Question 1

Figure 2-16​ 
-Refer to Figure 2-16.It is possible for this economy to produce
A)30 gadgets and 90 widgets.
B)50 gadgets and 80 widgets.
C)80 gadgets and 50 widgets.
D)90 gadgets and 30 widgets.

Accepted Answer

The answer of Figure 2-16​ 
-Refer to Figure 2-16.It is...

Question 2

Figure 2-16​ 
-Refer to Figure 2-16.It is not possible for this economy to produce at point
A)A.
B)B.
C)C.
D)D.

Accepted Answer

Point D lies outside the production possibilities frontier (PPF) meaning that it is not possible for this economy to produce at this point. Therefore, the best choice would be any point on the PPF, such as A, B, or C.

Question 3

A macroeconomist - as opposed to a microeconomist - would study
A)the effects of rent control on housing in New York City.
B)the effects of foreign competition on the US auto industry.
C)the effects of borrowing by the federal government.
D)the effects of raising the gasoline tax on transit ridership.

Accepted Answer

Macroeconomics focuses on the economy as a whole, including national fiscal policies like federal government borrowing, while microeconomics deals with individual markets and industries.

Question 4

Figure 2-16​ 
-Refer to Figure 2-16.The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is
A)10 gadgets.
B)30 widgets
C)10 gadgets and 30 widgets.
D)0 gadgets.

Accepted Answer

Moving from point C to point A would result in a gain of approximately 10 gadgets, but it would also result in a loss of approximately 30 widgets. Therefore, the opportunity cost of obtaining those 10 additional gadgets is 30 widgets. The best choice would be to stay at point C or move to point B, where the opportunity cost is lower.

Question 5

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?
A)the effect of foreign direct investment on economic growth
B)the effect of a sales tax on the cigarette industry
C)the effect of an investment tax credit on the economy's capital stock
D)the effect of a war on government spending

Accepted Answer

Microeconomics focuses on the behavior of individual firms and households, while macroeconomics examines the overall performance and behavior of the entire economy. The effect of a sales tax on the cigarette industry is a specific aspect of the behavior of a particular industry and would therefore be studied by a microeconomist.

Question 6

A macroeconomist - as opposed to a microeconomist - might study the effect of
A)changes in the money supply on the inflation rate.
B)an increase in the gas tax on fuel consumption.
C)a technological advance on the natural gas industry.
D)a hurricane on prices in the orange industry.

Accepted Answer

Macroeconomists study the overall functioning of the economy, including factors like inflation and the money supply. Changes in the money supply can have broad impacts on the economy, making them a topic of interest for macroeconomists. The other choices are more likely to be studied by microeconomists, who focus on individual markets and consumer behavior within those markets.

Question 7

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?
A)the effect of an increase in the alcohol tax on the market for beer
B)the effect of foreign competition on the domestic auto industry
C)the effect of a price war in the airline industry
D)the effect of an increase in the minimum wage on an economy's overall rate of unemployment

Accepted Answer

Macroeconomics focuses on the economy as a whole and analyzes factors that affect the overall performance of the economy, such as inflation, unemployment, and economic growth. The effect of an increase in the minimum wage on an economy's overall rate of unemployment is a macroeconomic issue, as it affects the employment rate of an entire economy. The other three choices are all examples of microeconomic issues, as they involve the analysis of individual markets and industries.

Question 8

Figure 2-16​ 
-Refer to Figure 2-16.The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately
A)10 gadgets.
B)30 widgets
C)10 gadgets and 30 widgets.
D)0 gadgets.

Accepted Answer

The opportunity cost of moving from point A to point C is the number of gadgets given up, which is 10 gadgets.

Question 9

Figure 2-16​ 
-Refer to Figure 2-16.Efficient production is represented by which point(s)?
A)B,D,E
B)D
C)C,B
D)A,C

Accepted Answer

The answer of Figure 2-16​ 
-Refer to Figure 2-16.Efficient production...

Question 10

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?
A)the effects of rent control on the availability of housing in New York City
B)the economic impact of tornadoes on cities and towns in Oklahoma
C)how tariffs on shoes affects the shoe industry
D)the effect on the economy of changes in the nation's unemployment rate

Accepted Answer

Macroeconomics deals with the aggregate performance of the economy as a whole, including factors such as national income, unemployment, inflation, and economic growth. Option D specifically looks at the effect on the economy of changes in the nation's unemployment rate, which is a macroeconomic concept.

