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A visual model of the economy that shows how dollars flow through markets among households and firms. a. Circular-flow Diagram b. Economic Models c. Scientific Method d. Opportunity Cost

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a. Circular Flow Diagam

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The study of how households and firms make decisions and how they interact in markets. a. Macroeconomics b. Microeconomics c. Factors of Production d. Economic Models

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b. Microeconomics

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A graph showing the combinations of output the economy can possibly produce given the available factors of production and the available production technologies. a. Factors of Production b. Positive Statements c. Production Possibilities Frontier d. Circular-flow Diagram

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c. Production Possibilities Frontier

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The study of economy-wide phenomena. a. Microeconomics b. Macroeconomics c. Scientific Method d. Economic Models

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b. Macroeconomics

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Economic models are? a. Created to duplicate reality b. Built with assumptions c. Usually made of wood and plastic d. Useless if thy are simple

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b. Built with assumptions

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Which of the following statements is normative? a. Printing too much money causes inflation. b. People work harder if the wage is higher. c. The unemployment rate should be lower. d. Large governement deficits cause...

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c. The unemployment rate should be lower.

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Positive statements are? a. Microeconomics b. Macroeconomics c. Statements of prescription that involve value judgments. d. Statements of description that can be tested.

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d. Statements of description that can be tested.

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Points on the production possibilities frontier are? a. Efficient b. Inefficient c. Unattainable d. None of the above

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a. Efficient

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Which of the following will not shift a countries production possibilities frontier outward? a. An increase in capital stock b. An advance in technology c. A reduction in employment d. An increase in the labor force

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c. A reduction in employment

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Which of the following issues is related to microeconomics? a. The impact of money on inflation b. The impact of technology on economic growth c. The impact of the deficit on saving d. The impact of oil prices on auto production.

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d. The impact of oil prices on auto production.

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What does PPF stand for? a. Production Possibility Frontier b. Possible Production Factors c. Circular Flow Diagram d. Production Per Frontier

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a. Production Possibility Frontier

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Which of the following is an example of microeconomics? a. The effect of government regulations on auto emissions b. The impact of higher national saving on economic growth c. A family's decision about how much income to save d. The relationship between the inflation rate and changes in the quantity of money.

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c. A family's decision about how much income to save

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Which of the following is a positive statement? a. A reduction in the rate of growth of money will reduce inflation b. Society faces a short-run tradeoff between inflation and unemployment c. The Federal Reserve should reduce the rate of growth of money d. Society ought to require welfare recipients to look for jobs

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b. Society faces a short-run tradeoff between inflation and unemployment

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Economic models are? a. Created to duplicate reality b. Built with assumptions c. Usually made of wood and plastic d. Useless if they are simple

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b. Built with assumptions

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If a point is inside the production possibilities frontier its. a. Inefficient b. Efficient c. Unattainable d. Normative

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a. Inefficient

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If a point is outside the PPF it is. a. Inefficient b. Efficient c. Unattainable d. Normative

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c. Unattainable

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If a point is on the PPF, it is a. Inefficient b. Efficient c. Unattainable d. Normative

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b. Efficient

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What is a production possibilities frontier? a. A graph that shows the combinations of output the economy can possibly produce give the available factors of production and the available production technology b. A company c. Created to duplicate reality d. Capital

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a. A graph that shows the combinations of output the economy can possibly produce give the available factors of production and the available production technology

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Normative statements are? a. Microeconomics b. Macroeconomics c. Statements of prescription that involve value judgements d. Statements of description that can be tested

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c. Statements of prescription that involve value judgements

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Positive statements are? a. Microeconomics b. Macroeconomics c. Statements of prescription that involve value judgements d. Statements of description that can be tested

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d. Statements of description that can be tested

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Normative statements are? a. Simplifications of reality base on assumptions b. Descriptions of the world as it is c. Descriptions of the world as it ought to be d. Used to test theries

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c. Descriptions of the world as it ought to be

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Economic models are? a. Built with assumptions b. Usually made of wood and plastic c. Created to duplicate reality d. Uswless if they are simple

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a. Built with assumptions

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Which of the following isn't a factor of production? a. Money b. Capital c. Land d. All of the above

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d. All of the above

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Points on the production possibilities frontier are? a. Inefficient b. Efficient c. Unattainable d. Normative

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b. Efficient

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The scientific method requires that? a. The scientist be objective b. The scientist use test tubes c. Only incorrect theories are tested d. Only correct theories are tested

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a. The scientist be objective

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Which of the following issues is related to microeconomics? a. The impact of money on inflation b. The impact of technology on economic growth c. The impact of the deficit on saving d. The impact of oil prices on auto production.

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d. The impact of oil prices on auto production.

