Question 1

In the circular-flow diagram,firms receive money for _____ in the _____ market.

Accepted Answer

A) selling goods and services;product 
B) selling resources;product 
C) selling resources;factor 
D) selling goods and services;factor 
A) selling goods and services;product 
B) selling resources;product 
C) selling resources;factor 
D) selling goods and services;factor

Question 2

The circular-flow diagram shows how:

Accepted Answer

A) banks receive deposits and create money. 
B) money,goods and services,and factors of production flow through the economy. 
C) the various levels of government allocate tax revenues to meet the needs of society. 
D) the work force is educated and trained to increase labor productivity. 
A) banks receive deposits and create money. 
B) money,goods and services,and factors of production flow through the economy. 
C) the various levels of government allocate tax revenues to meet the needs of society. 
D) the work force is educated and trained to increase labor productivity.

Question 3

Use the following to answer question:
 
-(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If the economy is producing at alternative X,the opportunity cost of producing at Y instead of X is _____ units of consumer goods per period.

Accepted Answer

A) 0 
B) 6 
C) 8 
D) 14 
A) 0 
B) 6 
C) 8 
D) 14

Question 4

Technological improvements will:

Accepted Answer

A) leave the production possibility frontier unchanged. 
B) shift the production possibility frontier inward. 
C) shift the production possibility frontier outward. 
D) necessarily lead to increased unemployment. 
A) leave the production possibility frontier unchanged. 
B) shift the production possibility frontier inward. 
C) shift the production possibility frontier outward. 
D) necessarily lead to increased unemployment.

Question 5

"All other relevant factors remain unchanged" is another way of saying:

Accepted Answer

A) all other things equal. 
B) allow several variables to change to understand how those variables affect one variable held constant. 
C) allow all variables to change and attempt to understand how the variables interact with each other. 
D) no variables change. 
A) all other things equal. 
B) allow several variables to change to understand how those variables affect one variable held constant. 
C) allow all variables to change and attempt to understand how the variables interact with each other. 
D) no variables change.

Question 6

Which statement is normative?

Accepted Answer

A) The rate of unemployment is 9%. 
B) A high rate of economic growth creates jobs. 
C) The federal government spends half of its budget on national defense. 
D) Everyone in the United States deserves to be covered by national health insurance. 
A) The rate of unemployment is 9%. 
B) A high rate of economic growth creates jobs. 
C) The federal government spends half of its budget on national defense. 
D) Everyone in the United States deserves to be covered by national health insurance.

Question 7

Alexander has a straight-line,or linear,production possibility frontier when he produces soybeans and corn.If he uses all of his resources to grow soybeans,he can produce 200 bushels of soybeans;if he uses all of his resources for corn production,he can produce 400 bushels of corn.Alexander CANNOT produce _____ bushels of soybeans and _____ bushels of corn.

Accepted Answer

A) 200;0 
B) 200;600 
C) 0;400 
D) 100;200 
A) 200;0 
B) 200;600 
C) 0;400 
D) 100;200

Question 8

Dr.Colgate is a dentist who employs an assistant,Ms.Crest.If Dr.Colgate worked all day at the front desk,she could answer 40 phone calls.If she worked all day with patients,she could clean the teeth of 40 patients.If Ms.Crest worked all day at the front desk,she could answer 60 phone calls.If she worked all day with patients,she could clean the teeth of 20 patients._____ has a(n)_____ advantage in _____.

Accepted Answer

A) Dr.Colgate;absolute;answering phones 
B) Ms.Crest;comparative;answering phones 
C) Ms.Crest;absolute;cleaning patients' teeth 
D) Dr.Colgate;comparative;answering phones 
A) Dr.Colgate;absolute;answering phones 
B) Ms.Crest;comparative;answering phones 
C) Ms.Crest;absolute;cleaning patients' teeth 
D) Dr.Colgate;comparative;answering phones

Question 9

If LeRoyce trades two cookies for one of Amir's brownies,we say that they are engaging in:

Accepted Answer

A) exploitation. 
B) benevolence. 
C) barter. 
D) a zero-sum game. 
A) exploitation. 
B) benevolence. 
C) barter. 
D) a zero-sum game.

Question 10

The assumption ceteris paribus in a model means "other things equal."

Accepted Answer

A) True 
 B)False

Question 11

"The rate of unemployment is 9%." This statement:

Accepted Answer

A) is positive. 
B) is normative. 
C) involves a value judgment. 
D) is a personal reflection and has no value in economics. 
A) is positive. 
B) is normative. 
C) involves a value judgment. 
D) is a personal reflection and has no value in economics.

Question 12

"The current unemployment rate of 9% is too high" is a _____ statement.

Accepted Answer

A) normative 
B) ceteris paribus 
C) positive 
D) marginal 
A) normative 
B) ceteris paribus 
C) positive 
D) marginal

Question 13

Statements that make value judgments are:

Accepted Answer

A) pecuniary. 
B) positive. 
C) nominal. 
D) normative. 
A) pecuniary. 
B) positive. 
C) nominal. 
D) normative.

