Question 1

The scaling of the axes of a time-series graph:

Accepted Answer

A)  is not a critical element in presenting the intended information. 
B)  may change the visual interpretation of the data. 
C)  generally places the time period on the vertical axis. 
D)  generally puts values of a variable, such as the unemployment rate, on the vertical axis. 
A)  is not a critical element in presenting the intended information. 
B)  may change the visual interpretation of the data. 
C)  generally places the time period on the vertical axis. 
D)  generally puts values of a variable, such as the unemployment rate, on the vertical axis.

Question 2

"Unemployment of 5% is too high" is:

Accepted Answer

A)  a normative statement. 
B)  a positive statement. 
C)  the circular-flow model. 
D)  an example of comparative advantage. 
A)  a normative statement. 
B)  a positive statement. 
C)  the circular-flow model. 
D)  an example of comparative advantage.

Question 3

Use the following to answer questions:
\  
-(Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing at point A and wants to produce at point B, it must:

Accepted Answer

A)  trade with another country. 
B)  increase its resources. 
C)  decrease production. 
D)  use its existing resources efficiently. 
A)  trade with another country. 
B)  increase its resources. 
C)  decrease production. 
D)  use its existing resources efficiently.

Question 4

In constructing a model, economists:

Accepted Answer

A)  might use a computer simulation. 
B)  avoid making any assumptions. 
C)  assume that all relevant factors are constantly changing. 
D)  are prohibited from using mathematics. 
A)  might use a computer simulation. 
B)  avoid making any assumptions. 
C)  assume that all relevant factors are constantly changing. 
D)  are prohibited from using mathematics.

Question 5

The financial meltdown in 2008-2009 was partially the result of a faulty economic model that misestimated the value of mortgage-backed securities.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Use the following to answer question 102:
\  
-(Figure: Bicycles and Radishes II) Use Figure: Bicycles and Radishes II. The country depicted in this figure is operating at point M. It could achieve production at point I only if it:

Accepted Answer

A)  used its resources more efficiently. 
B)  devoted more resources to radish production. 
C)  devoted more resources to bicycle production. 
D)  increased the quantities of capital, natural resources, or labor available or improved its technology. 
A)  used its resources more efficiently. 
B)  devoted more resources to radish production. 
C)  devoted more resources to bicycle production. 
D)  increased the quantities of capital, natural resources, or labor available or improved its technology.

Question 8

In the factor market, firms buy resources.

Accepted Answer

A) True 
 B)False

Question 9

Which statement is a positive economic statement?

Accepted Answer

A)  Government has grown too large and should be reduced. 
B)  There has been an increase in the rate of inflation. 
C)  Government should be subject to the same rules as all other institutions. 
D)  Women should be paid as much as men are for the same work. 
A)  Government has grown too large and should be reduced. 
B)  There has been an increase in the rate of inflation. 
C)  Government should be subject to the same rules as all other institutions. 
D)  Women should be paid as much as men are for the same work.

Question 10

The effect of an increase in productive inputs such as labor and capital can be shown by a(n):

Accepted Answer

A)  point inside of the production possibility frontier. 
B)  outward shift of the production possibility frontier. 
C)  movement from one point to another along the production possibility frontier. 
D)  inward shift of the production possibility frontier. 
A)  point inside of the production possibility frontier. 
B)  outward shift of the production possibility frontier. 
C)  movement from one point to another along the production possibility frontier. 
D)  inward shift of the production possibility frontier.

Question 11

Use the following to answer questions:  
-(Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. Unemployment was _____ between 1/2001 and 1/2002 and _____ between 1/1999 and 1/2000.

Accepted Answer

A)  increasing; decreasing 
B)  increasing; increasing 
C)  decreasing; increasing 
D)  decreasing; decreasing 
A)  increasing; decreasing 
B)  increasing; increasing 
C)  decreasing; increasing 
D)  decreasing; decreasing

Question 12

A high-school graduate who gets a college degree is adding to the economy's stock of:

Accepted Answer

A)  labor. 
B)  capital. 
C)  human capital. 
D)  financial capital. 
A)  labor. 
B)  capital. 
C)  human capital. 
D)  financial capital.

Question 13

Bangladesh produces much of the clothing we wear because it can produce more clothes than can the United States.