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Positive statements are? a. Microeconomics b. Macroeconomics c. Statements of prescription that involve value judgements d. Statements of description that can be tested

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d. Statements of description that can be tested

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Macroeconomics is the study of economy-wide phenomena such as a. Federal deficit b. The rate of unemployment c. Policies to improve our standard of living d. All of the above

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d. All of the above

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Which statement about microeconomics is ture? a. It's the study of how they interact in specific markets b. It deals with economy as a whole c. It's the building block for macroeconomics d. Both A and C

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d. Both A and C

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Which of the following will not shift a countries production possibilities frontier outward? a. An increase in capital stock b. An advance in technology c. A reduction in employment d. An increase in the labor force

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c. A reduction in employment

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"Minimum wage laws cause unemployment." This is an example of? a. A normative statement b. A positive statement c. A negative statement d. A derogative statement

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b. A positive statement

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Which of the following possesses the duty to advise the president and write the annual Economic report of the President. a. Council of Economic Advisers b. Federal Reserve c. Congressional Budget Office d. The Department of Justice

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a. Council of Economic Advisers

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Economists in the Department of Labor analyze data on? a. Money b. Capitalists c. Workers d. Badgers

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c. Workers

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Production possibilities frontier shows? a. Scarcity b. Trade-offs c. Efficiency d. Economic growth e. All of the above.

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e. All of the above

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Because of the differences in ______, economists sometimes disagree about public policy. a. Income b. Unemployment c. Values d. Social Security

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c. Values

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What is macroeconomics? a. The study of economy wide phenomena b. The study of major parts of economics c. How big companies act in the economy d. None of the above

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a. The study of economy wide phenomena

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What is microeconomics a. How an individual acts in an economy b. The study of how households and firms c. Small businesses d. The study of economics in a small community

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b. The study of how households and firms

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What is the visual model of the economy? a. A box of nerds b. Circular Flow Diagram c. A box chart d. A Vendiagram

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b. Circular Flow Diagram

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Households and firms interact with two types of markets? a. Markets for goods and services, factors of production b. Markets for goods and services, wages, rent, & production c. Factors of production, revenue d. Revenue, spending

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a. Markets for goods and services, factors of production

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In the market for goods and services, are firms buyers or sellers? a. Buyers, because they buy the output of goods and services b. Sellers, because they produce the goods and services c. None of the above d. All of the above

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b. Sellers, because they produce the goods and services

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Why is economics like science? a. Economists use observations b. Economists and science are not related c. Because economists use the scientific theory d. None of the above

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c. Because economists use the scientific theory

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What is the difference between microeconomics and macroeconomics? a. Microeconomics is smaller than macroeconomics b. Macroeconomics is larger than microeconomics c. Microeconomics and macroeconomics have no major differences d. Microeconomics focuses specifically on the individual, while macroeconomics focuses on the big picture

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d. Microeconomics focuses specifically on the individual, while macroeconomics focuses on the big picture

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What are positive statements? a. Description of the world as it is b. Description of an ideal society c. Description of how the world should be d. None of the above

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a. Description of the world as it is

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What does the production possibilities frontier show? a. The productivity of people b. The possible inputs of the economy c. The possible outputs of the economy d. All of the possibilities of the economy

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c. The possible outputs of the economy

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What do economists make assumptions? a. Because they thing they know everything b. To simplify the complex world c. They're lazy d. All of the above

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b. To simplify the complex world

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What does a circular-flow diagram show? a. The flow of goods b. The flow of services c. Factors of production and monetary payment d. All of the above

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d. All of the above

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Why do economists use models? a. They don't believe in models b. The use models to learn about the world c. To simplify ideas d. To help people learn

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b. The use models to learn about the world

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What is a normative statement? a. An unusual statement b. Description on the world as it is c. Study of phenomena d. None of the above

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d. None of the above

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What is a demonstration of economic growth? a. Inflation b. Deflation c. Macroeconomics d. None of the above

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d. None of the above

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What is opportunity cost? a. The opportunity that something costs b. The study of costs c. Simplifications of reality based on assumptions d. Whatever is given up to get something else

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d. Whatever is given up to get something else

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What is the study of how firms and households make financial decisions? a. Macroeconomics b. Marginal Benefits c. Microeconomics d. Short-run trade-offs

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c. Microeconomics

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Define a normative statement a. A statement of how the world ought to be b. A description of normal financial behavior c. A description of how the world is d. A proposition of short-run trade-offs

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a. A statement of how the world ought to be

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Why do economists use presumptions? a. To form incentives b. To simplify the complex world c. To disagree with other economists d. To create short-run trade-offs

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b. To simplify the complex world

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What is the function of firms in a circular flow chart? a. To buy and consume goods and services b. To set wages c. To produce and sell goods and services d. Short-run trade-offs

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c. To produce and sell goods and services

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What article does the council of economic advisers write? a. "Economic Report of the President" b. "Playboy Economics" c. "ESPN (Economic Sports Programming Network)" d. "Short-run trade-offs"

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a. "Economic Report of the President"

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Which of these terms is correctly written? a. Short run trade-offs b. Shortrun trade offs c. Shortrun tradeoffs d. Short-run trade-offs

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d. Short-run trade-offs

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Why do economists use the scientific method? a. It makes math easier b. It is required to be considered reliable c. Because it is applicable to studying the economy d. Short-run trade-offs

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b. It is required to be considered reliable

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Which of the following is a positive statement? a. A statement explaining how the world is b. A statement of how the world ought to be c. A statement of how nice someone is d. A short-run trade-off

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a. A statement explaining how the world is

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What is a circular flow diagram? a. A model of the economy through households and firms b. None of the above c. A & B d. Short-run tradeoffs

answer

a. A model of the economy through households and firms

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Why do economists disagree? a. They disagree on the validity of the alternative positive theories b. They may have different values c. A & B d. Short-run trade-offs

answer

c. A & B

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