Microeconomics Overview Quiz

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Questions and Answers

Which topic relates to microeconomics?

The relationship between the inflation rate and changes in the quantity of money.

A firm’s decision about how many workers to hire. (correct)

The effect of government regulations on auto emissions.

The impact of higher national saving on economic growth.

The mayor’s question about how much vaccine will be in stock requires which type of assessment?

Descriptive assessment.

Positive assessment. (correct)

Normative assessment.

Qualitative assessment.

If the city charges $25 per shot, which of the following questions is normative?

Should the city engage in such a scheme? (correct)

What will be the profit per shot?

How many people will pay?

How many doses will be available?

In discussing trade-offs, what does the production possibilities frontier illustrate?

Efficiency and maximum output. Signup and view all the answers

What does John Maynard Keynes suggest is necessary for the master-economist?

A combination of skills including philosophy and history Signup and view all the answers

How does Keynes describe the nature of economics as a subject?

An easy subject at which very few excel Signup and view all the answers

What is the primary purpose of studying the present in light of the past according to Keynes?

To inform decisions for future actions Signup and view all the answers

Which of the following best defines opportunity cost?

The value of the next best alternative forgone Signup and view all the answers

What does the production possibilities frontier illustrate?

The maximum possible production of two goods given resources Signup and view all the answers

Why are scientific methods important in the study of social sciences?

They provide a structured way to analyze and interpret complex data Signup and view all the answers

In which capacity does Keynes suggest an economist must be 'aloof and incorruptible'?

As an artist creating innovative models Signup and view all the answers

What does Keynes imply about the breadth of an economist's focus?

An economist should study a wide array of human interactions and institutions Signup and view all the answers

What is one purpose of microeconomics?

Understand decision making of households and firms Signup and view all the answers

Which statement describes a positive statement in economics?

Unemployment rates will rise during a recession. Signup and view all the answers

What is the primary focus of macroeconomics?

Examining overall economic forces and trends Signup and view all the answers

Why do economists build models and assumptions?

To simplify complex realities for better understanding Signup and view all the answers

Which of the following is an example of a normative statement?

Raising the minimum wage will reduce poverty. Signup and view all the answers

What do conflicting advices among economists often stem from?

Different opinions and judgments Signup and view all the answers

What is represented in the circular flow diagram?

Interactions between consumers and producers Signup and view all the answers

Which of these is a role of economists as policy makers?

Establishing policies for economic improvement Signup and view all the answers

An example of a positive statement is:

Access to education is currently limited in many areas. Signup and view all the answers

What is an economic model best defined as?

A simplified representation of some aspect of the economy. Signup and view all the answers

In the circular-flow diagram, who are the sellers in the markets for the factors of production?

Households Signup and view all the answers

A point inside the production possibilities frontier signifies which of the following?

Feasible but not efficient Signup and view all the answers

If consumers begin to prefer hot dogs due to new health benefits, the result would likely be?

Expansion of the production possibilities frontier Signup and view all the answers

Which of the following topics does NOT fall under microeconomics?

Influence of the government budget deficit on economic growth Signup and view all the answers

In the debate between Peter and Christ regarding tax fairness, which aspect might influence the argument?

Tax percentage Signup and view all the answers

What type of argument would support the idea that your roommate should change her behavior?

Shared responsibility in the household Signup and view all the answers

Which viewpoint would justify that you should be the one to buy earphones?

Your more frequent need for them Signup and view all the answers

When discussing disagreement in tax fairness between Peter and Christ, which factor is most likely considered?

Marginal tax rates alone Signup and view all the answers

What does a movement along the production possibilities frontier imply?

Resource allocation changes without improving efficiency Signup and view all the answers

What do economists attempt to achieve by making assumptions and building models?

To create positive statements about the world Signup and view all the answers

What distinguishes microeconomics from macroeconomics?

Microeconomics analyzes individual behavior while macroeconomics assesses overall economy trends Signup and view all the answers

In the class activity about the loud music, what is a primary normative statement made?

