Question 1

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Accepted Answer

A) the Federal Reserve 
B) the Congressional Budget Office 
C) the Department of the Treasury 
D) the Department of Commerce 
A) the Federal Reserve 
B) the Congressional Budget Office 
C) the Department of the Treasury 
D) the Department of Commerce

Question 2

Figure 2-14  
-Refer to Figure 2-14. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Accepted Answer

A) True 
 B)False

Question 3

Which types of models are built with assumptions?

Accepted Answer

A) economic models, but not models in other disciplines such as physics and biology 
B) economic models as well as models in other disciplines such as physics and biology 
C) models that are built for teaching purposes but not for research purposes 
D) bad models 
A) economic models, but not models in other disciplines such as physics and biology 
B) economic models as well as models in other disciplines such as physics and biology 
C) models that are built for teaching purposes but not for research purposes 
D) bad models

Question 4

In the simple circular-flow diagram, households

Accepted Answer

A) are the only decision makers. 
B) own the factors of production. 
C) are buyers of inputs. 
D) consume only some of the goods and services that firms produce. 
A) are the only decision makers. 
B) own the factors of production. 
C) are buyers of inputs. 
D) consume only some of the goods and services that firms produce.

Question 5

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 6

In principle, we can

Accepted Answer

A) ignore positive statements when choosing among various public policy alternatives. 
B) ignore normative statements when choosing among various public policy alternatives. 
C) confirm or refute positive statements by examining evidence. 
D) confirm or refute normative statements by examining evidence. 
A) ignore positive statements when choosing among various public policy alternatives. 
B) ignore normative statements when choosing among various public policy alternatives. 
C) confirm or refute positive statements by examining evidence. 
D) confirm or refute normative statements by examining evidence.

Question 7

Economists face an obstacle that many other scientists do not face. What is that obstacle?

Accepted Answer

A) It is often difficult to formulate theories in economics. 
B) It is often impractical to perform experiments in economics. 
C) Economics cannot be addressed objectively; it must be addressed subjectively. 
D) The scientific method cannot be applied to the study of economics. 
A) It is often difficult to formulate theories in economics. 
B) It is often impractical to perform experiments in economics. 
C) Economics cannot be addressed objectively; it must be addressed subjectively. 
D) The scientific method cannot be applied to the study of economics.

Question 8

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following steps does an economist take when studying the economy?

Accepted Answer

A) devise theories 
B) collect data 
C) analyze data 
D) All of the above are correct. 
A) devise theories 
B) collect data 
C) analyze data 
D) All of the above are correct.

Question 10

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 R to point Q?

Accepted Answer

80 bushels

Question 11

Figure 2-10
Panel (a)
Panel (b)    
-Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by

Accepted Answer

A) economic growth. 
B) unemployment. 
C) an improvement in efficiency. 
D) an advance in production technology. 
A) economic growth. 
B) unemployment. 
C) an improvement in efficiency. 
D) an advance in production technology.

Question 12

The second number in any ordered pair is

Accepted Answer

A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope. 
A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope.

Question 13

Figure 2-22  
-Refer to Figure 2-22. What are the coordinates of point C?

Accepted Answer

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

Question 14

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Accepted Answer

A) 200 bushels of wheat 
B) 400 bushels of wheat 
C) 600 bushels of wheat 
D) 800 bushels of wheat 
A) 200 bushels of wheat 
B) 400 bushels of wheat 
C) 600 bushels of wheat 
D) 800 bushels of wheat

Question 15

Figure 2-16​  
-Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

Accepted Answer

A) 0 widgets. 
B) 10 widgets. 
C) 20 widgets. 
D) 30 widgets. 
A) 0 widgets. 
B) 10 widgets. 
C) 20 widgets. 
D) 30 widgets.

Question 16

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 17

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 18

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A) Universal health care would be good for U.S. citizens. 
B) An increase in the cigarette tax would cause a decrease in the number of smokers. 
C) A decrease in the minimum wage would decrease unemployment. 
D) A law requiring the federal government to balance its budget would increase economic growth. 
A) Universal health care would be good for U.S. citizens. 
B) An increase in the cigarette tax would cause a decrease in the number of smokers. 
C) A decrease in the minimum wage would decrease unemployment. 
D) A law requiring the federal government to balance its budget would increase economic growth.

Question 19

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 A to point B?

Accepted Answer

A) a change in income 
B) a change in the cost of producing a restaurant meal 
C) a change in the price of restaurant meals 
D) a change in the price of movies 
A) a change in income 
B) a change in the cost of producing a restaurant meal 
C) a change in the price of restaurant meals 
D) a change in the price of movies

Question 20

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Figure 2-14 -Refer to Figure 2-14. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Which types of models are built with assumptions?

In the simple circular-flow diagram, households

Normative statements describe how the world is, while positive statements prescribe how the world should be.

In principle, we can

Economists face an obstacle that many other scientists do not face. What is that obstacle?

Assumptions can simplify the complex world and make it easier to understand.

Which of the following steps does an economist take when studying the economy?

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 R to point Q?

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by

The second number in any ordered pair is

Figure 2-22 -Refer to Figure 2-22. What are the coordinates of point C?

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

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.

Normative statements are

Which of the following is an example of a normative, as opposed to positive, statement?

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 A to point B?

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

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. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is