Question 1

When two variables move in opposite directions, the curve relating them is

Accepted Answer

A) upward sloping, and we say the variables are positively related. 
B) upward sloping, and we say the variables are negatively related. 
C) downward sloping, and we say the variables are positively related. 
D) downward sloping, and we say the variables are negatively related. 
A) upward sloping, and we say the variables are positively related. 
B) upward sloping, and we say the variables are negatively related. 
C) downward sloping, and we say the variables are positively related. 
D) downward sloping, and we say the variables are negatively related.

Question 2

Figure 2-16​  
-Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

Accepted Answer

A) 0 widgets. 
B) 10 widgets. 
C) 20 widgets. 
D) 30 widgets. 
A) 0 widgets. 
B) 10 widgets. 
C) 20 widgets. 
D) 30 widgets.

Question 3

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Accepted Answer

A) True 
 B)False

Question 4

In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now?

Accepted Answer

A) Unemployed labor is put to work producing jam and bread. 
B) The economy puts its idle capital to work producing jam and bread. 
C) The economy experiences economic growth. 
D) All of the above are correct. 
A) Unemployed labor is put to work producing jam and bread. 
B) The economy puts its idle capital to work producing jam and bread. 
C) The economy experiences economic growth. 
D) All of the above are correct.

Question 5

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Accepted Answer

A) Transit ridership increased in Atlanta following an increase in gas prices. 
B) Federal tax revenue increased following a decrease in the tax rate. 
C) Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances. 
D) Following the imposition of austerity measures, the growth rate of the economy in Greece slowed. 
A) Transit ridership increased in Atlanta following an increase in gas prices. 
B) Federal tax revenue increased following a decrease in the tax rate. 
C) Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances. 
D) Following the imposition of austerity measures, the growth rate of the economy in Greece slowed.

Question 6

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 7

The slope of a line that passes through the points (5, 8) and (12, 12) is

Accepted Answer

A) -7/4. 
B) -4/7. 
C) 4/7. 
D) 7/4. 
A) -7/4. 
B) -4/7. 
C) 4/7. 
D) 7/4.

Question 8

Figure 2-10
Panel (a)
Panel (b)    
-Refer to Figure 2-10, Panel (a). The opportunity cost of one sofa is highest when the economy produces

Accepted Answer

A) 0 sofas. 
B) 12 sofas. 
C) 20 sofas. 
D) 24 sofas. 
A) 0 sofas. 
B) 12 sofas. 
C) 20 sofas. 
D) 24 sofas.

Question 9

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-9
Panel (a)
Panel (b)    
-Refer to Figure 2-9, Panel (a). Production is

Accepted Answer

A) possible at points J, K, L, and M, but efficient only at points J, L, and M. 
B) possible at points J, K, L, and M, but efficient only at point K. 
C) possible at points J, L, M, and N, but efficient only at points J, L, and M. 
D) possible at points J, L, M, and N, but efficient only at point N. 
A) possible at points J, K, L, and M, but efficient only at points J, L, and M. 
B) possible at points J, K, L, and M, but efficient only at point K. 
C) possible at points J, L, M, and N, but efficient only at points J, L, and M. 
D) possible at points J, L, M, and N, but efficient only at point N.

Question 11

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year, it is producing 1050 units of food and 52 machines. Which of the following events could not explain the increase in output?

Accepted Answer

A) a reduction in unemployment 
B) an increase in available labor 
C) an improvement in technology 
D) Any of these events could explain the increase in output. 
A) a reduction in unemployment 
B) an increase in available labor 
C) an improvement in technology 
D) Any of these events could explain the increase in output.

Question 12

Which of the following is not something that John Maynard Keynes ​used to describe an economist?

Accepted Answer

A) ​He must be a mathematician, historian, statesman, and philosopher in some degree. 
B) ​He must understand symbols and speak in words. 
C) ​He must only contemplate in abstract and general terms. 
D) ​He must study the present in light of the past for purposes of the future. 
A) ​He must be a mathematician, historian, statesman, and philosopher in some degree. 
B) ​He must understand symbols and speak in words. 
C) ​He must only contemplate in abstract and general terms. 
D) ​He must study the present in light of the past for purposes of the future.

Question 13

The essence of science is

Accepted Answer

A) the laboratory experiment. 
B) the scientific method. 
C) the study of nature, but not the study of society. 
D) All of the above are correct. 
A) the laboratory experiment. 
B) the scientific method. 
C) the study of nature, but not the study of society. 
D) All of the above are correct.

Question 14

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. Which point(s) on the graph is(are) efficient production possibilities?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 15

A microeconomist - as opposed to a macroeconomist - might study

Accepted Answer

A) the effect of a national healthcare program on the nation's unemployment rate. 
B) the effect of new regulations on production in the pulp and paper industry. 
C) the effect of changes in interest rates on gross domestic product. 
D) the growth rate of production in the economy. 
A) the effect of a national healthcare program on the nation's unemployment rate. 
B) the effect of new regulations on production in the pulp and paper industry. 
C) the effect of changes in interest rates on gross domestic product. 
D) the growth rate of production in the economy.

Question 16

When two variables have a positive 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 variables' values are never negative. 
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 variables' values are never negative.

Question 17

In the circular-flow diagram, factors of production include land, labor, and capital.

Accepted Answer

A) True 
 B)False

Question 18

In the circular-flow diagram,

Accepted Answer

A) firms are buyers in the markets for goods and services. 
B) households are sellers in the markets for the factors of production. 
C) firms are sellers in the markets for factors of production and in the markets for goods and services. 
D) dollars that are spent on goods and services flow directly from firms to households. 
A) firms are buyers in the markets for goods and services. 
B) households are sellers in the markets for the factors of production. 
C) firms are sellers in the markets for factors of production and in the markets for goods and services. 
D) dollars that are spent on goods and services flow directly from firms to households.

Question 19

You know an economist has crossed the line from policy adviser to scientist when he or she

Accepted Answer

A) claims that the problem at hand is widely misunderstood by non-economists. 
B) makes positive statements. 
C) talks about values. 
D) makes a claim about how the world should be. 
A) claims that the problem at hand is widely misunderstood by non-economists. 
B) makes positive statements. 
C) talks about values. 
D) makes a claim about how the world should be.

Question 20

A model can be accurately described as a

Accepted Answer

A) theoretical abstraction with very little value. 
B) device that is useful only to the people who created it. 
C) realistic and carefully constructed theory. 
D) simplification of reality. 
A) theoretical abstraction with very little value. 
B) device that is useful only to the people who created it. 
C) realistic and carefully constructed theory. 
D) simplification of reality.

Exam 2: Thinking Like an Economist

When two variables move in opposite directions, the curve relating them is

Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now?

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

The slope of a line that passes through the points (5, 8) and (12, 12) is

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). The opportunity cost of one sofa is highest when the economy produces

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). Production is

Which of the following is not something that John Maynard Keynes ​used to describe an economist?

The essence of science is

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. Which point(s) on the graph is(are) efficient production possibilities?

A microeconomist - as opposed to a macroeconomist - might study

When two variables have a positive correlation,

In the circular-flow diagram, factors of production include land, labor, and capital.

In the circular-flow diagram,

You know an economist has crossed the line from policy adviser to scientist when he or she

A model can be accurately described as a

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 2-16 -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

Which of the following is not something that John Maynard Keynes used to describe an economist?