Question 1

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Accepted Answer

A) have no questions but hundreds of answers. 
B) have 100 questions and 3,000 answers. 
C) have 1,000 questions but no answers. 
D) never produce a winner. 
A) have no questions but hundreds of answers. 
B) have 100 questions and 3,000 answers. 
C) have 1,000 questions but no answers. 
D) never produce a winner.

Question 2

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) unattainable given current resources and technology?

Accepted Answer

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

Question 3

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A) enforce the nation's antitrust laws. 
B) set the nation's monetary policy. 
C) provide evidence that incumbent members of Congress are performing well in their jobs. 
D) provide independent evaluations of policy proposals. 
A) enforce the nation's antitrust laws. 
B) set the nation's monetary policy. 
C) provide evidence that incumbent members of Congress are performing well in their jobs. 
D) provide independent evaluations of policy proposals.

Question 4

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. What is the opportunity cost of moving from point T to point R?

Accepted Answer

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

Question 5

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 6

Economic models are built with

Accepted Answer

A) recommendations concerning public policies. 
B) facts about the legal system. 
C) assumptions. 
D) statistical forecasts. 
A) recommendations concerning public policies. 
B) facts about the legal system. 
C) assumptions. 
D) statistical forecasts.

Question 7

Figure 2-16​  
-Refer to Figure 2-16. The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is

Accepted Answer

A) 10 gadgets. 
B) 30 widgets 
C) 10 gadgets and 30 widgets. 
D) 0 gadgets. 
A) 10 gadgets. 
B) 30 widgets 
C) 10 gadgets and 30 widgets. 
D) 0 gadgets.

Question 8

The production possibilities frontier illustrates

Accepted Answer

A) the trade-off between efficiency and equality. 
B) the combination of output that an economy should produce. 
C) the combination of output that each member of society should consume. 
D) None of the above is correct. 
A) the trade-off between efficiency and equality. 
B) the combination of output that an economy should produce. 
C) the combination of output that each member of society should consume. 
D) None of the above is correct.

Question 9

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

Accepted Answer

A) wages 
B) land 
C) capital 
D) goods and services sold 
A) wages 
B) land 
C) capital 
D) goods and services sold

Question 10

Figure 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of spending by households?

Accepted Answer

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

Question 11

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is correct?

Accepted Answer

A) Economists almost always find it easy to conduct experiments in order to test their theories. 
B) Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories. 
C) Economics is a social science rather than a true science because it cannot employ the scientific method. 
D) Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history. 
A) Economists almost always find it easy to conduct experiments in order to test their theories. 
B) Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories. 
C) Economics is a social science rather than a true science because it cannot employ the scientific method. 
D) Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.

Question 13

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

Accepted Answer

A) spending. 
B) revenue. 
C) income. 
D) wages, rent, and profit. 
A) spending. 
B) revenue. 
C) income. 
D) wages, rent, and profit.

Question 14

Economists at the Department of Justice

Accepted Answer

A) track the behavior of the nation's money supply. 
B) advise Congress on economic matters. 
C) help enforce the nation's antitrust laws. 
D) prepare the federal budget. 
A) track the behavior of the nation's money supply. 
B) advise Congress on economic matters. 
C) help enforce the nation's antitrust laws. 
D) prepare the federal budget.

Question 15

In the markets for goods and services in the circular flow diagram, households act as

Accepted Answer

The answer of In the markets for goods and services...

Question 16

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-2  
-Refer to Figure 2-2. Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular-flow diagram, then Juan's income is represented by a flow of dollars

Accepted Answer

A) from Box A to Box C. 
B) from Box C to Box A. 
C) from Box B to Box D. 
D) from Box D to Box B. 
A) from Box A to Box C. 
B) from Box C to Box A. 
C) from Box B to Box D. 
D) from Box D to Box B.

Question 18

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Accepted Answer

A) the design and implementation of laboratory experiments. 
B) knowing when to stop collecting data and when to start analyzing the data. 
C) deciding which assumptions to make. 
D) being able to mathematically model natural phenomena. 
A) the design and implementation of laboratory experiments. 
B) knowing when to stop collecting data and when to start analyzing the data. 
C) deciding which assumptions to make. 
D) being able to mathematically model natural phenomena.

Question 19

Almost all economists agree that local and state governments should

Accepted Answer

A) eliminate subsidies to professional sports franchises. 
B) increase subsidies to professional sports franchises. 
C) copy economic policy from Washington, D.C. 
D) prevent companies from outsourcing work. 
A) eliminate subsidies to professional sports franchises. 
B) increase subsidies to professional sports franchises. 
C) copy economic policy from Washington, D.C. 
D) prevent companies from outsourcing work.

Question 20

Figure 2-5  
-Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

Accepted Answer

A) 0 washers. 
B) 20 washers. 
C) 40 washers. 
D) None of the above; the economy cannot move from point D to point A. 
A) 0 washers. 
B) 20 washers. 
C) 40 washers. 
D) None of the above; the economy cannot move from point D to point A.

Exam 2: Thinking Like an Economist

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

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) unattainable given current resources and technology?

Congress relies on economists at the Congressional Budget Office to

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. What is the opportunity cost of moving from point T to point R?

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Economic models are built with

Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is

The production possibilities frontier illustrates

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of spending by households?

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Which of the following statements is correct?

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

Economists at the Department of Justice

In the markets for goods and services in the circular flow diagram, households act as

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Almost all economists agree that local and state governments should

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A 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

Filters

Figure 2-16 -Refer to Figure 2-16. The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is