Question 1

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 2

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) Americans deserve a cleaner environment. 
B) Reducing emissions reduces days missed from school due to asthma. 
C) All Americans are entitled to quality health care. 
D) Economic policies should focus on improving equality. 
A) Americans deserve a cleaner environment. 
B) Reducing emissions reduces days missed from school due to asthma. 
C) All Americans are entitled to quality health care. 
D) Economic policies should focus on improving equality.

Question 4

Normative conclusions

Accepted Answer

A) come from positive analysis alone. 
B) are based on ignorance of positive analysis. 
C) involve value judgments. 
D) reflect the economist's role as scientist. 
A) come from positive analysis alone. 
B) are based on ignorance of positive analysis. 
C) involve value judgments. 
D) reflect the economist's role as scientist.

Question 5

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-14  
-Refer to Figure 2-14. It is possible for this economy to produce 75 doghouses.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-16​  
-Refer to Figure 2-16. The opportunity cost of obtaining 20 additional widgets by moving from point C to point D is

Accepted Answer

A) 0 gadgets. 
B) 10 gadgets. 
C) 20 gadgets. 
D) none of the above; the economy cannot move from point C to point D. 
A) 0 gadgets. 
B) 10 gadgets. 
C) 20 gadgets. 
D) none of the above; the economy cannot move from point C to point D.

Question 8

Between the two ordered pairs (3, 6) and (7, 18), the slope is

Accepted Answer

A) 1/3 
B) -1/3. 
C) 3. 
D) -3. 
A) 1/3 
B) -1/3. 
C) 3. 
D) -3.

Question 9

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Accepted Answer

A) True 
 B)False

Question 10

Just like models constructed in other areas of science, economic models

Accepted Answer

A) incorporate assumptions that contradict reality. 
B) incorporate all details of the real world. 
C) complicate reality. 
D) avoid the use of diagrams and equations. 
A) incorporate assumptions that contradict reality. 
B) incorporate all details of the real world. 
C) complicate reality. 
D) avoid the use of diagrams and equations.

Question 11

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

Accepted Answer

A) 1600 bushels of corn and 300 bushels of wheat 
B) 1400 bushels of corn and 800 bushels of wheat 
C) 1000 bushels of corn and 2000 bushels of wheat 
D) 600 bushels of corn and 1800 bushels of wheat 
A) 1600 bushels of corn and 300 bushels of wheat 
B) 1400 bushels of corn and 800 bushels of wheat 
C) 1000 bushels of corn and 2000 bushels of wheat 
D) 600 bushels of corn and 1800 bushels of wheat

Question 12

When a relevant variable that is not named on either axis changes,

Accepted Answer

A) there will be a movement along the curve. 
B) the curve will rotate clockwise. 
C) the curve will be unaffected since only the variables on the axis affect the curve. 
D) the curve will shift. 
A) there will be a movement along the curve. 
B) the curve will rotate clockwise. 
C) the curve will be unaffected since only the variables on the axis affect the curve. 
D) the curve will shift.

Question 13

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A) There is a great deal of agreement among economists on virtually every economic issue. 
B) There is a great deal of agreement among economists on many important economic issues. 
C) All disagreements among economists are attributable to differences in their values. 
D) All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories. 
A) There is a great deal of agreement among economists on virtually every economic issue. 
B) There is a great deal of agreement among economists on many important economic issues. 
C) All disagreements among economists are attributable to differences in their values. 
D) All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.

Question 14

The use of the coordinate system allows

Accepted Answer

A) for the display of the flows of dollars, goods and services, and factors of production in an economic system. 
B) for the display of how labor and other resources are organized in the production process. 
C) for the display of two variables on a single graph. 
D) for the creation of pie charts and bar graphs. 
A) for the display of the flows of dollars, goods and services, and factors of production in an economic system. 
B) for the display of how labor and other resources are organized in the production process. 
C) for the display of two variables on a single graph. 
D) for the creation of pie charts and bar graphs.

Question 15

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Accepted Answer

A) True 
 B)False

Question 16

A circular-flow model and production possibilities frontier are similar in that

Accepted Answer

A) neither allows economic analysis to occur. 
B) neither can be represented visually on a graph. 
C) both make use of assumptions. 
D) both make use of complex equations to arrive at solutions. 
A) neither allows economic analysis to occur. 
B) neither can be represented visually on a graph. 
C) both make use of assumptions. 
D) both make use of complex equations to arrive at solutions.

Question 17

Normative statements are not

Accepted Answer

A) descriptive. 
B) prescriptive. 
C) claims about how the world should be. 
D) made by economists speaking as policy advisers. 
A) descriptive. 
B) prescriptive. 
C) claims about how the world should be. 
D) made by economists speaking as policy advisers.

Question 18

Figure 2-6  
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Accepted Answer

A) zero. 
B) 40 blankets. 
C) 120 pillows. 
D) 360 blankets. 
A) zero. 
B) 40 blankets. 
C) 120 pillows. 
D) 360 blankets.

Question 19

According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

Accepted Answer

A) True 
 B)False

Question 20

Figure 2-14  
-Refer to Figure 2-14. The opportunity cost of moving from point B to point D is 15 doghouses.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Economists believe that production possibilities frontiers rarely have a bowed shape.

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

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

Normative conclusions

Points inside the production possibilities frontier represent feasible levels of production.

Figure 2-14 -Refer to Figure 2-14. It is possible for this economy to produce 75 doghouses.

Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining 20 additional widgets by moving from point C to point D is

Between the two ordered pairs (3, 6) and (7, 18), the slope is

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Just like models constructed in other areas of science, economic models

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

When a relevant variable that is not named on either axis changes,

Which of the following statements is correct about the extent of disagreement among economists?

The use of the coordinate system allows

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

A circular-flow model and production possibilities frontier are similar in that

Normative statements are not

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of moving from point B to point D is 15 doghouses.

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 20 additional widgets by moving from point C to point D is