You value peace and quiet more than the cost of earphones. Signup and view all the answers

What did the discussion about earphones reveal about efficiency in economic terms?

The benefits of buying the earphones outweigh the costs for you Signup and view all the answers

What is an example of a positive statement in the context of the loud music exchange?

The earphones cost $15. Signup and view all the answers

Which statement most accurately represents normative economic thinking?

It is unfair for one person to bear the cost of shared resources. Signup and view all the answers

What conclusion can be drawn from the discussion of opportunity costs?

Decisions always require sacrificing one option for another. Signup and view all the answers

What is the core principle behind the Production Possibility Frontier?

It illustrates the concept of economic efficiency and trade-offs. Signup and view all the answers

Study Notes

Course Information

Subject: ECO202: Principles of Microeconomics
Instructor: Vrak Thanit
Textbook: Principles of Microeconomics by N. Gregory Mankiw (10th Edition)
Chapter 2: Thinking Like an Economist

Chapter 2: Thinking Like an Economist - Table of Contents

Discussion
Review
Class Activities
Homework & Exercises

Chapter 2: Thinking Like an Economist - Discussion Points

Scientific method in social science
Connection between assumptions and models in real-world applications
Calculating opportunity cost
Understanding production possibility frontiers
Explaining how money and products/services move around the world

Chapter 2: Thinking Like an Economist - Key Concepts

Economists as Scientists: develop models, build assumptions to simplify the world, create positive statements (description of how the world is), use data
Economists as Policy Makers: establish policies to improve the economy, make normative statements (telling how the world should be), opinions, recommendations for change, conflicting advice.
Micro vs. Macro Economics: Macroeconomics is the study of the whole economy, including trends and forces, while Microeconomics examines decision making at the individual level (e.g., households, firms).
Positive vs. Normative Statements: Positive statements describe the world as it is, while normative statements prescribe how the world should be (e.g., "inflation increases," vs. "inflation should be lowered")

Chapter 2: Thinking Like an Economist - Learning Outcomes

Economists as Scientist: Build models (use assumptions to simplify); Make positive statements (describe the world based on observable facts); use data to form conclusions. Use Circular Flow and Production Possibilities Diagrams.
Economists as Policy Makers: Establish policies to improve the economy; Make normative statements (prescriptive, what the world should be like); Opinions and recommendations may vary due to conflicting opinions/judgments.
Micro vs. Macro Summary: Micro focuses on individual actors like households and firms, while macro looks at forces and trends impacting the entire economy.

Chapter 2: Thinking Like an Economist - Class Activities

Production Possibility Frontier (PPF) activities: illustrate trade-offs through a game
Thinking Like an Economist (Broken Window Fallacy) activity: explain/explore concept
Positive vs. Normative Statements activity: identify, contrast, and/or create examples
Disagreement in Policies activity: analyzing different perspectives/ viewpoints on a policy issue
Economic Model Application Activity: (examples in the quick quiz on models include production possibility frontier, circular flow, etc.)
Quick Quiz: identify economic models, types of statements, and economic concepts, including topics in microeconomics and macroeconomics

Chapter 2: Thinking Like an Economist - Homework & Exercises: Quick Quizzes

Economic Models: Definition/ characteristics
Circular Flow diagrams: describe basic functions
Production Possibilities Frontier: Understanding efficiency
Micro vs. Macro Economics: distinguishing between the two economic perspectives
Positive vs. Normative statements: distinguishing between the two types of statements
Classify economic topics: Micro or Macro
Positive assessment vs. Normative assessment: application of the two types of statement analysis
Homework Questions for Review (model description, efficiency, conflicting advice)
Problems & Applications (trade-offs, production possibility frontiers, policy changes, and consequences)

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Description

Test your understanding of key concepts in microeconomics with this engaging quiz. Explore topics such as opportunity cost, the production possibilities frontier, and the insights of economist John Maynard Keynes. Determine your mastery of positive and normative statements in the context of economic analysis.