Question 14

Use the following to answer question:
 
-(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates a(n):

Accepted Answer

A) growing ability of the economy to produce capital and consumer goods. 
B) increase in the stock market. 
C) decrease in the factors of production. 
D) shift of the production possibility frontier toward producing fewer goods. 
A) growing ability of the economy to produce capital and consumer goods. 
B) increase in the stock market. 
C) decrease in the factors of production. 
D) shift of the production possibility frontier toward producing fewer goods.

Question 15

If the United States is more productive than Mexico in all lines of production,then the United States cannot benefit from trade with Mexico.

Accepted Answer

A) True 
 B)False

Question 16

Use the following to answer question:
 
-(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of cell phones for Finland is _____ box(es)of herring.

Accepted Answer

A) 10 
B) 0.5 
C) 5 
D) 0.1 
A) 10 
B) 0.5 
C) 5 
D) 0.1

Question 17

"The unemployment rate should be higher" is a normative statement.

Accepted Answer

A) True 
 B)False

Question 18

Use the following to answer question:
 
-(Table: Bongos and Frisbees)Use Table: Bongos and Frisbees.Bill and Mickey make bongos and Frisbees.Who has the comparative advantage in producing Frisbees?

Accepted Answer

A) Bill 
B) Mickey 
C) both 
D) neither 
A) Bill 
B) Mickey 
C) both 
D) neither

Question 19

Use the following to answer question:  
-(Figure: Omar's Production Possibilities)Use Figure: Omar's Production Possibilities.The opportunity cost for Tom to move from point A on the curve to point B is:

Accepted Answer

A) 10 coconuts. 
B) 10 fish. 
C) 5 coconuts. 
D) 5 fish. 
A) 10 coconuts. 
B) 10 fish. 
C) 5 coconuts. 
D) 5 fish.

Question 20

After 2000,the market for mortgage-backed securities grew rapidly because Wall Street financial theorists claimed they had a model that could accurately assess what their price should be.

Accepted Answer

A) True 
 B)False

In the circular-flow diagram,firms receive money for _ in the _ market.

The circular-flow diagram shows how:

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If the economy is producing at alternative X,the opportunity cost of producing at Y instead of X is _____ units of consumer goods per period.

Technological improvements will:

"All other relevant factors remain unchanged" is another way of saying:

Which statement is normative?

If LeRoyce trades two cookies for one of Amir's brownies,we say that they are engaging in:

The assumption ceteris paribus in a model means "other things equal."

"The rate of unemployment is 9%." This statement:

"The current unemployment rate of 9% is too high" is a _____ statement.

Statements that make value judgments are:

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates a(n):

If the United States is more productive than Mexico in all lines of production,then the United States cannot benefit from trade with Mexico.

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of cell phones for Finland is _____ box(es)of herring.

"The unemployment rate should be higher" is a normative statement.

Use the following to answer question: -(Table: Bongos and Frisbees)Use Table: Bongos and Frisbees.Bill and Mickey make bongos and Frisbees.Who has the comparative advantage in producing Frisbees?

Use the following to answer question: -(Figure: Omar's Production Possibilities)Use Figure: Omar's Production Possibilities.The opportunity cost for Tom to move from point A on the curve to point B is:

After 2000,the market for mortgage-backed securities grew rapidly because Wall Street financial theorists claimed they had a model that could accurately assess what their price should be.

First Principles

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 2: Economic Models: Trade-Offs and Trade

In the circular-flow diagram,firms receive money for _____ in the _____ market.

The circular-flow diagram shows how:

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If the economy is producing at alternative X,the opportunity cost of producing at Y instead of X is _____ units of consumer goods per period.

Technological improvements will:

"All other relevant factors remain unchanged" is another way of saying:

Which statement is normative?

If LeRoyce trades two cookies for one of Amir's brownies,we say that they are engaging in:

The assumption ceteris paribus in a model means "other things equal."

"The rate of unemployment is 9%." This statement:

"The current unemployment rate of 9% is too high" is a _____ statement.

Statements that make value judgments are:

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates a(n):

If the United States is more productive than Mexico in all lines of production,then the United States cannot benefit from trade with Mexico.

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of cell phones for Finland is _____ box(es)of herring.

"The unemployment rate should be higher" is a normative statement.

Use the following to answer question: -(Table: Bongos and Frisbees)Use Table: Bongos and Frisbees.Bill and Mickey make bongos and Frisbees.Who has the comparative advantage in producing Frisbees?

Use the following to answer question: -(Figure: Omar's Production Possibilities)Use Figure: Omar's Production Possibilities.The opportunity cost for Tom to move from point A on the curve to point B is:

After 2000,the market for mortgage-backed securities grew rapidly because Wall Street financial theorists claimed they had a model that could accurately assess what their price should be.

First Principles

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

In the circular-flow diagram,firms receive money for _ in the _ market.