Question 1

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two.
-Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q?

Accepted Answer

80 bushels...

Question 2

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-10
Panel (a)  Panel (b) 
  
-Refer to Figure 2-10, Panel (a) . Production is

Accepted Answer

A)   possible at points V, W, Y, and Z, but efficient only at points V, W, and Z.
B)   possible at points V, W, Y, and Z, but efficient only at point Y.
C)   possible at points U, V, W, and Z, but efficient only at points V, W, and Z.
D)   possible at points U, V, W, and Z, but efficient only at point U.E) All of the above
F) A) and B)

Question 4

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A)   Following the most recent recession, the economy is recovering at a slower than usual pace.
B)   To stimulate the economy during the most recent recession, the federal government increased spending.
C)   In response to the most recent recession, the federal government extended the duration of unemployment benefits.
D)   The federal government's responses to the most recent recession were insufficient.E) None of the above
F) A) and D)

Question 5

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 6

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 7

The Council of Economic Advisers

Accepted Answer

A)   was created in 1946.
B)   advises the president of the United States on economic policy matters.
C)   writes the annual Economic Report of the President.
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 8

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)   similar opinions about the validity of economic theories
B)   significant differences in education
C)   differences in personal values
D)   a reliance on normative statement for research theoriesE) All of the above
F) B) and C)

Question 9

Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction.

Accepted Answer

A)   The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
B)   The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
C)   Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
D)   Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.E) None of the above
F) A) and C)

Question 10

The most common data for testing economic theories come from

Accepted Answer

A)   carefully controlled and conducted laboratory experiments.
B)   computer models of economies.
C)   historical episodes of economic change.
D)   centrally planned economies.E) A) and D)
F) All of the above

Question 11

The y-coordinate is the

Accepted Answer

A)   first number of an ordered pair and represents the point's horizontal location.
B)   second number of an ordered pair and represents the point's horizontal location.
C)   first number of an ordered pair and represents the point's vertical location.
D)   second number of an ordered pair and represents the point's vertical location.E) A) and B)
F) A) and C)

Question 12

When two variables have a negative correlation and the x-variable decreases,

Accepted Answer

A)   the y-variable increases.
B)   the y-variable decreases.
C)   the y-variable stays the same.
D)   the x-variable can never be positive.E) A) and B)
F) A) and C)

Question 13

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Accepted Answer

A)   Transit ridership increased in Atlanta following an increase in gas prices.
B)   Federal tax revenue increased following a decrease in the tax rate.
C)   Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances.
D)   Following the imposition of austerity measures, the growth rate of the economy in Greece slowed.E) B) and D)
F) B) and C)

Question 14

Figure 2-8 
-Refer to Figure 2-8. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Accepted Answer

A)   point J
B)   point K
C)   point L
D)   point ME) None of the above
F) B) and C)

Question 15

Which of these terms are used interchangeably?

Accepted Answer

A)   "goods and services" and "inputs"
B)   "goods and services" and "factors of production"
C)   "inputs" and "factors of production"
D)   "land, labor, and capital" and "goods and services"E) C) and D)
F) All of the above

Question 16

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)   labor
B)   land
C)   capital
D)   moneyE) A) and B)
F) All of the above

Question 17

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 18

The two loops in the circular-flow diagram represent

Accepted Answer

A)   the flow of goods and the flow of services.
B)   the flow of dollars and the flow of financial assets.
C)   the flow of inputs into production processes and the flow of outputs from production processes.
D)   the flows of inputs and outputs and the flow of dollars.E) A) and B)
F) A) and C)

Question 19

In the circular-flow diagram, which of the following items does not flow from households to firms?

Accepted Answer

A)   revenue
B)   land, labor, and capital
C)   factors of production
D)   profitE) A) and C)
F) None of the above

Question 20

Table 2-5
 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of a bushel of corn does not depend on how many bushels of wheat are being produced.
B)   The opportunity cost of a bushel of corn increases as more corn is produced.
C)   The opportunity cost of a bushel of corn decreases as more corn is produced.
D)   The opportunity cost of a bushel of wheat decreases as more wheat is produced.E) B) and C)
F) None of the above

Exam 2: Thinking Like an Economist

Figure 2-8 -Refer to Figure 2-8. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Correct Answer
verified

The two loops in the circular-flow diagram represent

Correct Answer
verified

The most common data for testing economic theories come from

Correct Answer
verified

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Correct Answer
verified

Economic growth causes a production possibilities frontier to shift outward.

Correct Answer
verified

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Correct Answer
verified

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q?

Correct Answer
verified
80 bushels...
View Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct Answer
verified

Which of the following is an example of a normative, as opposed to positive, statement?

Correct Answer
verified

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct Answer
verified

Which of these terms are used interchangeably?

Correct Answer
verified

Economists believe that production possibilities frontiers rarely have a bowed shape.

Correct Answer
verified

The y-coordinate is the

Correct Answer
verified

When two variables have a negative correlation and the x-variable decreases,

Correct Answer
verified

In the circular-flow diagram, which of the following is not a factor of production?

Correct Answer
verified

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

Correct Answer
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Correct Answer
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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production is

Correct Answer
verified

In the circular-flow diagram, which of the following items does not flow from households to firms?

Correct Answer
verified

The Council of Economic Advisers

Correct Answer
verified

Exam 2: Thinking Like an Economist

Figure 2-8 -Refer to Figure 2-8. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Correct AnswerverifiedShow Answer

The two loops in the circular-flow diagram represent

Correct AnswerverifiedShow Answer

The most common data for testing economic theories come from

Correct AnswerverifiedShow Answer

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Correct AnswerverifiedShow Answer

Economic growth causes a production possibilities frontier to shift outward.

Correct AnswerverifiedShow Answer

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Correct AnswerverifiedShow Answer

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q?

Correct Answerverified80 bushels...View AnswerShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

Which of the following is an example of a normative, as opposed to positive, statement?

Correct AnswerverifiedShow Answer

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct AnswerverifiedShow Answer

Which of these terms are used interchangeably?

Correct AnswerverifiedShow Answer

Economists believe that production possibilities frontiers rarely have a bowed shape.

Correct AnswerverifiedShow Answer

The y-coordinate is the

Correct AnswerverifiedShow Answer

When two variables have a negative correlation and the x-variable decreases,

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following is not a factor of production?

Correct AnswerverifiedShow Answer

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production is

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items does not flow from households to firms?

Correct AnswerverifiedShow Answer

The Council of Economic Advisers

Correct AnswerverifiedShow Answer

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80 bushels...
View Answer

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