienced an improvement in cellular phone-making technology.
D)Home experienced a reduction in resources.

Accepted Answer

The increase in production of cellular phones suggests an improvement in the technology used to make cellular phones.

Question 8

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.If this economy devotes all of its available resources to producing apples,then it will produce
A)0 bushels of apples and 200 sweaters.
B)80 bushels of apples and 160 sweaters
C)180 bushels of apples and 200 sweaters.
D)180 bushels of apples and 0 sweaters.

Accepted Answer

The production possibilities curve shows the trade-off between producing sweaters and producing apples. When all resources are devoted to producing apples, the economy can produce at point A, which is on the horizontal axis, indicating an output of 180 bushels of apples and 0 sweaters. Therefore, the best choice is D.

Question 9

Refer to Figure 2-13.Which of the following combinations of points are both efficient and attainable for this economy?
A)G,H
B)F,I,L
C)F,G,H,I,L
D)J,K

Accepted Answer

The answer of Refer to Figure 2-13.Which of the following...

Question 10

Refer to Figure 2-13.Which of the following statements is true about point G for this economy?
A)Point G is currently unattainable.
B)Point G is efficient.
C)At point G,more cakes are produced than cookies.
D)There is unemployment at point G.

Accepted Answer

The answer of Refer to Figure 2-13.Which of the following...

Question 11

Refer to Figure 2-13.One difference between points F and G is that
A)Point G is unattainable with current resources,but point F is attainable.
B)All resources are fully employed at point F but there is unemployment at point G.
C)More output can be produced at point F but no additional output can be produced at point G.
D)This economy produces more cookies at point G than at point F.

Accepted Answer

The answer of Refer to Figure 2-13.One difference between points...

Question 12

Figure 2-12 
-Refer to Figure 2-12.The shift of the production possibilities frontier from A to B can best be described as
A)a downturn in the economy.
B)economic growth.
C)an enhancement of equality.
D)an improvement in the allocation of resources.

Accepted Answer

The shift of the production possibilities frontier from A to B represents economic growth, which means that the economy is able to produce more goods and services than before with the same amount of resources. This could be due to technological advancements, increased capital investment or a more efficient use of resources.

Question 13

Microeconomics is the study of
A)how money affects the economy.
B)how individual households and firms make decisions.
C)how government affects the economy.
D)how the economy as a whole works.

Accepted Answer

Microeconomics focuses on the behavior of individual households and firms in making decisions about the allocation of scarce resources. It examines how individuals and firms make choices, and how these choices interact to determine the price and quantity of goods and services in the market. Microeconomics does not examine the role of government in the economy or the economy as a whole, which are studied in macroeconomics.

Question 14

Figure 2-15 
-Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.When society moves from point A to point B,
A)the opportunity cost is the same as when society moves from point B to point C.
B)it is giving up cars to get sofas.
C)the opportunity cost is increasing.
D)it moves from an inefficient point to an efficient point.

Accepted Answer

The answer of Figure 2-15 
-Refer to Figure 2-15.Consider the...

Question 15

Figure 2-15 
-Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.The opportunity cost of each car is
A)the slope of the production possibilities frontier.
B)3/2 sofas.
C)2/3 of a sofa.
D)Both a and b are correct.

Accepted Answer

The opportunity cost of each car is represented by the slope of the production possibilities frontier, and if the slope is 3/2, then both A and B are correct.

Question 16

Figure 2-12 
-Refer to Figure 2-12.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?
A)a decrease in unemployment
B)a technological advance in the consumer goods industries
C)a general technological advance
D)an increase in the availability of capital-producing resources

Accepted Answer

A general technological advance would increase the efficiency of production across the board, allowing for more output and thus shifting the production possibilities frontier outward.

Question 17

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.If this society moves from point U to point V,
A)it gives up 40 bushels of apples to get 80 sweaters.
B)it gives up 140 bushels of apples to get 80 sweaters.
C)it gives up 80 sweaters to get 140 bushels of apples.
D)it gives up 80 sweaters to get 40 bushels of apples.

Accepted Answer

The answer of Figure 2-14  Consider the production possibilities...

Question 18

Figure 2-11 
-Refer to Figure 2-11.The shift of the production possibilities frontier from A to B illustrates
A)simultaneous technological advances in the book and DVD industries.
B)a reallocation of resources away from the production of DVDs and toward the production of books.
C)economic growth.
D)All of the above are correct.

Accepted Answer

The shift of the production possibilities frontier from A to B illustrates economic growth, which means an increase in the economy's ability to produce goods and services. This could be because of various factors, including technological improvements, increased productivity, or a better allocation of resources. It is not necessary that both industries have advanced simultaneously, or that there has been a reallocation of resources from one industry to another. Therefore, option C is correct, and options A and B are incorrect.

Question 19

Refer to Figure 2-13.Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?
A)I,L
B)G,H
C)J,K
D)F,G

Accepted Answer

Points J and K are not currently attainable because they lie outside the production possibilities frontier. However, with an improvement in technology, the economy could potentially produce at these points.

Question 20

Macroeconomics is the study of
A)individual decision makers.
B)international trade.
C)economy-wide phenomena.
D)markets for large products.

Accepted Answer

Macroeconomics focuses on economy-wide phenomena, such as inflation, economic growth, and unemployment. It examines the aggregate behavior of households, businesses, and governments to understand how they interact to shape the overall economy. It is distinct from microeconomics, which focuses on individual decision-makers and smaller-scale economic behavior. Therefore, option C is the correct answer.

Quiz 2: Thinking Like an Economist: The Economist As Scientist

Indiadesh is a country that produces two goods,textiles and computers.Last year,Indiadesh produced 50,000 textiles and 1300 computers.This year it produced 45,000 textiles and 1100 computers.Given no further information,which of the following events could explain this change?

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.If this society is producing at point T,

The field of economics is traditionally divided into two broad subfields,

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.Which combination of points show production possibilities only achievable with improvements in technology or increases in resources?

A microeconomist - as opposed to a macroeconomist - might study

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.The opportunity cost of moving from point U to point R is

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.If this economy devotes all of its available resources to producing apples,then it will produce

Refer to Figure 2-13.Which of the following combinations of points are both efficient and attainable for this economy?

Refer to Figure 2-13.Which of the following statements is true about point G for this economy?

Refer to Figure 2-13.One difference between points F and G is that

Figure 2-12 -Refer to Figure 2-12.The shift of the production possibilities frontier from A to B can best be described as

Microeconomics is the study of

Figure 2-15 -Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.When society moves from point A to point B,

Figure 2-15 -Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.The opportunity cost of each car is

Figure 2-12 -Refer to Figure 2-12.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.If this society moves from point U to point V,

Figure 2-11 -Refer to Figure 2-11.The shift of the production possibilities frontier from A to B illustrates

Refer to Figure 2-13.Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Macroeconomics is the study of