1. How can the production possibilities frontiers shit outward?

A. if opportunity costs are reduced

B. if there is an increase in technology

C. if government increases the amount of money in the economy

D. if resources can be moved from the production of one good to another

2. What is a characteristic of a good theory?

A. It is a widely accepted theory

B. It is a theory based on original predications.

C. It is a theory that starts from realistic assumptions

D. It is a theory that helps us understand how the world works

3. What is meant by scientific method?

A. the use of controlled experiments in understanding the way the world works

B. the use of modern electronic testing equipment to understand the world

C. finding evidence to support preconceived theories about how the world works

D. the dispassionate development and testing of theories about how the world works

4. What happened in the market for factors of production?

A. The government provide firms with inputs for the production

B. Firms provide household with goods and services

C. Households provide firms with savings for investment

D. Households provide firms with labor, land, and capital

5. What is a circular-flow diagram?

A. a visual model of the relationship between money, prices, and businesses

B. a mathematical model of how the economy works

C. a model that shows the effects of government and the central banks on the economy

D. a visual model of how the economy is organized