Question 1

Use the following Figure to answer the question : Figure 2-7 
-Refer to Figure 2-7. Inefficient production is represented by which points) ?

Accepted Answer

A)   L, M
B)   N, O, P, Q
C)   N, O, P
D)   QE) A) and B)
F) None of the above

Question 2

Factors of production are

Accepted Answer

A)   the mathematical calculations firms make in determining their optimal production levels.
B)   social and political conditions that affect production.
C)   the physical relationships between economic inputs and outputs.
D)   inputs into the production process.E) A) and B)
F) A) and C)

Question 3

Production possibilities frontiers are usually bowed outward. This is because

Accepted Answer

A)   the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
B)   the opportunity cost of producing a good decreases as more and more of that good is produced.
C)   of the effects of technological change.
D)   resources are specialized; that is, some are better at producing particular goods rather than other goods.E) B) and D)
F) None of the above

Question 4

Almost all economists agree that rent control

Accepted Answer

A)   has no effect on the rental income of landlords.
B)   allows the market for housing to work more efficiently.
C)   adversely affects the availability and quality of housing.
D)   is a very inexpensive way to help the most needy members of society.E) None of the above
F) C) and D)

Question 5

Economists at the Department of Justice

Accepted Answer

A)   track the behavior of the nation's money supply.
B)   advise Congress on economic matters.
C)   help enforce the nation's antitrust laws.
D)   prepare the federal budget.E) B) and C)
F) C) and D)

Question 6

In constructing models, economists

Accepted Answer

A)   leave out equations, since equations and models tend to contradict one another.
B)   ignore the long run, since models are useful only for short-run analysis.
C)   sometimes make assumptions that are contrary to features of the real world.
D)   try to include every feature of the economy.E) C) and D)
F) B) and D)

Question 7

The decision of which assumptions to make is

Accepted Answer

A)   an easy decision for an economist, but a difficult decision for a physicist or a chemist.
B)   not a particularly important decision for an economist.
C)   usually regarded as an art in scientific thinking.
D)   usually regarded as the easiest part of the scientific method.E) All of the above
F) None of the above

Question 8

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 9

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Accepted Answer

A)   the $50 represents a cost of production for Denny's firm.
B)   the $50 represents wages, rent, and profit to Denny's firm.
C)   Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton.
D)   Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.E) B) and C)
F) A) and D)

Question 10

Most economists agree that a large federal budget deficit has what type of effect on the economy?

Accepted Answer

The answer of Most economists agree that a large federal...

Question 11

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)   a controlled experiment that lead to the formulation of a scientific theory.
B)   being in the right place at the right time.
C)   an idea whose time had come.
D)   the interplay between observation and theory in science.E) B) and C)
F) A) and C)

Question 12

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)   can only show variables that are positively related.
B)   can only show variables that have a negative correlation.
C)   provide information on only one variable.
D)   provide information on no more than two variables.E) A) and B)
F) A) and C)

Question 13

The Federal Reserve

Accepted Answer

A)   designs tax policy.
B)   enforces the nation's antitrust laws.
C)   sets the nation's monetary policy.
D)   analyzes data on workers.E) A) and C)
F) None of the above

Question 14

The slope of a line is equal to

Accepted Answer

A)   the change in the value of x divided by the change in the value of y.
B)   the change in the value of y divided by the change in the value of x.
C)   the horizontal distance divided by the vertical distance.
D)   the value of y divided by the value of x.E) B) and C)
F) A) and C)

Question 15

When studying the effects of changes in public policy, economists believe that

Accepted Answer

A)   it is important to distinguish between the short run and the long run.
B)   the assumptions used in studying those effects should be the same for the short run as for the long run.
C)   the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)   the long-run effects of those changes are always more beneficial to society than are the short-run effects.E) C) and D)
F) All of the above

Question 16

Use the following Figure to answer the question : Figure 2-8 :

-Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

Accepted Answer

A)   remains constant.
B)   increases.
C)   decreases.
D)   This answer cannot be determined from the graph.E) None of the above
F) A) and D)

Question 17

Use the following Figure to answer the question : Figure 2-13 
-Refer to Figure 2-13. Which of the following combinations of points are both efficient and attainable for this economy?

Accepted Answer

A)   G, H
B)   F, I, L
C)   F, G, H, I, L
D)   J, KE) None of the above
F) B) and D)

Question 18

Use the following Figure to answer the question :  Figure 2-9
Panel a) 
 
Panel b)  
-Refer to Figure 2-9, Panel a) . To gain 2 donuts by moving from point L to point M, society must sacrifice

Accepted Answer

A)   efficiency.
B)   employment.
C)   4 cups of coffee.
D)   More than one of the above is correct.E) None of the above
F) B) and C)

Question 19

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

Accepted Answer

A)   This month, the economy reduced the unemployment of its resources.
B)   This month, the economy experienced an improvement in technology.
C)   This month, the economy experienced an increase in resources
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 20

The y-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) B) and D)
F) B) and C)

Exam 2: Thinking Like an Economist

Factors of production are

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Production possibilities frontiers are usually bowed outward. This is because

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Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . To gain 2 donuts by moving from point L to point M, society must sacrifice

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Use the following Figure to answer the question : Figure 2-7 -Refer to Figure 2-7. Inefficient production is represented by which points) ?

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In constructing models, economists

Correct AnswerverifiedShow Answer

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

Correct AnswerverifiedShow Answer

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

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The slope of a line is equal to

Correct AnswerverifiedShow Answer

Graphs such as bar graphs and pie charts are limited in that they

Correct AnswerverifiedShow Answer

Almost all economists agree that rent control

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Use the following Figure to answer the question : Figure 2-13 -Refer to Figure 2-13. Which of the following combinations of points are both efficient and attainable for this economy?

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The Federal Reserve

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The y-coordinate of an ordered pair specifies the

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Most economists agree that a large federal budget deficit has what type of effect on the economy?

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When studying the effects of changes in public policy, economists believe that

Correct AnswerverifiedShow Answer

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Correct AnswerverifiedShow Answer

Just like other scientific models, economic models simplify reality using

Correct AnswerverifiedShow Answer

Economists at the Department of Justice

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Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

Correct AnswerverifiedShow Answer

The decision of which assumptions to make is

Correct AnswerverifiedShow Answer

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