Question 1

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 2

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 3

An assumption an economist might make while studying international trade is

Accepted Answer

A) there are only two countries. 
B) countries only produce two goods. 
C) technology does not change. 
D) All of the above are possible assumptions. 
A) there are only two countries. 
B) countries only produce two goods. 
C) technology does not change. 
D) All of the above are possible assumptions.

Question 4

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 5

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Accepted Answer

A) spending. 
B) revenue. 
C) income. 
D) wages, rent, and profit. 
A) spending. 
B) revenue. 
C) income. 
D) wages, rent, and profit.

Question 6

An economic outcome is said to be efficient if the economy is

Accepted Answer

A) using all of the scarce resources it has available. 
B) conserving on resources, rather than using all available resources. 
C) getting all it can get from the scarce resources it has available. 
D) able to produce more than what is currently being produced without additional resources. 
A) using all of the scarce resources it has available. 
B) conserving on resources, rather than using all available resources. 
C) getting all it can get from the scarce resources it has available. 
D) able to produce more than what is currently being produced without additional resources.

Question 7

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 8

One thing economists do to help them understand how the real world works is

Accepted Answer

A) make assumptions. 
B) ignore the past. 
C) try to capture every aspect of the real world in the models they construct. 
D) All of the above are correct. 
A) make assumptions. 
B) ignore the past. 
C) try to capture every aspect of the real world in the models they construct. 
D) All of the above are correct.

Question 9

When economists are trying to explain the world, they are

Accepted Answer

A) scientists. 
B) policy advisers. 
C) in the realm of microeconomics rather than macroeconomics. 
D) in the realm of normative economics rather than positive economics. 
A) scientists. 
B) policy advisers. 
C) in the realm of microeconomics rather than macroeconomics. 
D) in the realm of normative economics rather than positive economics.

Question 10

The scientific method is applicable to studying

Accepted Answer

A) natural sciences, but not social sciences. 
B) social sciences, but not natural sciences. 
C) both natural sciences and social sciences. 
D) None of the above is correct. 
A) natural sciences, but not social sciences. 
B) social sciences, but not natural sciences. 
C) both natural sciences and social sciences. 
D) None of the above is correct.

Question 11

The second number in any ordered pair is

Accepted Answer

A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope. 
A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope.

Question 12

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A) goods and services 
B) land, labor, and capital 
C) dollars spent on goods and services 
D) wages, rent, and profit 
A) goods and services 
B) land, labor, and capital 
C) dollars spent on goods and services 
D) wages, rent, and profit

Question 13

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Which of the following is not correct about most economic models?

Accepted Answer

A) They are composed of equations and diagrams. 
B) They contribute very little to economists' understanding of the real world. 
C) They omit many features of the real-world economy. 
D) In constructing models, economists make assumptions. 
A) They are composed of equations and diagrams. 
B) They contribute very little to economists' understanding of the real world. 
C) They omit many features of the real-world economy. 
D) In constructing models, economists make assumptions.

Question 16

Figure 2-3  
-Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Accepted Answer

A) produce and sell goods and services 
B) hire and use factors of production 
C) own and sell factors of production 
D) exchange goods and services between firms and households 
A) produce and sell goods and services 
B) hire and use factors of production 
C) own and sell factors of production 
D) exchange goods and services between firms and households

Question 17

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Accepted Answer

The answer of Economists at which administrative department analyze data...

Question 18

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-3  
-Refer to Figure 2-3. What do the inner arrows represent in the figure?

Accepted Answer

flow of in

Question 20

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

Accepted Answer

The answer of Figure 2-15  
-Refer to Figure 2-15....

Exam 2: Thinking Like an Economist

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

An assumption an economist might make while studying international trade is

Two variables that have a negative correlation move in opposite directions.

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

An economic outcome is said to be efficient if the economy is

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

One thing economists do to help them understand how the real world works is

When economists are trying to explain the world, they are

The scientific method is applicable to studying

The second number in any ordered pair is

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Historical episodes allow economists to illustrate and evaluate current economic theories.

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

Which of the following is not correct about most economic models?

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Figure 2-3 -Refer to Figure 2-3. What do the inner arrows represent in the figure?

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

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

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