Question 1

The slope of a line passing through the points (15, 3) and (10, 6) is

Accepted Answer

A) -3/5. 
B) 3/5. 
C) -5/3. 
D) 5/3. 
A) -3/5. 
B) 3/5. 
C) -5/3. 
D) 5/3.

Question 2

The duties of the Council of Economic Advisers are to advise the president of the United States and to determine U.S. monetary policy.

Accepted Answer

A) True 
 B)False

Question 3

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 4

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A) households provide firms with savings for investment. 
B) households provide firms with labor, land, and capital. 
C) firms provide households with output. 
D) firms provide households with profit. 
A) households provide firms with savings for investment. 
B) households provide firms with labor, land, and capital. 
C) firms provide households with output. 
D) firms provide households with profit.

Question 5

Figure 2-11  
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A) simultaneous technological advances in the book and DVD industries. 
B) a reallocation of resources away from the production of DVDs and toward the production of books. 
C) economic growth. 
D) All of the above are correct. 
A) simultaneous technological advances in the book and DVD industries. 
B) a reallocation of resources away from the production of DVDs and toward the production of books. 
C) economic growth. 
D) All of the above are correct.

Question 6

Figure 2-22  
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively

Question 7

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

Accepted Answer

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

Question 8

In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A) omitted variables. 
B) reverse causality. 
C) government propaganda. 
D) medical incompetence. 
A) omitted variables. 
B) reverse causality. 
C) government propaganda. 
D) medical incompetence.

Question 9

For an economist, the idea of making assumptions is regarded generally as a

Accepted Answer

A) bad idea, since doing so leads to the omission of important ideas and variables from economic models. 
B) bad idea, since doing so invariably leads to data-collection problems. 
C) good idea, since doing so helps to simplify the complex world and make it easier to understand. 
D) good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand. 
A) bad idea, since doing so leads to the omission of important ideas and variables from economic models. 
B) bad idea, since doing so invariably leads to data-collection problems. 
C) good idea, since doing so helps to simplify the complex world and make it easier to understand. 
D) good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand.

Question 10

Which of the following is not something that John Maynard Keynes ​used to describe an economist?

Accepted Answer

A) ​He must be a mathematician, historian, statesman, and philosopher in some degree. 
B) ​He must understand symbols and speak in words. 
C) ​He must only contemplate in abstract and general terms. 
D) ​He must study the present in light of the past for purposes of the future. 
A) ​He must be a mathematician, historian, statesman, and philosopher in some degree. 
B) ​He must understand symbols and speak in words. 
C) ​He must only contemplate in abstract and general terms. 
D) ​He must study the present in light of the past for purposes of the future.

Question 11

Figure 2-8  
-Refer to Figure 2-8. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Accepted Answer

A) point J 
B) point K 
C) point L 
D) point M 
A) point J 
B) point K 
C) point L 
D) point M

Question 12

Figure 2-9
Panel (a)
Panel (b)    
-Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point J to point L is

Accepted Answer

A) 2 donuts. 
B) 2 donuts and 2 cups of coffee. 
C) 2 cups of coffee. 
D) 6 cups of coffee. 
A) 2 donuts. 
B) 2 donuts and 2 cups of coffee. 
C) 2 cups of coffee. 
D) 6 cups of coffee.

Question 13

Which of the following statements about economic models is correct?

Accepted Answer

A) Economic models are built to mirror reality exactly. 
B) Economic models are useful, but they should not be used for the purpose of improving public policies. 
C) Because economic models omit many details, they allow us to see what is truly important. 
D) Economic models seldom incorporate equations or diagrams. 
A) Economic models are built to mirror reality exactly. 
B) Economic models are useful, but they should not be used for the purpose of improving public policies. 
C) Because economic models omit many details, they allow us to see what is truly important. 
D) Economic models seldom incorporate equations or diagrams.

Question 14

An economy's production of two goods is efficient if

Accepted Answer

A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero. 
A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero.

Question 15

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Accepted Answer

The answer of Figure 2-15  
-Refer to Figure 2-15....

Question 17

Figure 2-12  
-Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

Accepted Answer

A) a downturn in the economy. 
B) economic growth. 
C) an enhancement of equality. 
D) an improvement in the allocation of resources. 
A) a downturn in the economy. 
B) economic growth. 
C) an enhancement of equality. 
D) an improvement in the allocation of resources.

Question 18

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) The discount rate is the interest rate the Federal Reserve charges banks to borrow funds. 
B) The US income tax rate increases with the amount of income earned. 
C) The government should increase the tax on gasoline. 
D) The US unemployment rate increased to 10 percent in 2009. 
A) The discount rate is the interest rate the Federal Reserve charges banks to borrow funds. 
B) The US income tax rate increases with the amount of income earned. 
C) The government should increase the tax on gasoline. 
D) The US unemployment rate increased to 10 percent in 2009.

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

The slope of a line passing through the points (15, 3) and (10, 6) is

The duties of the Council of Economic Advisers are to advise the president of the United States and to determine U.S. monetary policy.

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

In the markets for goods and services in the circular-flow diagram,

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

For an economist, the idea of making assumptions is regarded generally as a

Which of the following is not something that John Maynard Keynes ​used to describe an economist?

Figure 2-8 -Refer to Figure 2-8. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point J to point L is

Which of the following statements about economic models is correct?

An economy's production of two goods is efficient if

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Figure 2-12 -Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

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

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

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

Which of the following is not something that John Maynard Keynes used to describe an economist?