Question 1

When two variables move in opposite directions, the curve relating them is

Accepted Answer

A)   upward sloping, and we say the variables are positively related.
B)   upward sloping, and we say the variables are negatively related.
C)   downward sloping, and we say the variables are positively related.
D)   downward sloping, and we say the variables are negatively related.E) None of the above
F) B) and C)

Question 2

Some, but not all, government economists are employed within the administrative branch of government. Which of the following government agencies employs economists outside of the administrative branch?

Accepted Answer

A)   the Department of Labor
B)   the Department of the Treasury
C)   the Congressional Budget Office
D)   the Council of Economic AdvisersE) A) and B)
F) B) 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) A) and D)
F) A) and B)

Question 4

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 5

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 6

In the circular-flow diagram,

Accepted Answer

A)   firms are buyers in the markets for goods and services.
B)   households are sellers in the markets for the factors of production.
C)   firms are sellers in the markets for factors of production and in the markets for goods and services.
D)   dollars that are spent on goods and services flow directly from firms to households.E) None of the above
F) A) and C)

Question 7

Figure 2-20
Relationship Between Years of Education and Annual Income 
-Refer to Figure 2-20. Senator Smith observes the graph and concludes that people who earn higher incomes attend school for more years. Senator Jones observes the graph and concludes that people who attend school for more years earn higher incomes. Who is correct?

Accepted Answer

A)   Senator Smith is correct.
B)   Senator Jones is correct.
C)   It is difficult to say which senator might be correct due to the reverse causality problem.
D)   It is difficult to say which senator might be correct due to omitted variable bias.E) A) and D)
F) None of the above

Question 8

In the ordered pair (20, 30) , 20 is the

Accepted Answer

A)   the x-coordinate.
B)   the horizontal location of the point.
C)   the y-coordinate.
D)   Both a and b are correct.E) B) and D)
F) B) and C)

Question 9

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) None of the above
F) C) and D)

Question 10

Which of the following is correct?

Accepted Answer

A)   A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)   A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)   A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)   A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) A) and B)
F) B) and C)

Question 11

Economic models are built with

Accepted Answer

A)   recommendations concerning public policies.
B)   facts about the legal system.
C)   assumptions.
D)   statistical forecasts.E) All of the above
F) B) and C)

Question 12

Unemployment would cause an economy to

Accepted Answer

A)   produce inside its production possibilities frontier.
B)   produce on its production possibilities frontier.
C)   produce outside its production possibilities frontier.
D)   experience an inward shift of its production possibilities frontier.E) A) and B)
F) A) and C)

Question 13

Figure 2-2 
-Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Accepted Answer

A)   Box D must represent the markets for factors of production.
B)   Box C must represent the markets for goods and services.
C)   firms are buyers in the markets represented by Box D.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 14

Economists use some familiar terms in specialized ways

Accepted Answer

A)   to make the subject sound more complex than it is.
B)   because every respectable field of study has its own language.
C)   to provide a new and useful way of thinking about the world.
D)   because it was too difficult to come up with new terms.E) A) and B)
F) None of the above

Question 15

What type of statement is a descriptive statement about how the world is?

Accepted Answer

The answer of What type of statement is a descriptive...

Question 16

Figure 2-4 
-Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Accepted Answer

A)   Q
B)   Q, S
C)   Q, S, T
D)   SE) B) and C)
F) A) and C)

Question 17

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)   the nation is producing beyond its capacity, so inflation will occur.
B)   the nation is not using all available resources or is using inferior technology or both.
C)   the nation is producing an efficient combination of goods.
D)   there will be a large opportunity cost if the nation tries to increase production of any good.E) All of the above
F) B) and D)

Question 18

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

Figure 2-4 
-Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

A)   Q, S
B)   Q, S, T
C)   R, U
D)   TE) B) and D)
F) All of the above

Question 20

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

What type of statement is a descriptive statement about how the world is?

Correct Answer
verified

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Correct Answer
verified

Economic models are built with

Correct Answer
verified

Production possibilities frontiers are usually bowed outward. This is because

Correct Answer
verified

Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

In the ordered pair (20, 30) , 20 is the

Correct Answer
verified

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Correct Answer
verified

Points outside the production possibilities frontier represent infeasible levels of production.

Correct Answer
verified

Economists use some familiar terms in specialized ways

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

When two variables move in opposite directions, the curve relating them is

Correct Answer
verified

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Correct Answer
verified

Some, but not all, government economists are employed within the administrative branch of government. Which of the following government agencies employs economists outside of the administrative branch?

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct Answer
verified

The most common data for testing economic theories come from

Correct Answer
verified

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

Correct Answer
verified

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Correct Answer
verified

Unemployment would cause an economy to

Correct Answer
verified

Exam 2: Thinking Like an Economist

What type of statement is a descriptive statement about how the world is?

Correct AnswerverifiedShow Answer

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Correct AnswerverifiedShow Answer

Economic models are built with

Correct AnswerverifiedShow Answer

Production possibilities frontiers are usually bowed outward. This is because

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

In the ordered pair (20, 30) , 20 is the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

Points outside the production possibilities frontier represent infeasible levels of production.

Correct AnswerverifiedShow Answer

Economists use some familiar terms in specialized ways

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

When two variables move in opposite directions, the curve relating them is

Correct AnswerverifiedShow Answer

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Correct AnswerverifiedShow Answer

Some, but not all, government economists are employed within the administrative branch of government. Which of the following government agencies employs economists outside of the administrative branch?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct AnswerverifiedShow Answer

The most common data for testing economic theories come from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Correct AnswerverifiedShow Answer

Unemployment would cause an economy to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified