Microeconomics (Quiz questions) – Flashcards

Which of the following is not an assumption of the productions possibilities frontier? A)A country produces only two goods or types of goods. B)Technology does not change. C)The amount of available resources does not change. D)There is a fixed quantity of money.

If an economy is producing efficiently, then A)there is no way to produce more of one good without producing less of another good. B)it is possible to produce more of both goods without increasing the quantities of inputs that are being used. C)it is possible to produce more of one good without producing less of another good. D)it is not possible to produce more of any good at any cost.

The production possibilities frontier illustrates A)the trade-off between efficiency and equality. B)the combination of output that an economy should produce. C)the combination of output that each member of society should consume. D)None of the above is correct.

Production possibilities frontiers are usually bowed outward. This is because A)the more resources a society uses to produce one good, the fewer resources it has available to produce another good. B)it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. C)of the effects of technological change. D)resources are specialized; that is, some are better at producing particular goods rather than other goods.

A production possibilities frontier can shift outward if A)government increases the amount of money in the economy. B)there is a technological improvement. C)resources are shifted from the production of one good to the production of the other good. D)the economy abandons inefficient production methods in favor of efficient production methods.

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.

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.

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.

The production possibilities frontier is used to illustrate some basic economic ideas, including A)scarcity. B)opportunity cost. C)economic growth. D)All of the above are correct.

Normative statements are A)prescriptive, whereas positive statements are descriptive. b)descriptive, whereas positive statements are prescriptive. C)backward-looking, whereas positive statements are forward-looking. D)forward-looking, whereas positive statements are backward-looking.

Normative conclusions A)come from positive analysis alone. b)are based on ignorance of positive analysis. C)involve value judgments. d)reflect the economist's role as scientist.