Question 1

The scientific method is applicable to studying

Accepted Answer

A)  natural sciences, but not social sciences. 
B)  social sciences, but not natural sciences. 
C)  both natural sciences and social sciences. 
D)  None of the above is correct. 
A)  natural sciences, but not social sciences. 
B)  social sciences, but not natural sciences. 
C)  both natural sciences and social sciences. 
D)  None of the above is correct.

Question 2

Figure 2-6
  
-Refer to Figure 2-6.What is the opportunity cost of moving from point A to point B?

Accepted Answer

A)  zero 
B)  6 clocks 
C)  6 clocks and 15 candles 
D)  15 candles 
A)  zero 
B)  6 clocks 
C)  6 clocks and 15 candles 
D)  15 candles

Question 3

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A)  enforce the nation's antitrust laws. 
B)  set the nation's monetary policy. 
C)  provide evidence that incumbent members of Congress are performing well in their jobs. 
D)  provide independent evaluations of policy proposals. 
A)  enforce the nation's antitrust laws. 
B)  set the nation's monetary policy. 
C)  provide evidence that incumbent members of Congress are performing well in their jobs. 
D)  provide independent evaluations of policy proposals.

Question 4

In the circular-flow diagram,which of the following items does not flow from firms to households?

Accepted Answer

A)  goods 
B)  services 
C)  capital 
D)  profit 
A)  goods 
B)  services 
C)  capital 
D)  profit

Question 5

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

Accepted Answer

A)  contradiction in economic theory. 
B)  positive economic statement. 
C)  negative economic statement. 
D)  normative economic statement. 
A)  contradiction in economic theory. 
B)  positive economic statement. 
C)  negative economic statement. 
D)  normative economic statement.

Question 6

The slope of a fairly flat 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 7

Figure 2-5
  
-Refer to Figure 2-5.The opportunity cost of this economy moving from point A to point C is

Accepted Answer

A)  75 soccer balls. 
B)  125 soccer balls. 
C)  125 soccer balls and 240 sweaters. 
D)  240 sweaters. 
A)  75 soccer balls. 
B)  125 soccer balls. 
C)  125 soccer balls and 240 sweaters. 
D)  240 sweaters.

Question 8

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Accepted Answer

A) True 
 B)False

Question 9

For economists,historical episodes

Accepted Answer

A)  are not worthy of study because they offer few insights into current economic events and problems. 
B)  are not worthy of study because laboratory experiments provide more reliable data. 
C)  are worthy of study because economists rely entirely on observation, rather than on theory. 
D)  are worthy of study because they serve as valuable substitutes for laboratory experiments. 
A)  are not worthy of study because they offer few insights into current economic events and problems. 
B)  are not worthy of study because laboratory experiments provide more reliable data. 
C)  are worthy of study because economists rely entirely on observation, rather than on theory. 
D)  are worthy of study because they serve as valuable substitutes for laboratory experiments.

Question 10

Different values are not a reason for disagreement among economists.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Figure 2-4
  
-Refer to Figure 2-4.The opportunity cost of obtaining 20 additional lamps by moving from point W to point V is

Accepted Answer

A)  0 notepads. 
B)  10 notepads. 
C)  50 notepads. 
D)  None of the above; the economy cannot move from point W to point V. 
A)  0 notepads. 
B)  10 notepads. 
C)  50 notepads. 
D)  None of the above; the economy cannot move from point W to point V.

Question 13

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Accepted Answer

A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology. 
A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology.

Question 14

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 15

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-11
  
-Refer to Figure 2-11.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 17

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 18

Two variables that have a positive correlation move in the same direction.

Accepted Answer

A) True 
 B)False

Question 19

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

Question 20

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist.

The scientific method is applicable to studying

Figure 2-6 -Refer to Figure 2-6.What is the opportunity cost of moving from point A to point B?

Congress relies on economists at the Congressional Budget Office to

In the circular-flow diagram,which of the following items does not flow from firms to households?

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

The slope of a fairly flat upward-sloping line will be a

Figure 2-5 -Refer to Figure 2-5.The opportunity cost of this economy moving from point A to point C is

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

For economists,historical episodes

Different values are not a reason for disagreement among economists.

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 2-4 -Refer to Figure 2-4.The opportunity cost of obtaining 20 additional lamps by moving from point W to point V is

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Figure 2-11 -Refer to Figure 2-11.The shift of the production possibilities frontier from A to B can best be described as

Which of the following statements about economic models is correct?

Two variables that have a positive correlation move in the same direction.

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.

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

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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