Accepted Answer

A) True 
 B)False

Question 14

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 15

In the circular-flow diagram, the factor market is where:

Accepted Answer

A)  households buy factors of production. 
B)  households buy goods and services. 
C)  businesses buy goods and services. 
D)  businesses buy factors of production. 
A)  households buy factors of production. 
B)  households buy goods and services. 
C)  businesses buy goods and services. 
D)  businesses buy factors of production.

Question 16

Use the following to answer questions:
\  
-(Table: Bongos and Frisbees) Use Table: Bongos and Frisbees. Bill and Mickey make bongos and Frisbees. Who should specialize in the production of bongos?

Accepted Answer

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

Question 17

Use the following to answer questions:  
-(Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relation between price on the vertical axis and quantity supplied on the horizontal axis is:

Accepted Answer

A)  equal to 1/2. 
B)  equal to 1. 
C)  equal to 2. 
D)  different at different points on the line. 
A)  equal to 1/2. 
B)  equal to 1. 
C)  equal to 2. 
D)  different at different points on the line.

Question 18

In the circular-flow diagram, a firm is an:

Accepted Answer

A)  organization that produces goods or services for sale. 
B)  individual or a group of people who share their income. 
C)  organization that sells factors of production. 
D)  organization that purchases goods and services. 
A)  organization that produces goods or services for sale. 
B)  individual or a group of people who share their income. 
C)  organization that sells factors of production. 
D)  organization that purchases goods and services.

Question 19

An inward shift in the U.S. economy's production possibility frontier could represent:

Accepted Answer

A)  U.S. workers moving to Canada. 
B)  workers moving from New Jersey to Massachusetts. 
C)  U.S. economic growth. 
D)  a movement from labor-intensive to capital-intensive industries in some states. 
A)  U.S. workers moving to Canada. 
B)  workers moving from New Jersey to Massachusetts. 
C)  U.S. economic growth. 
D)  a movement from labor-intensive to capital-intensive industries in some states.

Question 20

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is:

Accepted Answer

A)  bowed out. 
B)  bowed in. 
C)  a straight line. 
D)  a vertical line. 
A)  bowed out. 
B)  bowed in. 
C)  a straight line. 
D)  a vertical line.

The scaling of the axes of a time-series graph:

"Unemployment of 5% is too high" is:

In constructing a model, economists:

The financial meltdown in 2008-2009 was partially the result of a faulty economic model that misestimated the value of mortgage-backed securities.

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

In the factor market, firms buy resources.

Which statement is a positive economic statement?

The effect of an increase in productive inputs such as labor and capital can be shown by a(n):

A high-school graduate who gets a college degree is adding to the economy's stock of:

Bangladesh produces much of the clothing we wear because it can produce more clothes than can the United States.

The circular-flow diagram shows how:

In the circular-flow diagram, the factor market is where:

Use the following to answer questions: -(Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relation between price on the vertical axis and quantity supplied on the horizontal axis is:

In the circular-flow diagram, a firm is an:

An inward shift in the U.S. economy's production possibility frontier could represent:

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is:

First Principles

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 2: Economic Models: Trade-Offs and Trade

The scaling of the axes of a time-series graph:

"Unemployment of 5% is too high" is:

Use the following to answer questions: \\ -(Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing at point A and wants to produce at point B, it must:

In constructing a model, economists:

The financial meltdown in 2008-2009 was partially the result of a faulty economic model that misestimated the value of mortgage-backed securities.

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

Use the following to answer question 102: \\ -(Figure: Bicycles and Radishes II) Use Figure: Bicycles and Radishes II. The country depicted in this figure is operating at point M. It could achieve production at point I only if it:

In the factor market, firms buy resources.

Which statement is a positive economic statement?

The effect of an increase in productive inputs such as labor and capital can be shown by a(n):

A high-school graduate who gets a college degree is adding to the economy's stock of:

Bangladesh produces much of the clothing we wear because it can produce more clothes than can the United States.

The circular-flow diagram shows how:

In the circular-flow diagram, the factor market is where:

Use the following to answer questions: \\ -(Table: Bongos and Frisbees) Use Table: Bongos and Frisbees. Bill and Mickey make bongos and Frisbees. Who should specialize in the production of bongos?

Use the following to answer questions: -(Table: Price, Quantity Demanded, and Quantity Supplied) Use Table: Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relation between price on the vertical axis and quantity supplied on the horizontal axis is:

In the circular-flow diagram, a firm is an:

An inward shift in the U.S. economy's production possibility frontier could represent:

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is:

First Principles

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

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