Question 1

Economists use some familiar terms in specialized ways

Accepted Answer

A) to make the subject sound more complex than it is. 
B) because every respectable field of study has its own language. 
C) to provide a new and useful way of thinking about the world. 
D) because it was too difficult to come up with new terms. 
A) to make the subject sound more complex than it is. 
B) because every respectable field of study has its own language. 
C) to provide a new and useful way of thinking about the world. 
D) because it was too difficult to come up with new terms.

Question 2

Figure 2-14  
-Refer to Figure 2-14. Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-17  
-Refer to Figure 2-17. The slope of the curve between points A and B is

Accepted Answer

A) -5 
B) -1/5 
C) 1/5 
D) 5 
A) -5 
B) -1/5 
C) 1/5 
D) 5

Question 4

Figure 2-14  
-Refer to Figure 2-14. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Accepted Answer

A) True 
 B)False

Question 5

Figure 2-14  
-Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements applies to economics, as well as to other sciences such as physics?

Accepted Answer

A) Experiments are considered valid only when they are conducted in a laboratory. 
B) Good theories do not need to be tested. 
C) Real-world observations often lead to theories. 
D) Economics, as well as other sciences, is concerned primarily with abstract concepts. 
A) Experiments are considered valid only when they are conducted in a laboratory. 
B) Good theories do not need to be tested. 
C) Real-world observations often lead to theories. 
D) Economics, as well as other sciences, is concerned primarily with abstract concepts.

Question 7

Economists make use of assumptions, some of which are unrealistic, for the purpose of

Accepted Answer

A) teaching economics to people who have never before studied economics. 
B) advancing their political agendas. 
C) developing models when the scientific method cannot be used. 
D) focusing their thinking. 
A) teaching economics to people who have never before studied economics. 
B) advancing their political agendas. 
C) developing models when the scientific method cannot be used. 
D) focusing their thinking.

Question 8

Economists use one standard set of assumptions to answer all economic questions.

Accepted Answer

A) True 
 B)False

Question 9

Economists speaking like scientists make

Accepted Answer

A) normative statements. 
B) prescriptive statements. 
C) claims about how the world is. 
D) claims about how the world should be. 
A) normative statements. 
B) prescriptive statements. 
C) claims about how the world is. 
D) claims about how the world should be.

Question 10

Figure 2-14  
-Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Accepted Answer

A) sound logic. 
B) reverse causality. 
C) omitted variables. 
D) bias. 
A) sound logic. 
B) reverse causality. 
C) omitted variables. 
D) bias.

Question 12

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A) performing an experiment in an economic system. 
B) applying mathematical methods to economic analysis. 
C) analyzing available data. 
D) formulating theories about economic events. 
A) performing an experiment in an economic system. 
B) applying mathematical methods to economic analysis. 
C) analyzing available data. 
D) formulating theories about economic events.

Question 13

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 14

A production possibilities frontier can shift outward if

Accepted Answer

A) government increases the amount of money in the economy. 
B) there is a technological improvement. 
C) resources are shifted from the production of one good to the production of the other good. 
D) the economy abandons inefficient production methods in favor of efficient production methods. 
A) government increases the amount of money in the economy. 
B) there is a technological improvement. 
C) resources are shifted from the production of one good to the production of the other good. 
D) the economy abandons inefficient production methods in favor of efficient production methods.

Question 15

In the markets for the factors of production in the circular-flow diagram,

Accepted Answer

A) households are sellers and firms are buyers. 
B) households are buyers and firms are sellers. 
C) households and firms are both buyers. 
D) households and firms are both sellers. 
A) households are sellers and firms are buyers. 
B) households are buyers and firms are sellers. 
C) households and firms are both buyers. 
D) households and firms are both sellers.

Question 16

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Accepted Answer

A) For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics. 
B) Microeconomists study markets for small products, whereas macroeconomists study markets for large products. 
C) Microeconomics and macroeconomics are distinct from one another, yet they are closely related. 
D) Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies. 
A) For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics. 
B) Microeconomists study markets for small products, whereas macroeconomists study markets for large products. 
C) Microeconomics and macroeconomics are distinct from one another, yet they are closely related. 
D) Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies.

Question 17

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A) less than 0. 
B) between zero and 1. 
C) between one and infinity. 
D) undefined. 
A) less than 0. 
B) between zero and 1. 
C) between one and infinity. 
D) undefined.

Question 18

For economists, conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-6  
-Refer to Figure 2-6. A movement from point H to point K could be caused by

Accepted Answer

A) unemployment. 
B) a decrease in society's preference for pillows. 
C) fewer resources available for production of pillows. 
D) All of the above are correct. 
A) unemployment. 
B) a decrease in society's preference for pillows. 
C) fewer resources available for production of pillows. 
D) All of the above are correct.

Question 20

The decision of which assumptions to make is

Accepted Answer

A) an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B) not a particularly important decision for an economist. 
C) usually regarded as an art in scientific thinking. 
D) usually regarded as the easiest part of the scientific method. 
A) an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B) not a particularly important decision for an economist. 
C) usually regarded as an art in scientific thinking. 
D) usually regarded as the easiest part of the scientific method.

Exam 2: Thinking Like an Economist

Economists use some familiar terms in specialized ways

Figure 2-14 -Refer to Figure 2-14. Unemployment could cause this economy to produce at point B.

Figure 2-17 -Refer to Figure 2-17. The slope of the curve between points A and B is

Figure 2-14 -Refer to Figure 2-14. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Figure 2-14 -Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Which of the following statements applies to economics, as well as to other sciences such as physics?

Economists make use of assumptions, some of which are unrealistic, for the purpose of

Economists use one standard set of assumptions to answer all economic questions.

Economists speaking like scientists make

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Good assumptions simplify a problem without substantially affecting the answer.

A production possibilities frontier can shift outward if

In the markets for the factors of production in the circular-flow diagram,

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

For economists, conducting experiments is often difficult and sometimes impossible.

Figure 2-6 -Refer to Figure 2-6. A movement from point H to point K could be caused by

The decision of which assumptions to make is

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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