Question

Which of the following statements is true?

a	The key reason for increasing O.C. is that most resources are better suited to some purposes than to others.
b	If the O.C. was constant, the PPF would be a convex line (This is not “realistic”).
c	Graphically, economic growth is shown as a shift to the left of the PPF.
d	All of the above.
e	Only a) and b)

Question 2 (1 point)

Which of the following statements is true?

a	Economic phenomena include recessions, inflation, and unemployment.
b	Economics uses the scientific method.
c	A model is a simplification of reality
d	All of the above.
e	Only a) and b)

Question 3 (1 point)

Which of the following statements is true?

a	The opportunity cost of producing a good increases as we produce more of the good.
b	In economics, “law” means “empirical regularity”, which is something that we observe that happens “very rarely” in real life.
c	When the economy is operating on the PPF (it is being efficient), the only way to get more of one good is to give up some of the other because all resources are already being used.
d	All of the above.
e	Only a) and c)

Answer 1

Ans 1. Option a

As we produce more of one good, the opportunity cost of producing that good increases as more an more of the other good could have been produced from the resources that are being used in production of first good.

Ans 2. Option d

Economics study recession, inflation and unemployment under its macroeconomic branch.

Economics uses scientific methods in reading and  analysing the data and determining its trend.

A model simplifies the real scenario and drop some variables to study the affect of variables on each other.

Ans 3. Option e

As we produce more of one good, resources used in its production increases causing its opportunity cost to increase.

Economy faces a tradeoff because pf scarcity of resources, so, to produce more of one good, production of other good has to decrease.

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