Question 1

Figure 2-8

-Refer to Figure 2-8,Panel (a).The movement from point M to point K could be caused by

Accepted Answer

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

Question 2

Figure 2-7
  
-Refer to Figure 2-7.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 3

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 4

A duty of economists at the Department of Labor is to

Accepted Answer

A)  analyze data on workers. 
B)  schedule federal holidays. 
C)  enforce the nation's antitrust laws. 
D)  All of the above are correct. 
A)  analyze data on workers. 
B)  schedule federal holidays. 
C)  enforce the nation's antitrust laws. 
D)  All of the above are correct.

Question 5

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 6

In the circular-flow diagram,

Accepted Answer

A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households. 
A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households.

Question 7

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 8

Production possibilities frontiers are usually bowed outward.This is because

Accepted Answer

A)  the more resources a society uses to produce one good, the fewer resources it has available to produce another good. 
B)  it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. 
C)  of the effects of technological change. 
D)  resources are specialized; that is, some are better at producing particular goods rather than other goods. 
A)  the more resources a society uses to produce one good, the fewer resources it has available to produce another good. 
B)  it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. 
C)  of the effects of technological change. 
D)  resources are specialized; that is, some are better at producing particular goods rather than other goods.

Question 9

In the simple circular-flow diagram,the participants in the economy are

Accepted Answer

A)  firms and government. 
B)  households and firms. 
C)  households and government. 
D)  households, firms, and government. 
A)  firms and government. 
B)  households and firms. 
C)  households and government. 
D)  households, firms, and government.

Question 10

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-12
  
-Refer to Figure 2-12.One difference between points A and B is that

Accepted Answer

A)  Point B is unattainable with current resources, but point A is attainable. 
B)  All resources are fully employed at point A but there is unemployment at point B. 
C)  More output can be produced at point A but no additional output can be produced at point B. 
D)  This economy produces more blankets at point B than at point A. 
A)  Point B is unattainable with current resources, but point A is attainable. 
B)  All resources are fully employed at point A but there is unemployment at point B. 
C)  More output can be produced at point A but no additional output can be produced at point B. 
D)  This economy produces more blankets at point B than at point A.

Question 12

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

Accepted Answer

A)  Inflation is more harmful to the economy than unemployment is. 
B)  If welfare payments increase, the world will be a better place. 
C)  Prices rise when the government prints too much money. 
D)  When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency. 
A)  Inflation is more harmful to the economy than unemployment is. 
B)  If welfare payments increase, the world will be a better place. 
C)  Prices rise when the government prints too much money. 
D)  When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.

Question 13

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 14

Economists usually have to make do with whatever data the world happens to give them.

Accepted Answer

A) True 
 B)False

Question 15

In addition to advising the president,one duty of the Council of Economic Advisors 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 16

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)  opinions and education. 
B)  opinions and values. 
C)  scientific judgments and education. 
D)  scientific judgments and values. 
A)  opinions and education. 
B)  opinions and values. 
C)  scientific judgments and education. 
D)  scientific judgments and values.

Question 17

The first number in any ordered pair is

Accepted Answer

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

Question 18

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 19

Which markets are represented in the simple circular-flow diagram?

Accepted Answer

A)  markets for goods and services and markets for financial assets 
B)  markets for factors of production and markets for financial assets 
C)  markets for goods and services and markets for factors of production 
D)  markets for goods and services and markets for imports and exports 
A)  markets for goods and services and markets for financial assets 
B)  markets for factors of production and markets for financial assets 
C)  markets for goods and services and markets for factors of production 
D)  markets for goods and services and markets for imports and exports

Question 20

A demand curve shows the relationship between price and

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded. 
A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded.

Exam 2: Thinking Like an Economist.

Figure 2-8 -Refer to Figure 2-8,Panel (a).The movement from point M to point K could be caused by

Figure 2-7 -Refer to Figure 2-7.Which point on the graph best represents the fact that,because resources are scarce,not every conceivable outcome is feasible?

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

A duty of economists at the Department of Labor is to

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

In the circular-flow diagram,

Positive statements are

Production possibilities frontiers are usually bowed outward.This is because

In the simple circular-flow diagram,the participants in the economy are

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Figure 2-12 -Refer to Figure 2-12.One difference between points A and B is that

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

Economists usually have to make do with whatever data the world happens to give them.

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

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

The first number in any ordered pair is

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Which markets are represented in the simple circular-flow diagram?

A demand curve shows the relationship between price and

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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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