Question 1

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Accepted Answer

A) True 
 B)False

Question 2

What is a coordinate system used for?

Accepted Answer

A)  to show the flow of income and products in an economic system 
B)  to organize labour and other resources in the production process 
C)  to allow economists to show two variables on a single graph 
D)  to teach economists how to draw graphs consistently 
A)  to show the flow of income and products in an economic system 
B)  to organize labour and other resources in the production process 
C)  to allow economists to show two variables on a single graph 
D)  to teach economists how to draw graphs consistently

Question 3

Figure 2-8  
-Refer to Figure 2-8. What would happen if this economy moved from point F to point C?

Accepted Answer

A)  It still would not be producing efficiently. 
B)  There would be no gain in either bathtubs or barrels. 
C)  It would be producing more barrels and more bathtubs than at point C. 
D)  It is not possible for this economy to move from point F to point C without additional resources. 
A)  It still would not be producing efficiently. 
B)  There would be no gain in either bathtubs or barrels. 
C)  It would be producing more barrels and more bathtubs than at point C. 
D)  It is not possible for this economy to move from point F to point C without additional resources.

Question 4

What happens when two variables have a negative correlation?

Accepted Answer

A)  They tend to move in opposite directions. 
B)  They tend to move in the same direction. 
C)  One variable will move while the other remains constant. 
D)  The movement of the two variables is unpredictable. 
A)  They tend to move in opposite directions. 
B)  They tend to move in the same direction. 
C)  One variable will move while the other remains constant. 
D)  The movement of the two variables is unpredictable.

Question 5

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Accepted Answer

A) True 
 B)False

Question 6

Where do the most common data for testing economic theories come from?

Accepted Answer

A)  carefully controlled and conducted laboratory experiments 
B)  governments and large corporations 
C)  historical episodes of economic change 
D)  centrally planned economies 
A)  carefully controlled and conducted laboratory experiments 
B)  governments and large corporations 
C)  historical episodes of economic change 
D)  centrally planned economies

Question 7

What is a characteristic of factors of production?

Accepted Answer

A)  They are used to produce goods and services. 
B)  They are owned by firms. 
C)  They are abundant in most economies. 
D)  They are provided by both firms and households. 
A)  They are used to produce goods and services. 
B)  They are owned by firms. 
C)  They are abundant in most economies. 
D)  They are provided by both firms and households.

Question 8

What famous economist said, "The ideas of economists and political philosophers … are more powerful than is commonly understood"?

Accepted Answer

A)  Gregory Mankiw 
B)  John Maynard Keynes 
C)  Adam Smith 
D)  Milton Friedman 
A)  Gregory Mankiw 
B)  John Maynard Keynes 
C)  Adam Smith 
D)  Milton Friedman

Question 9

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-8  
-Refer to Figure 2-8. If this economy puts all of its resources into the production of bathtubs, how many could it produce?

Accepted Answer

A)  0 barrels and 16 bathtubs 
B)  12 barrels and 35 bathtubs 
C)  20 barrels and 12 bathtubs 
D)  35 barrels and 0 bathtubs 
A)  0 barrels and 16 bathtubs 
B)  12 barrels and 35 bathtubs 
C)  20 barrels and 12 bathtubs 
D)  35 barrels and 0 bathtubs

Question 11

Figure 2-3  
-Refer to Figure 2-3. Which point represents the maximum possible production of tubas?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point E

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

What is a coordinate system used for?

Figure 2-8 -Refer to Figure 2-8. What would happen if this economy moved from point F to point C?

What happens when two variables have a negative correlation?

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Where do the most common data for testing economic theories come from?

What is a characteristic of factors of production?

What famous economist said, "The ideas of economists and political philosophers … are more powerful than is commonly understood"?

Economic growth causes a production possibilities frontier to shift outward.

Figure 2-8 -Refer to Figure 2-8. If this economy puts all of its resources into the production of bathtubs, how many could it produce?

Figure 2-3 -Refer to Figure 2-3. Which point represents the maximum possible production of tubas?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 2: Thinking Like an Economist

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

What is a coordinate system used for?

Figure 2-8 -Refer to Figure 2-8. What would happen if this economy moved from point F to point C?

What happens when two variables have a negative correlation?

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Where do the most common data for testing economic theories come from?

What is a characteristic of factors of production?

What famous economist said, "The ideas of economists and political philosophers … are more powerful than is commonly understood"?

Economic growth causes a production possibilities frontier to shift outward.

Figure 2-8 -Refer to Figure 2-8. If this economy puts all of its resources into the production of bathtubs, how many could it produce?

Figure 2-3 -Refer to Figure 2-3. Which point represents the maximum possible production of tubas?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters