QUESTION 1

Points inside of a Production Possibilities Curve are very desirable because we produce a combination of two goods by using the best available technology.

True

False

QUESTION 2

A normative theory explains how things should be and that is why we avoid it in our economic analysis.

True

False

QUESTION 3

Points to the right of a PPC are easily achievable if our technology improved or we had more of factors of productions such as labor, capital, entrepreneurship, and land.

True

False

QUESTION 4

A Production Possibilities Curve (Frontier) shows the opportunity cost of producing a product in terms of the number of units of the other product that we have to give up.

True

False

QUESTION 5

We can hire the best economist in the country, give them enough resources to find the best point of production on a PPC.

True

False

QUESTION 6

A Production Possibilities Curve (frontier) shows the opportunity cost of producing a product in American dollars.

True

False

QUESTION 7

The three steps involved in the methodology used by economists are: 1) Make a hypothesis; 2) find data that supports it; and 3) reject all other data.

True

False

QUESTION 8

A theory is a hypothesis that has been tested scientifically and proved to be true 99 or 95 times out of 100 times.

True

False

QUESTION 9

Economists gather data about any economic issue that they study. Then, make a hypothesis and test it to come up with a theory. Finally, make economic recommendations (policy) based on the theory.

True

False

QUESTION 10

A positive theory deals with objective state of affairs. It is independent of any individual's value system.

True

False