DOWNLOAD THE Test Bank for Principles of Microeconomics 8th Edition
TRUE/FALSE Mankiw
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1 : While the scientific method is applicable to studying natural sciences, it is not useful in
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studying an economic system.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
2 : Since natural experiments offered by history cannot be used in economics, carefully
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constructed laboratory experiments must be used.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
3 : An economic model can accurately explain how the economy is organized because it is
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designed to include every feature of the real world.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
4 : All scientific models, including economic models, simplify reality in order to improve our
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understanding of it.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
5 : A circular-flow diagram is a visual model of how an economy is organized.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
6 : In a simple circular-flow diagram, firms own the factors of production and use them to
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produce goods and services.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
7 : In a simple circular-flow diagram, the two types of markets in which households and firms
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interact are the markets for goods and services and the markets for factors of production.a.
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Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
8 : In the markets for goods and services, as in the markets for the factors of production,
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A : true
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Mankiw
B : false
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Correct Answer : B v v v
9 : In a circular-flow diagram, one loop shows the flow of real goods, services, and factors of
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production, and the other loop shows the corresponding flow of dollars.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
10 : A production possibilities frontier is a graph that shows the various combinations of outputs the
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economy can possibly produce given its factors of production and technology.a. Trueb.
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False
A : true
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B : false
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Correct Answer : A v v v
11 : An economy can produce at any point on or inside the production possibilities frontier, but it
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cannot produce at points outside the frontier.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
12 : An efficient outcome in economics is one in which the economy is conserving the largest
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possible amount of resources, while still meeting the needs of society.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
13 : An economy is being efficient if it is impossible to produce more of one good without
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producing less of another.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
v 14 : v
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,DOWNLOAD THE Test Bank for Principles of Microeconomics 8th Edition Mankiw
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Figure 2-11Refer to Figure 2-11. Points A, B, and D represent feasible or attainable outcomes for
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society.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
v 15 : v
Figure 2-11Refer to Figure 2-11. The opportunity cost to the economy of moving from point B to point
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A is 10 dishwashers.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
v 16 : v
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, DOWNLOAD THE Test Bank for Principles of Microeconomics 8th Edition Mankiw
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Figure 2-11Refer to Figure 2-11. The opportunity cost of more doghouses decreases as more doghouses
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are produced.a. Trueb. False
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A : true
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B : false
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Correct Answer : B v v v
17 : The tradeoff between the production of different goods can change because of
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technological improvement over time.a. Trueb. False
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A : true
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B : false
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Correct Answer : A v v v
18 : Economic growth causes a production possibilities frontier to shift outward.a. Trueb. False
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A : true
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B : false
v v
Correct Answer : A v v v
19 : The field of economics is divided into two subfields: microeconomics and
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macroeconomics.a. Trueb. False
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A : true
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B : false
v v
Correct Answer : A v v v
20 : Normative statements describe how the world is, while positive statements prescribe how the
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world should be.a. Trueb. False
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A : true
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B : false
v v
Correct Answer : B v v v
21 : “Society would be better if the welfare system were abolished” is a positive statement, not a
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normative statement.a. Trueb. False
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A : true
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