Question 1

Figure 2-17  
-Refer to Figure 2-17. The movement from point A to point B is a(n)

Accepted Answer

A) shift of the demand curve. 
B) indication of a change in preferences for grapes. 
C) movement along the demand curve. 
D) indication of an increase in income. 
A) shift of the demand curve. 
B) indication of a change in preferences for grapes. 
C) movement along the demand curve. 
D) indication of an increase in income.

Question 2

Normative statements are

Accepted Answer

A) prescriptive, whereas positive statements are descriptive. 
B) descriptive, whereas positive statements are prescriptive. 
C) backward-looking, whereas positive statements are forward-looking. 
D) forward-looking, whereas positive statements are backward-looking. 
A) prescriptive, whereas positive statements are descriptive. 
B) descriptive, whereas positive statements are prescriptive. 
C) backward-looking, whereas positive statements are forward-looking. 
D) forward-looking, whereas positive statements are backward-looking.

Question 3

The "broken window fallacy"

Accepted Answer

A) explains why inflation is so high. 
B) is a justification for the government to print more money. 
C) is illustrated when a government program is justified not on its merits but on the number of jobs it will create. 
D) has nothing to do with public policy. 
A) explains why inflation is so high. 
B) is a justification for the government to print more money. 
C) is illustrated when a government program is justified not on its merits but on the number of jobs it will create. 
D) has nothing to do with public policy.

Question 4

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Question 5

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Accepted Answer

A) bowed outward indicating increasing opportunity costs. 
B) bowed outward indicating decreasing opportunity costs. 
C) a straight line indicating constant opportunity costs. 
D) bowed inward indicating increasing opportunity costs. 
A) bowed outward indicating increasing opportunity costs. 
B) bowed outward indicating decreasing opportunity costs. 
C) a straight line indicating constant opportunity costs. 
D) bowed inward indicating increasing opportunity costs.

Question 6

Figure 2-17​  
-Refer to Figure 2-17. This economy fully employs its resources when it produces 4000 shoes and zero t-shirts.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-5  
-Refer to Figure 2-5. It is not possible for this economy to produce at point

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 8

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Accepted Answer

A) the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B) the tradeoff between production of jewelry and production of clothing 
C) the opportunity cost of clothing in terms of jewelry 
D) the effect of economic growth on production possibilities involving jewelry and clothing 
A) the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B) the tradeoff between production of jewelry and production of clothing 
C) the opportunity cost of clothing in terms of jewelry 
D) the effect of economic growth on production possibilities involving jewelry and clothing

Question 9

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-16  
-Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

Accepted Answer

A) a positive correlation. 
B) a negative correlation. 
C) a random correlation. 
D) no correlation. 
A) a positive correlation. 
B) a negative correlation. 
C) a random correlation. 
D) no correlation.

Question 11

Figure 2-19
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service  
-Refer to Figure 2-19. Which of the following conclusions should not be drawn from observing this graph?

Accepted Answer

A) There is a positive correlation between the frequency of service and the number of passengers. 
B) When there are 5 stops per hour, there are approximately 200 passengers. 
C) More stops per hour is associated with more passengers per hour. 
D) No other factors besides the frequency of service affect the number of passengers. 
A) There is a positive correlation between the frequency of service and the number of passengers. 
B) When there are 5 stops per hour, there are approximately 200 passengers. 
C) More stops per hour is associated with more passengers per hour. 
D) No other factors besides the frequency of service affect the number of passengers.

Question 12

The circular-flow diagram

Accepted Answer

A) is an economic model. 
B) incorporates two types of decision makers: households and firms. 
C) represents the flows of inputs, outputs, and dollars. 
D) All of the above are correct. 
A) is an economic model. 
B) incorporates two types of decision makers: households and firms. 
C) represents the flows of inputs, outputs, and dollars. 
D) All of the above are correct.

Question 13

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A) at which very few excel. 
B) but not as easy as philosophy or the pure sciences. 
C) which very few can enjoy. 
D) which deals primarily with common sense. 
A) at which very few excel. 
B) but not as easy as philosophy or the pure sciences. 
C) which very few can enjoy. 
D) which deals primarily with common sense.

Question 14

In the circular-flow diagram, in the markets for

Accepted Answer

A) goods and services, households and firms are both sellers. 
B) goods and services, households are buyers and firms are sellers. 
C) the factors of production, households are buyers and firms are sellers. 
D) the factors of production, households and firms are both buyers. 
A) goods and services, households and firms are both sellers. 
B) goods and services, households are buyers and firms are sellers. 
C) the factors of production, households are buyers and firms are sellers. 
D) the factors of production, households and firms are both buyers.

Question 15

Figure 2-16  
-Refer to Figure 2-16. The graph shown is known as a

Accepted Answer

A) time-series graph. 
B) bar graph. 
C) scatterplot. 
D) pie chart. 
A) time-series graph. 
B) bar graph. 
C) scatterplot. 
D) pie chart.

Question 16

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

Accepted Answer

A) Harry Truman 
B) George Bernard Shaw 
C) John Maynard Keynes 
D) Ronald Reagan 
A) Harry Truman 
B) George Bernard Shaw 
C) John Maynard Keynes 
D) Ronald Reagan

Question 17

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A) Following the most recent recession, the economy is recovering at a slower than usual pace. 
B) To stimulate the economy during the most recent recession, the federal government increased spending. 
C) In response to the most recent recession, the federal government extended the duration of unemployment benefits. 
D) The federal government's responses to the most recent recession were insufficient. 
A) Following the most recent recession, the economy is recovering at a slower than usual pace. 
B) To stimulate the economy during the most recent recession, the federal government increased spending. 
C) In response to the most recent recession, the federal government extended the duration of unemployment benefits. 
D) The federal government's responses to the most recent recession were insufficient.

Question 19

The x-coordinate is the

Accepted Answer

A) first number of an ordered pair and represents the point's horizontal location. 
B) second number of an ordered pair and represents the point's horizontal location. 
C) first number of an ordered pair and represents the point's vertical location. 
D) second number of an ordered pair and represents the point's vertical location. 
A) first number of an ordered pair and represents the point's horizontal location. 
B) second number of an ordered pair and represents the point's horizontal location. 
C) first number of an ordered pair and represents the point's vertical location. 
D) second number of an ordered pair and represents the point's vertical location.

Question 20

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Accepted Answer

A) Isaac Newton 
B) Albert Einstein 
C) Adam Smith 
D) Benjamin Franklin 
A) Isaac Newton 
B) Albert Einstein 
C) Adam Smith 
D) Benjamin Franklin

Exam 2: Thinking Like an Economist

Figure 2-17 -Refer to Figure 2-17. The movement from point A to point B is a(n)

Normative statements are

The "broken window fallacy"

The President counts among his economic advisors the Congressional Budget Office.

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Figure 2-17​ -Refer to Figure 2-17. This economy fully employs its resources when it produces 4000 shoes and zero t-shirts.

Figure 2-5 -Refer to Figure 2-5. It is not possible for this economy to produce at point

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

Figure 2-16 -Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

The circular-flow diagram

John Maynard Keynes referred to economics as an easy subject,

In the circular-flow diagram, in the markets for

Figure 2-16 -Refer to Figure 2-16. The graph shown is known as a

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

Which of the following is an example of a normative, as opposed to positive, statement?

The x-coordinate is the

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

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. This economy fully employs its resources when it produces 4000 shoes and zero t-shirts.