ECON 202 FINAL EXAM Questions with Complete Correct Answers | Grade A+

ECON 202 FINAL EXAM Questions with Complete Correct Answers | Grade A+ Because people's wants are unlimited but resources are scarce, Ans: choices must be made In economics, capital is define as Ans: the natural, unskilled abilities of people The labor market is an exam ple of a Ans: resource market In macroeconomics, we analyze Ans: the overall performance of the economy as a whole An economic model Ans: is a simplification of the real world The basic purpose of economic models is to Ans: provide explanations for, and predictions of, economic events Economics employs a scientific methodology. In part, this means that Ans: economic hypotheses are tested to determine their validity Which of the following is a positive statement? A. An unem ployment rate of 7% of higher is a national disgrace B. Unemployment is a less important problem than inflation C. When the national unemployment rate is 7%, the unemployment rate for inner -city D. Unemployment and inflation are equally important E. An inf lation rate of 7% is too high Ans: When the national unemployment rate is 7%, the unemployment rate for inner -city Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he Ans: has mistakenly inferred causation from observed correlation Someone who commits the fallacy of composition is lik ely to assume that Ans: what is true for the individual is also true for the group Expenses for room and board Ans: are not usually part of the opportunity cost of attending college, because you would have to live somewhere and eat something even if you didn't attend college The opportunity cost of a particular activity Ans: Varies from person to person The law of co mparative advantage says that Ans: the individual with the lowest opportunity cost of producing a particular good should produce it If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then Ans: we can conclu de nothing about absolute advantage On a given production possibilities frontier, which of the following is NOT assumed to be fixed? A. The amount of labor available B. The amount of capital available C. The level of technology D. The amount of land and n atural resources available E. The production of each item Ans: production of each item If all resources are used efficiently to produce goods and services, a nation will find itself producing Ans: somewhere on its production possibilities frontier Points outside the production possibilities frontier represent Ans: currently unattainable only if all resources are used fully and effectively A production possibilities frontier will bowed out if Ans: resources are not perfectly adaptable to making each g ood If the production possibilities curve is a downward -sloping straight line, that would indicate Ans: constant opportunity cost Which of the following would shift the production possibilities frontier outward Ans: an improvement in technology