Question 1

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A) One economist believes everyone should pay the same percentage of their income in taxes; another economist believes that wealthier citizens should pay a higher percentage of their income in taxes. 
B) One economist believes that manufacturing firms should face greater regulation to preserve the environment; another economist believes the government should not intervene in free markets. 
C) One economist believes that equality should be valued over efficiency in policy decisions; another economist believes that efficiency should be valued over equality in policy decisions. 
D) One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption. 
A) One economist believes everyone should pay the same percentage of their income in taxes; another economist believes that wealthier citizens should pay a higher percentage of their income in taxes. 
B) One economist believes that manufacturing firms should face greater regulation to preserve the environment; another economist believes the government should not intervene in free markets. 
C) One economist believes that equality should be valued over efficiency in policy decisions; another economist believes that efficiency should be valued over equality in policy decisions. 
D) One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption.

Question 2

Figure 2-3  
-Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

Accepted Answer

The answer of Figure 2-3  
-Refer to Figure 2-3....

Question 3

Which of the following is not correct?

Accepted Answer

A) Economists use some familiar words in specialized ways. 
B) Economics has its own language and its own way of thinking, but few other fields of study do. 
C) Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D) The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live. 
A) Economists use some familiar words in specialized ways. 
B) Economics has its own language and its own way of thinking, but few other fields of study do. 
C) Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D) The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.

Question 4

When two variables have a negative correlation,

Accepted Answer

A) they tend to move in opposite directions. 
B) they tend to move in the same direction. 
C) one variable will move while the other remains constant. 
D) the variables' values are never positive. 
A) they tend to move in opposite directions. 
B) they tend to move in the same direction. 
C) one variable will move while the other remains constant. 
D) the variables' values are never positive.

Question 5

Most economists agree that a large federal budget deficit has what type of effect on the economy?

Accepted Answer

The answer of Most economists agree that a large federal...

Question 6

The slope of a line is equal to

Accepted Answer

A) rise divided by run. 
B) run divided by rise. 
C) rise minus run. 
D) rise plus run. 
A) rise divided by run. 
B) run divided by rise. 
C) rise minus run. 
D) rise plus run.

Question 7

Figure 2-2  
-Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

Accepted Answer

A) households are represented by Box A. 
B) firms are represented by Box C. 
C) firms are represented by Box A. 
D) firms are sellers in Box B. 
A) households are represented by Box A. 
B) firms are represented by Box C. 
C) firms are represented by Box A. 
D) firms are sellers in Box B.

Question 8

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 9

You know an economist has crossed the line from scientist to policy adviser when he or she

Accepted Answer

A) claims that the problem at hand is widely misunderstood by non-economists. 
B) talks about the evidence. 
C) makes normative statements. 
D) makes a claim about how the world is. 
A) claims that the problem at hand is widely misunderstood by non-economists. 
B) talks about the evidence. 
C) makes normative statements. 
D) makes a claim about how the world is.

Question 10

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A) efficiency 
B) opportunity cost 
C) equality 
D) trade-offs 
A) efficiency 
B) opportunity cost 
C) equality 
D) trade-offs

Question 11

Among economic models, the circular-flow diagram is unusual in that it

Accepted Answer

A) drastically simplifies the real world. 
B) features more than one type of market. 
C) features flows of dollars. 
D) does not involve mathematics. 
A) drastically simplifies the real world. 
B) features more than one type of market. 
C) features flows of dollars. 
D) does not involve mathematics.

Question 12

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 13

Figure 2-16  
-Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Accepted Answer

A) The less coffee a person drinks per day, the more time he can go without sleep. 
B) There is no relationship between how much coffee per day a person drinks and how long he can go without sleep. 
C) The more coffee a person drinks per day, the more time he can go without sleep. 
D) The more coffee a person drinks per day, the less time he can go without sleep. 
A) The less coffee a person drinks per day, the more time he can go without sleep. 
B) There is no relationship between how much coffee per day a person drinks and how long he can go without sleep. 
C) The more coffee a person drinks per day, the more time he can go without sleep. 
D) The more coffee a person drinks per day, the less time he can go without sleep.

Question 14

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Accepted Answer

A) economists have not yet convinced the general public that the policies are undesirable. 
B) economists engage in positive analysis, not normative analysis. 
C) economists have values that are different from the values of most non-economists. 
D) economists' theories are not easily confirmed or refuted in laboratory analysis. 
A) economists have not yet convinced the general public that the policies are undesirable. 
B) economists engage in positive analysis, not normative analysis. 
C) economists have values that are different from the values of most non-economists. 
D) economists' theories are not easily confirmed or refuted in laboratory analysis.

Question 15

Which of the following is not an example of a positive, as opposed to normative, statement?

Accepted Answer

A) Higher gasoline prices will reduce gasoline consumption. 
B) Equality is more important than efficiency. 
C) Trade restrictions lower our standard of living. 
D) If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money. 
A) Higher gasoline prices will reduce gasoline consumption. 
B) Equality is more important than efficiency. 
C) Trade restrictions lower our standard of living. 
D) If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money.

Question 16

Economists, like mathematicians, physicists, and biologists,

Accepted Answer

A) make use of the scientific method. 
B) try to address their subject with a scientist's objectivity. 
C) devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D) All of the above are correct. 
A) make use of the scientific method. 
B) try to address their subject with a scientist's objectivity. 
C) devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D) All of the above are correct.

Question 17

Figure 2-16​  
-Refer to Figure 2-16. Efficient production is represented by which point(s)?

Accepted Answer

A) B, D, E 
B) D 
C) C, B 
D) A, C 
A) B, D, E 
B) D 
C) C, B 
D) A, C

Question 18

Table 2-2
The following table contains some production possibilities for an economy for a given year:  
-Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A) 6000. 
B) 5500. 
C) 5000. 
D) 4500. 
A) 6000. 
B) 5500. 
C) 5000. 
D) 4500.

Question 19

The x-coordinate is the

Accepted Answer

A) first number of an ordered pair and represents the point's horizontal location. 
B) second number of an ordered pair and represents the point's horizontal location. 
C) first number of an ordered pair and represents the point's vertical location. 
D) second number of an ordered pair and represents the point's vertical location. 
A) first number of an ordered pair and represents the point's horizontal location. 
B) second number of an ordered pair and represents the point's horizontal location. 
C) first number of an ordered pair and represents the point's vertical location. 
D) second number of an ordered pair and represents the point's vertical location.

Question 20

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Figure 2-3 -Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

Which of the following is not correct?

When two variables have a negative correlation,

Most economists agree that a large federal budget deficit has what type of effect on the economy?

The slope of a line is equal to

Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

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

You know an economist has crossed the line from scientist to policy adviser when he or she

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Among economic models, the circular-flow diagram is unusual in that it

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?

Figure 2-16 -Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Which of the following is not an example of a positive, as opposed to normative, statement?

Economists, like mathematicians, physicists, and biologists,

Figure 2-16​ -Refer to Figure 2-16. Efficient production is represented by which point(s)?

Table 2-2 The following table contains some production possibilities for an economy for a given year: -Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

The x-coordinate is the

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

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

Figure 2-16 -Refer to Figure 2-16. Efficient production is represented by which point(s)?