Question 1

The circular-flow diagram is a

Accepted Answer

A)  visual model of the economy.
B)  visual model of the relationships among money, prices, and businesses.
C)  model that shows the effects of government on the economy.
D)  mathematical model of how the economy works.E) None of the above
F) C) and D)

Question 2

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)  opinions and education.
B)  opinions and values.
C)  scientific judgments and education.
D)  scientific judgments and values.E) A) and B)
F) A) and C)

Question 3

Table 2-6 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

Accepted Answer

The answer of Table 2-6 
-Refer to Table 2-6. Consider...

Question 4

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Accepted Answer

A) True 
 B)False

Question 5

In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Accepted Answer

A) True 
 B)False

Question 6

The first number in any ordered pair is

Accepted Answer

A)  the x-coordinate.
B)  the y-coordinate.
C)  the vertical location of the point.
D)  the slope.E) None of the above
F) A) and C)

Question 7

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

Accepted Answer

A)  The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)  The US income tax rate increases with the amount of income earned.
C)  The government should increase the tax on gasoline.
D)  The US unemployment rate increased to 10 percent in 2009.E) All of the above
F) B) and D)

Question 8

Examples of graphs of a single variable include pie charts, bar graphs, and time-series graphs.

Accepted Answer

A) True 
 B)False

Question 9

If an economy is producing efficiently, then

Accepted Answer

A)  there is no way to produce more of one good without producing less of another good.
B)  it is possible to produce more of both goods without increasing the quantities of inputs that are being used.
C)  it is possible to produce more of one good without producing less of another good.
D)  it is not possible to produce more of any good at any cost.E) A) and B)
F) A) and D)

Question 10

Table 2-5 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Accepted Answer

A)  200 bushels of wheat
B)  400 bushels of wheat
C)  600 bushels of wheat
D)  800 bushels of wheatE) B) and D)
F) All of the above

Question 11

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-7 
-Refer to Figure 2-7. This economy cannot produce at which point(s) ?

Accepted Answer

A)  L, M
B)  N, O, P, Q
C)  N, O, P
D)  QE) B) and D)
F) A) and C)

Question 13

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)  Federal Reserve.
B)  Department of Justice.
C)  Department of the Treasury.
D)  Congressional Budget Office.E) B) and D)
F) A) and D)

Question 14

Table 2-2
The following table contains some production possibilities for an economy for a given year: 
-Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  6000.
B)  5500.
C)  5000.
D)  4500.E) All of the above
F) C) and D)

Question 15

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)  business cycle.
B)  broken window fallacy.
C)  tradeoff between inflation and unemployment.
D)  ten principles of economics.E) C) and D)
F) B) and D)

Question 16

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) B) and C)
F) A) and D)

Question 17

In conducting their research, economists often substitute historical events and historical episodes for

Accepted Answer

A)  theories and observations.
B)  laboratory experiments.
C)  models.
D)  assumptions.E) A) and C)
F) A) and B)

Question 18

Because it is difficult for economists to use experiments to generate data, they generally must

Accepted Answer

A)  do without data.
B)  substitute assumptions for data when data are unavailable.
C)  rely upon hypothetical data that were previously concocted by other economists.
D)  use whatever data the world gives them.E) B) and D)
F) B) and C)

Question 19

In the circular-flow diagram, in the markets for

Accepted Answer

A)  goods and services, households and firms are both sellers.
B)  goods and services, households are sellers and firms are buyers.
C)  the factors of production, households are sellers and firms are buyers.
D)  the factors of production, households and firms are both buyers.E) A) and B)
F) A) and C)

Question 20

For economists, historical episodes

Accepted Answer

A)  are not worthy of study because they offer few insights into current economic events and problems.
B)  are not worthy of study because laboratory experiments provide more reliable data.
C)  are worthy of study because economists rely entirely on observation, rather than on theory.
D)  are worthy of study because they serve as valuable substitutes for laboratory experiments.E) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

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

Correct AnswerverifiedShow Answer

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

Correct AnswerverifiedShow Answer

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Correct AnswerverifiedShow Answer

Examples of graphs of a single variable include pie charts, bar graphs, and time-series graphs.

Correct AnswerverifiedShow Answer

Because it is difficult for economists to use experiments to generate data, they generally must

Correct AnswerverifiedShow Answer

In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Correct AnswerverifiedShow Answer

The first number in any ordered pair is

Correct AnswerverifiedShow Answer

The president of the United States receives tax policy advice from economists in the

Correct AnswerverifiedShow Answer

In conducting their research, economists often substitute historical events and historical episodes for

Correct AnswerverifiedShow Answer

Table 2-2 The following table contains some production possibilities for an economy for a given year: -Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

For economists, historical episodes

Correct AnswerverifiedShow Answer

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Correct AnswerverifiedShow Answer

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct AnswerverifiedShow Answer

If an economy is producing efficiently, then

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

In the circular-flow diagram, in the markets for

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Correct AnswerverifiedShow Answer

Irregular fluctuations in economic activity are known as the

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