Question 11

Which of the following statements best captures the relationship between microeconomics and macroeconomics?
A)For the most part,microeconomists are unconcerned with macroeconomics,and macroeconomists are unconcerned with microeconomics.
B)Microeconomists study markets for small products,whereas macroeconomists study markets for large products.
C)Microeconomics and macroeconomics are distinct from one another,yet they are closely related.
D)Microeconomics is oriented toward policy studies,whereas macroeconomics is oriented toward theoretical studies.

Accepted Answer

While microeconomics and macroeconomics have different focuses, they are interrelated and often influence each other. For example, macroeconomic conditions such as interest rates can affect individual behavior in microeconomic markets. Additionally, policy decisions made at a macroeconomic level can have implications for microeconomic markets. Therefore, microeconomics and macroeconomics are distinct but closely related fields.

Question 12

Figure 2-16​ 
-Refer to Figure 2-16.Suppose this economy is producing at point B.Which of the following statements would best explain this situation?
A)The economy does not have enough resources to produce more of either product.
B)The economy's available technology prevents it from producing more of either product.
C)There is widespread unemployment in the economy.
D)The economy is getting all it can from the scarce resources available.

Accepted Answer

Point B is likely inside the production possibilities frontier, indicating that resources are not being fully utilized, which suggests widespread unemployment.

Question 13

Figure 2-16​ 
-Refer to Figure 2-16.Which of the following statements is true about the opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C?
A)The opportunity cost is the 70 gadgets that are no longer produced.
B)The opportunity cost is zero because the economy does not give up producing widgets to go from producing at point B to point C.
C)The opportunity cost is greater than zero widgets but less than 70 gadgets.
D)The opportunity cost is greater than 70 gadgets.

Accepted Answer

The answer of Figure 2-16​ 
-Refer to Figure 2-16.Which of...

Question 14

Figure 2-16​ 
-Refer to Figure 2-16.If this economy devotes all of its resources to the production of gadgets,then it will produce
A)0 gadgets and 100 widgets.
B)50 gadgets and 70 widgets.
C)100 gadgets and 0 widgets.
D)80 gadgets and 90 widgets.

Accepted Answer

According to the production possibilities curve (PPC) in Figure 2-16, the economy can produce a maximum of either 100 gadgets or 90 widgets by fully utilizing all its resources. However, if the economy decides to produce only gadgets and devotes all its resources to this task, it can produce 100 gadgets and 0 widgets, as shown by the point P on the horizontal axis of the PPC. Therefore, choice C is the best answer. Choosing any other combination of gadgets and widgets would result in a production level that is lower than what the economy is capable of achieving given its resources.

Question 15

Figure 2-16​ 
-Refer to Figure 2-16.Inefficient production is represented by which point(s)?
A)A,C
B)B,C
C)B,E
D)D

Accepted Answer

The answer of Figure 2-16​ 
-Refer to Figure 2-16.Inefficient production...

Question 16

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?
A)the impact of minimum-wage laws on employment in the fast food industry
B)the effect of changes in household saving rates on the growth rate of national income
C)the impact of faster money growth on the rate of inflation
D)a comparison of alternative tax policies and their respective impacts on the rate of the nation's economic growth

Accepted Answer

The impact of minimum-wage laws on employment in the fast food industry is a topic that falls under microeconomics. Microeconomics studies the behavior of individuals and firms in making decisions and how these decisions interact with one another in markets. It focuses on the analysis of small economic units such as individual consumers, firms, and markets.

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

Figure 2-16 -Refer to Figure 2-16.It is possible for this economy to produce

Figure 2-16 -Refer to Figure 2-16.It is not possible for this economy to produce at point

A macroeconomist - as opposed to a microeconomist - would study

Figure 2-16 -Refer to Figure 2-16.The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

A macroeconomist - as opposed to a microeconomist - might study the effect of

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Figure 2-16 -Refer to Figure 2-16.The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Figure 2-16 -Refer to Figure 2-16.Efficient production is represented by which point(s) ?

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Figure 2-16 -Refer to Figure 2-16.Suppose this economy is producing at point B.Which of the following statements would best explain this situation?

Figure 2-16 -Refer to Figure 2-16.Which of the following statements is true about the opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C?

Figure 2-16 -Refer to Figure 2-16.If this economy devotes all of its resources to the production of gadgets,then it will produce

Figure 2-16 -Refer to Figure 2-16.Inefficient production is represented by which point(s) ?

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

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

Figure 2-16​ -Refer to Figure 2-16.It is possible for this economy to produce

Figure 2-16​ -Refer to Figure 2-16.It is not possible for this economy to produce at point

A macroeconomist - as opposed to a microeconomist - would study

Figure 2-16​ -Refer to Figure 2-16.The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is