Question 1

In constructing models, economists

Accepted Answer

A) leave out equations, since equations and models tend to contradict one another. 
B) ignore the long run, since models are useful only for short-run analysis. 
C) sometimes make assumptions that are contrary to features of the real world. 
D) try to include every feature of the economy. 
A) leave out equations, since equations and models tend to contradict one another. 
B) ignore the long run, since models are useful only for short-run analysis. 
C) sometimes make assumptions that are contrary to features of the real world. 
D) try to include every feature of the economy.

Question 2

Figure 2-6  
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A) This economy has moved from a point of inefficient production to a point of efficient production. 
B) This economy has experienced economic growth. 
C) This economy has experienced an increase in employment. 
D) None of the above is correct. 
A) This economy has moved from a point of inefficient production to a point of efficient production. 
B) This economy has experienced economic growth. 
C) This economy has experienced an increase in employment. 
D) None of the above is correct.

Question 3

Figure 2-21  
-Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Accepted Answer

A) the price of snowblowers 
B) a change in consumers' incomes 
C) a change in the seasons 
D) All of the above are correct. 
A) the price of snowblowers 
B) a change in consumers' incomes 
C) a change in the seasons 
D) All of the above are correct.

Question 4

In addition to advising the president, one duty of the Council of Economic Advisers is to

Accepted Answer

A) prepare the federal budget. 
B) write government regulations. 
C) advise Congress on economic matters. 
D) write the annual Economic Report of the President. 
A) prepare the federal budget. 
B) write government regulations. 
C) advise Congress on economic matters. 
D) write the annual Economic Report of the President.

Question 5

Figure 2-22  
-Refer to Figure 2-22. What is the x-coordinate of point R?

Accepted Answer

The answer of Figure 2-22  
-Refer to Figure 2-22....

Question 6

In economics, capital refers to

Accepted Answer

A) the finances necessary for firms to produce their products. 
B) buildings and machines used in the production process. 
C) the money households use to purchase firms' output. 
D) stocks and bonds. 
A) the finances necessary for firms to produce their products. 
B) buildings and machines used in the production process. 
C) the money households use to purchase firms' output. 
D) stocks and bonds.

Question 7

A relatively steep demand curve indicates that

Accepted Answer

A) quantity demanded will adjust only slightly to a price change. 
B) quantity demanded will adjust significantly to a price change. 
C) quantity demanded will not adjust to a price change. 
D) the change in quantity demanded will exactly equal a change in price. 
A) quantity demanded will adjust only slightly to a price change. 
B) quantity demanded will adjust significantly to a price change. 
C) quantity demanded will not adjust to a price change. 
D) the change in quantity demanded will exactly equal a change in price.

Question 8

Production is efficient if the economy is producing at a point

Accepted Answer

A) on the production possibilities frontier. 
B) outside the production possibilities frontier. 
C) on or inside the production possibilities frontier. 
D) inside the production possibilities frontier. 
A) on the production possibilities frontier. 
B) outside the production possibilities frontier. 
C) on or inside the production possibilities frontier. 
D) inside the production possibilities frontier.

Question 9

The nation's antitrust laws are enforced by economists at the Department of

Accepted Answer

A) Labor. 
B) Health and Human Services. 
C) Justice. 
D) Treasury. 
A) Labor. 
B) Health and Human Services. 
C) Justice. 
D) Treasury.

Question 10

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. Which of the following could result in a movement from point B to point Z?

Accepted Answer

A) a change in the price of a restaurant meal 
B) a change in the number of restaurant meals demanded 
C) a change in income 
D) Both a and b are correct. 
A) a change in the price of a restaurant meal 
B) a change in the number of restaurant meals demanded 
C) a change in income 
D) Both a and b are correct.

Question 11

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of income payments?

Accepted Answer

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

Question 13

Normative statements are

Accepted Answer

A) not usually made by economists. 
B) claims about how the world should be. 
C) claims about how variables in the economy normally behave. 
D) pessimistic interpretations of the economy. 
A) not usually made by economists. 
B) claims about how the world should be. 
C) claims about how variables in the economy normally behave. 
D) pessimistic interpretations of the economy.

Question 14

Positive statements are

Accepted Answer

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

Question 15

Which of the following is not an example of a graph of a single variable?

Accepted Answer

A) a pie chart 
B) a bar graph 
C) a time-series graph 
D) a scatterplot 
A) a pie chart 
B) a bar graph 
C) a time-series graph 
D) a scatterplot

Question 16

Which of the following statements is (are) correct?

Accepted Answer

A) Relative to some other scientists, economists find it more difficult to conduct experiments. 
B) Theory and observation are important in economics as well as in other sciences. 
C) To obtain data, economists often rely upon the natural experiments offered by history. 
D) All of the above are correct. 
A) Relative to some other scientists, economists find it more difficult to conduct experiments. 
B) Theory and observation are important in economics as well as in other sciences. 
C) To obtain data, economists often rely upon the natural experiments offered by history. 
D) All of the above are correct.

Question 17

Economists at which administrative department help enforce the nation's antitrust laws?

Accepted Answer

Department

Question 18

Which of the following is not correct?

Accepted Answer

A) Evaluating statements about how the world should be involves values as well as facts. 
B) Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C) Normative statements can be judged using data alone. 
D) Deciding what is good or bad policy is not just a matter of science. 
A) Evaluating statements about how the world should be involves values as well as facts. 
B) Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C) Normative statements can be judged using data alone. 
D) Deciding what is good or bad policy is not just a matter of science.

Question 19

Figure 2-10
Panel (a)
Panel (b)    
-Refer to Figure 2-10, Panel (a) and Panel (b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a) to Panel (b)?

Accepted Answer

A) The tradeoff between the production of tractors and sofas changes. 
B) Production of 2 tractors and 10 sofas becomes efficient. 
C) Production of 6 tractors and 14 sofas becomes possible. 
D) The opportunity cost of a sofa is higher at all levels of sofa production. 
A) The tradeoff between the production of tractors and sofas changes. 
B) Production of 2 tractors and 10 sofas becomes efficient. 
C) Production of 6 tractors and 14 sofas becomes possible. 
D) The opportunity cost of a sofa is higher at all levels of sofa production.

Question 20

Figure 2-14  
-Refer to Figure 2-14. Point B represents an inefficient outcome for this economy.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

In constructing models, economists

Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Figure 2-21 -Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

In addition to advising the president, one duty of the Council of Economic Advisers is to

Figure 2-22 -Refer to Figure 2-22. What is the x-coordinate of point R?

In economics, capital refers to

A relatively steep demand curve indicates that

Production is efficient if the economy is producing at a point

The nation's antitrust laws are enforced by economists at the Department of

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. Which of the following could result in a movement from point B to point Z?

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of income payments?

Normative statements are

Positive statements are

Which of the following is not an example of a graph of a single variable?

Which of the following statements is (are) correct?

Economists at which administrative department help enforce the nation's antitrust laws?

Which of the following is not correct?

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) and Panel (b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a) to Panel (b)?

Figure 2-14 -Refer to Figure 2-14. Point B represents an inefficient outcome for this economy.

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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