Question 1

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

The field of economics is traditionally divided into two broad subfields,

Accepted Answer

A) national economics and international economics. 
B) consumer economics and producer economics. 
C) private sector economics and public sector economics. 
D) microeconomics and macroeconomics. 
A) national economics and international economics. 
B) consumer economics and producer economics. 
C) private sector economics and public sector economics. 
D) microeconomics and macroeconomics.

Question 5

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-21  
-Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Accepted Answer

A) omitted variable bias. 
B) reverse causality. 
C) slope mismatch. 
D) shifting versus moving along a curve. 
A) omitted variable bias. 
B) reverse causality. 
C) slope mismatch. 
D) shifting versus moving along a curve.

Question 7

Studying which of the following is helpful in learning to think like an economist​?

Accepted Answer

A) ​theory. 
B) ​case studies. 
C) examples of economics in the news. 
D) ​all of the above. 
A) ​theory. 
B) ​case studies. 
C) examples of economics in the news. 
D) ​all of the above.

Question 8

Efficiency is illustrated by

Accepted Answer

A) both the production possibilities frontier and the circular-flow diagram. 
B) neither the production possibilities frontier nor the circular-flow diagram. 
C) the production possibilities frontier only. 
D) the circular-flow diagram only. 
A) both the production possibilities frontier and the circular-flow diagram. 
B) neither the production possibilities frontier nor the circular-flow diagram. 
C) the production possibilities frontier only. 
D) the circular-flow diagram only.

Question 9

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 10

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

Accepted Answer

A) increases as more of the good is produced. 
B) decreases as more of the good is produced. 
C) does not change as more of the good is produced. 
D) may increase, decrease, or not change as more of the good is produced. 
A) increases as more of the good is produced. 
B) decreases as more of the good is produced. 
C) does not change as more of the good is produced. 
D) may increase, decrease, or not change as more of the good is produced.

Question 11

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

Accepted Answer

A) 120 pillows. 
B) 120 blankets. 
C) 120 blankets and 120 pillows. 
D) 200 blankets. 
A) 120 pillows. 
B) 120 blankets. 
C) 120 blankets and 120 pillows. 
D) 200 blankets.

Question 12

In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services?

Accepted Answer

A) goods and services 
B) dollars paid to land, labor, and capital 
C) dollars spent on goods and services 
D) wages, rent, and profit 
A) goods and services 
B) dollars paid to land, labor, and capital 
C) dollars spent on goods and services 
D) wages, rent, and profit

Question 13

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 14

Economists believe that production possibilities frontiers

Accepted Answer

A) never have a bowed shape. 
B) rarely have a bowed shape. 
C) often have a bowed shape. 
D) always have a bowed shape. 
A) never have a bowed shape. 
B) rarely have a bowed shape. 
C) often have a bowed shape. 
D) always have a bowed shape.

Question 15

The slope of a steep upward-sloping line will be a

Accepted Answer

A) small positive number. 
B) large positive number. 
C) small negative number. 
D) large negative number. 
A) small positive number. 
B) large positive number. 
C) small negative number. 
D) large negative number.

Question 16

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Accepted Answer

A) bowed outward indicating increasing opportunity costs. 
B) bowed outward indicating decreasing opportunity costs. 
C) a straight line indicating constant opportunity costs. 
D) bowed inward indicating increasing opportunity costs. 
A) bowed outward indicating increasing opportunity costs. 
B) bowed outward indicating decreasing opportunity costs. 
C) a straight line indicating constant opportunity costs. 
D) bowed inward indicating increasing opportunity costs.

Question 17

Examples of graphs of a single variable include pie charts, bar graphs, and time-series graphs.

Accepted Answer

A) True 
 B)False

Question 18

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-5  
-Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Accepted Answer

A) 0 dryers and 100 washers. 
B) 60 dryers and 50 washers. 
C) 80 dryers and 0 washers. 
D) 80 dryers and 50 washers. 
A) 0 dryers and 100 washers. 
B) 60 dryers and 50 washers. 
C) 80 dryers and 0 washers. 
D) 80 dryers and 50 washers.

Question 20

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Which of the following statements is (are) 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)?

The field of economics is traditionally divided into two broad subfields,

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Figure 2-21 -Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Studying which of the following is helpful in learning to think like an economist​?

Efficiency is illustrated by

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

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

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

In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services?

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Economists believe that production possibilities frontiers

The slope of a steep upward-sloping line will be a

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Examples of graphs of a single variable include pie charts, bar graphs, and time-series graphs.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Figure 2-5 -Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Economists try to address their subject with a scientist's objectivity.

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Studying which of the following is helpful in learning to think like an economist?