chapter2testbank.docVIP

Chapter 2 Test Bank Multiple Choice Questions 1. Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. A. normative statement B. budget constraint C. trade-off D. opportunity cost Answer: A Reference: Explanation: Type: Multiple Choice Difficulty: Medium Category: Remember 2. Attending college is a case where the ________________ exceeds the monetary cost. A. budget constraint B. marginal analysis C. opportunity cost D. marginal utility Answer: C Reference: Explanation: Type: Multiple Choice Difficulty: Easy Category: Remember 3. As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good. A. the production possibilities frontier B. allocative efficiency C. scarcity D. utility Answer: A Reference: Explanation: Type: Multiple Choice Difficulty: Easy Category: Remember Figure 2-1 4. Refer to Figure 2-1. An economy is operating at full employment, and then workers in the bread industry are laid off. This change is portrayed in the movement from: A. A to B B. B to E C. C to F D. G to F Answer: C Reference: Explanation: Type: Multiple Choice Difficulty: Easy Category: Apply 5. Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is: A. Point B B. Point C C. Point D D. All points on the production possibilities frontier are equally efficient. Answer: D Reference: Explanation: Type: Multiple Choice Difficulty: Medium Category: Apply 6. Refer to Figure 2-1. The most inefficient point depicted is: A. Point A B. Point C C. Point D D. Point G Answer: D Reference: Explanation: Type: Multiple Choice Difficulty: Easy Category: Analyze 7. Why