Question 1

Figure 2-17​  
-Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.

Accepted Answer

A) True 
 B)False

Question 2

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories. 
A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories.

Question 3

In the circular-flow diagram,

Accepted Answer

A) firms own the factors of production. 
B) the factors of production are labor, land, and capital. 
C) the factors of production are also called "output." 
D) All of the above are correct. 
A) firms own the factors of production. 
B) the factors of production are labor, land, and capital. 
C) the factors of production are also called "output." 
D) All of the above are correct.

Question 4

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. 
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.

Question 5

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 6

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Accepted Answer

A) Tariffs and import quotas usually reduce general economic welfare. 
B) A large federal budget deficit has an adverse effect on the economy. 
C) Minimum wage increases unemployment among young and unskilled workers. 
D) All of the above are correct. 
A) Tariffs and import quotas usually reduce general economic welfare. 
B) A large federal budget deficit has an adverse effect on the economy. 
C) Minimum wage increases unemployment among young and unskilled workers. 
D) All of the above are correct.

Question 7

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Accepted Answer

A) True 
 B)False

Question 8

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 9

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury. 
A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury.

Question 10

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A) should produce. 
B) wants to produce. 
C) can produce. 
D) demands. 
A) should produce. 
B) wants to produce. 
C) can produce. 
D) demands.

Question 11

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-14   Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two
-Refer to Figure 2-14. If this economy devotes all of its available resources to producing apples, then it will produce

Accepted Answer

A) 0 bushels of apples and 200 sweaters. 
B) 80 bushels of apples and 160 sweaters 
C) 180 bushels of apples and 200 sweaters. 
D) 180 bushels of apples and 0 sweaters. 
A) 0 bushels of apples and 200 sweaters. 
B) 80 bushels of apples and 160 sweaters 
C) 180 bushels of apples and 200 sweaters. 
D) 180 bushels of apples and 0 sweaters.

Question 13

Which of these terms are used interchangeably?

Accepted Answer

A) "goods and services" and "inputs" 
B) "goods and services" and "factors of production" 
C) "inputs" and "factors of production" 
D) "land, labor, and capital" and "goods and services" 
A) "goods and services" and "inputs" 
B) "goods and services" and "factors of production" 
C) "inputs" and "factors of production" 
D) "land, labor, and capital" and "goods and services"

Question 14

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A) the respondents were almost equally divided on the propositions. 
B) the respondents favored the propositions by a slight margin. 
C) the respondents disagreed with the propositions by a slight margin. 
D) there was overwhelming endorsement of the propositions among the respondents. 
A) the respondents were almost equally divided on the propositions. 
B) the respondents favored the propositions by a slight margin. 
C) the respondents disagreed with the propositions by a slight margin. 
D) there was overwhelming endorsement of the propositions among the respondents.

Question 15

Figure 2-13  
-Refer to Figure 2-13. One difference between points F and G is that

Accepted Answer

A) Point G is unattainable with current resources, but point F is attainable. 
B) All resources are fully employed at point F but there is unemployment at point G. 
C) More output can be produced at point F but no additional output can be produced at point G. 
D) This economy produces more cookies at point G than at point F. 
A) Point G is unattainable with current resources, but point F is attainable. 
B) All resources are fully employed at point F but there is unemployment at point G. 
C) More output can be produced at point F but no additional output can be produced at point G. 
D) This economy produces more cookies at point G than at point F.

Question 16

Economists may disagree about the validity of alternative positive theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 17

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. 
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.

Question 18

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-6  
-Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Accepted Answer

A) 120 pillows and 320 blankets. 
B) 180 pillows and 180 blankets. 
C) 240 pillows and 200 blankets. 
D) We would have to know the details of this economy's technology in order to determine this. 
A) 120 pillows and 320 blankets. 
B) 180 pillows and 180 blankets. 
C) 240 pillows and 200 blankets. 
D) We would have to know the details of this economy's technology in order to determine this.

Question 20

Economists at the Department of the Treasury

Accepted Answer

A) design U.S. currency and coins. 
B) provide Congress with the annual budget. 
C) enforce the U.S. antitrust laws. 
D) provide advice on tax policy to the President. 
A) design U.S. currency and coins. 
B) provide Congress with the annual budget. 
C) enforce the U.S. antitrust laws. 
D) provide advice on tax policy to the President.

Exam 2: Thinking Like an Economist

Figure 2-17​ -Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.

Instead of conducting laboratory experiments to generate data to test their theories, economists often

In the circular-flow diagram,

Economists make assumptions to

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Analysis of data on workers and those looking for work is conducted by economists at the

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Assumptions can simplify the complex world and make it easier to understand.

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two -Refer to Figure 2-14. If this economy devotes all of its available resources to producing apples, then it will produce

Which of these terms are used interchangeably?

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Figure 2-13 -Refer to Figure 2-13. One difference between points F and G is that

Economists may disagree about the validity of alternative positive theories about how the world works.

The scientific method can be applied to the study of economics.

Figure 2-6 -Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Economists at the Department of the Treasury

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Figure 2-17 -Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.