Question 1

Figure 2-7  
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

A) it still would not be producing efficiently. 
B) there would be no gain in either engines or tvs. 
C) it would be producing more engines and more tvs than at point P. 
D) It is not possible for this economy to move from point P to point N without additional resources. 
A) it still would not be producing efficiently. 
B) there would be no gain in either engines or tvs. 
C) it would be producing more engines and more tvs than at point P. 
D) It is not possible for this economy to move from point P to point N without additional resources.

Question 2

Figure 2-14  
-Refer to Figure 2-14. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-14  
-Refer to Figure 2-14. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Accepted Answer

A) True 
 B)False

Question 4

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Accepted Answer

The answer of Suppose a war in the Middle East...

Question 5

A normative economic statement such as "The minimum wage should be abolished"

Accepted Answer

A) would likely be made by an economist acting as a scientist. 
B) would require values and data to be evaluated. 
C) would require data but not values to be evaluated. 
D) could not be evaluated by economists acting as policy advisers. 
A) would likely be made by an economist acting as a scientist. 
B) would require values and data to be evaluated. 
C) would require data but not values to be evaluated. 
D) could not be evaluated by economists acting as policy advisers.

Question 6

Table 2-4
Production Possibilities for Picnicland  
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Accepted Answer

A) 150 hotdogs 
B) 225 hotdogs 
C) 300 hotdogs 
D) 450 hotdogs 
A) 150 hotdogs 
B) 225 hotdogs 
C) 300 hotdogs 
D) 450 hotdogs

Question 7

The language of economics is

Accepted Answer

A) needlessly arcane. 
B) valuable because it provides a new and useful way of learning about the world. 
C) easy to learn within a day. 
D) unnecessary to learn for a thorough understanding of economics. 
A) needlessly arcane. 
B) valuable because it provides a new and useful way of learning about the world. 
C) easy to learn within a day. 
D) unnecessary to learn for a thorough understanding of economics.

Question 8

Figure 2-12  
-Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

A) a decrease in unemployment 
B) a technological advance in the consumer goods industries 
C) a general technological advance 
D) an increase in the availability of capital-producing resources 
A) a decrease in unemployment 
B) a technological advance in the consumer goods industries 
C) a general technological advance 
D) an increase in the availability of capital-producing resources

Question 9

To display information on two variables, an economist must use

Accepted Answer

A) a bar graph. 
B) a pie chart. 
C) the coordinate system. 
D) a time-series graph. 
A) a bar graph. 
B) a pie chart. 
C) the coordinate system. 
D) a time-series graph.

Question 10

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

Accepted Answer

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

Question 11

Which of the following is a correct statement about production possibilities frontiers?

Accepted Answer

A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. 
A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.

Question 12

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Accepted Answer

A) the effect of an increase in the alcohol tax on the market for beer 
B) the effect of foreign competition on the domestic auto industry 
C) the effect of a price war in the airline industry 
D) the effect of an increase in the minimum wage on an economy's overall rate of unemployment 
A) the effect of an increase in the alcohol tax on the market for beer 
B) the effect of foreign competition on the domestic auto industry 
C) the effect of a price war in the airline industry 
D) the effect of an increase in the minimum wage on an economy's overall rate of unemployment

Question 13

An economy's production of two goods is efficient if

Accepted Answer

A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero. 
A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero.

Question 14

For economists, substitutes for laboratory experiments often come in the form of

Accepted Answer

A) natural experiments offered by history. 
B) untested theories. 
C) "rules of thumb" and other such conveniences. 
D) reliance upon the wisdom of elders in the economics profession. 
A) natural experiments offered by history. 
B) untested theories. 
C) "rules of thumb" and other such conveniences. 
D) reliance upon the wisdom of elders in the economics profession.

Question 15

Positive statements are not

Accepted Answer

A) descriptive. 
B) prescriptive. 
C) claims about how the world is. 
D) made by economists speaking as scientists. 
A) descriptive. 
B) prescriptive. 
C) claims about how the world is. 
D) made by economists speaking as scientists.

Question 16

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

Accepted Answer

A) the slope of the production possibilities frontier. 
B) 3/2 sofas. 
C) 2/3 of a sofa. 
D) Both a and b are correct. 
A) the slope of the production possibilities frontier. 
B) 3/2 sofas. 
C) 2/3 of a sofa. 
D) Both a and b are correct.

Question 17

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 18

Figure 2-10
Panel (a)
Panel (b)    
-Refer to Figure 2-10, Panel (a). Production is

Accepted Answer

A) possible at points V, W, Y, and Z, but efficient only at points V, W, and Z. 
B) possible at points V, W, Y, and Z, but efficient only at point Y. 
C) possible at points U, V, W, and Z, but efficient only at points V, W, and Z. 
D) possible at points U, V, W, and Z, but efficient only at point U. 
A) possible at points V, W, Y, and Z, but efficient only at points V, W, and Z. 
B) possible at points V, W, Y, and Z, but efficient only at point Y. 
C) possible at points U, V, W, and Z, but efficient only at points V, W, and Z. 
D) possible at points U, V, W, and Z, but efficient only at point U.

Question 19

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Accepted Answer

A) True 
 B)False

Question 20

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Figure 2-14 -Refer to Figure 2-14. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

A normative economic statement such as "The minimum wage should be abolished"

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

The language of economics is

Figure 2-12 -Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

To display information on two variables, an economist must use

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

Which of the following is a correct statement about production possibilities frontiers?

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

An economy's production of two goods is efficient if

For economists, substitutes for laboratory experiments often come in the form of

Positive statements are not

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

When a variable that is named on an axis of a graph changes, the curve shifts.

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). Production is

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

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 approximately 20 additional gadgets by moving from point B to point C is