Question 1

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-6 
-Refer to Figure 2-6. If this economy devotes all of its resources to the production of clocks, then it will produce

Accepted Answer

A)  0 clocks and 35 candles.
B)  10 clocks and 25 candles.
C)  16 clocks and 0 candles.
D)  16 clocks and 35 candles.E) None of the above
F) A) and B)

Question 3

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 4

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)  negative economic statement.
B)  positive economic statement.
C)  normative economic statement.
D)  statement that contradicts one of the basic principles of economics.E) None of the above
F) A) and D)

Question 5

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 6

Economists hold many positions advising the president and Congress including

Accepted Answer

A)  being a member of the Council of Economic Advisers.
B)  helping to enforce antitrust laws at the Department of Justice.
C)  conducting research at the Congressional Budget Office.
D)  All of these are possible positions that economists hold.E) A) and B)
F) A) and C)

Question 7

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-2 
-Refer to Figure 2-2. Carla regularly buys fruits and vegetables at a grocery store. Roberto regularly pays a lawn-care company to mow his lawn. If the flow of fruits and vegetables from the grocery store to Carla is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Roberto to the lawn-care company is represented by an arrow

Accepted Answer

A)  from Box A to Box D.
B)  from Box B to Box C.
C)  from Box C to Box B.
D)  from Box D to Box A.E) B) and D)
F) A) and C)

Question 9

Economists make assumptions to

Accepted Answer

A)  provide issues for political discussion.
B)  make a complex world easier to understand.
C)  make it easier to teach economic concepts and analysis.
D)  create policy alternatives that are incomplete or subject to criticism.E) A) and B)
F) B) and D)

Question 10

Figure 2-12 
-Refer to Figure 2-12. Which of the following statements is true about point B for this economy?

Accepted Answer

A)  Point B is currently unattainable.
B)  Point B is efficient.
C)  At point B, more pillows are produced than blankets.
D)  There is unemployment at point B.E) A) and B)
F) B) and C)

Question 11

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Accepted Answer

A)  rotation of the curve.
B)  shift of the curve.
C)  movement along the curve.
D)  change in the slope of the curve.E) B) and C)
F) All of the above

Question 12

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

Question 13

The essence of science is

Accepted Answer

A)  the laboratory experiment.
B)  the scientific method.
C)  the study of nature, but not the study of society.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 14

Figure 2-8
 
-Refer to Figure 2-8, Panel (a) . Production at point K is

Accepted Answer

A)  possible and efficient.
B)  possible but inefficient.
C)  impossible but efficient.
D)  impossible and inefficient.E) B) and D)
F) A) and B)

Question 15

Economists speaking like policy advisers make

Accepted Answer

A)  positive statements.
B)  descriptive statements.
C)  claims about how the world is.
D)  claims about how the world should be.E) A) and D)
F) None of the above

Question 16

Another term for factors of production is

Accepted Answer

A)  inputs.
B)  output.
C)  goods.
D)  services.E) B) and C)
F) A) and B)

Question 17

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Accepted Answer

A)  Most people who study economics are not very bright.
B)  Good economists must possess a rare combination of gifts.
C)  Economics is quite boring; hence, people tend to lose interest in it before mastering it.
D)  Good thinkers become frustrated with economics because it does not make use of the scientific method.E) A) and C)
F) B) and C)

Question 18

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) A) and D)

Question 19

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Accepted Answer

A)  the design and implementation of laboratory experiments.
B)  knowing when to stop collecting data and when to start analyzing the data.
C)  deciding which assumptions to make.
D)  being able to mathematically model natural phenomena.E) C) and D)
F) A) and B)

Question 20

Table 2-2
The following table contains some production possibilities for an economy for a given year:
   Cakes  Rolls (in dozens)  10050001204600140?\begin{array} { | c | c | } \hline 	ext { Cakes } & 	ext { Rolls (in dozens)  } \\hline 100 & 5000 \\hline 120 & 4600 \\hline 140 & ? \\hline\end{array} Cakes 100120140​ Rolls (in dozens)  50004600?​​ 
-Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)   4400.
B)   4300
C)   4200.
D)   4100. E) None of the above
F) A) and D)

Exam 2: Thinking Like an Economist

"Prices rise when the quantity of money rises rapidly" is an example of a

Correct Answer
verified

Economists hold many positions advising the president and Congress including

Correct Answer
verified

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Correct Answer
verified

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Correct Answer
verified

Figure 2-12 -Refer to Figure 2-12. Which of the following statements is true about point B for this economy?

Correct Answer
verified

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Correct Answer
verified

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Correct Answer
verified

Figure 2-6 -Refer to Figure 2-6. If this economy devotes all of its resources to the production of clocks, then it will produce

Correct Answer
verified

Correct Answer
verified

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Correct Answer
verified

Another term for factors of production is

Correct Answer
verified

Economists speaking like policy advisers make

Correct Answer
verified

Correct Answer
verified

For economists, historical episodes

Correct Answer
verified

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Correct Answer
verified

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Correct Answer
verified

Economists make assumptions to

Correct Answer
verified

Figure 2-8 -Refer to Figure 2-8, Panel (a) . Production at point K is

Correct Answer
verified

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

Correct Answer
verified

The essence of science is

Correct Answer
verified

Exam 2: Thinking Like an Economist

"Prices rise when the quantity of money rises rapidly" is an example of a

Correct AnswerverifiedShow Answer

Economists hold many positions advising the president and Congress including

Correct AnswerverifiedShow Answer

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Correct AnswerverifiedShow Answer

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Correct AnswerverifiedShow Answer

Figure 2-12 -Refer to Figure 2-12. Which of the following statements is true about point B for this economy?

Correct AnswerverifiedShow Answer

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Correct AnswerverifiedShow Answer

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. If this economy devotes all of its resources to the production of clocks, then it will produce

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Correct AnswerverifiedShow Answer

Another term for factors of production is

Correct AnswerverifiedShow Answer

Economists speaking like policy advisers make

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For economists, historical episodes

Correct AnswerverifiedShow Answer

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Correct AnswerverifiedShow Answer

Economists make assumptions to

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8, Panel (a) . Production at point K is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The essence of science is

Correct AnswerverifiedShow Answer

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