Question 1

The design of tax policy is one of the responsibilities of economists who work at the

Accepted Answer

A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 2

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 3

When two variables move in opposite directions,the curve relating them is upward sloping,and we say the variables are positively related.

Accepted Answer

A) True 
 B)False

Question 4

Economists at the U.S.Department of the Treasury help design U.S.coins and paper money.

Accepted Answer

A) True 
 B)False

Question 5

When an economist evaluates a positive statement,he or she is primarily

Accepted Answer

A)  examining evidence. 
B)  evaluating values as well as facts. 
C)  acting as a policy adviser. 
D)  concerned with making a sound decision on how the world ought to be. 
A)  examining evidence. 
B)  evaluating values as well as facts. 
C)  acting as a policy adviser. 
D)  concerned with making a sound decision on how the world ought to be.

Question 6

For economists,conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 7

In the circular-flow diagram,factors of production are the goods and services produced by firms.

Accepted Answer

A) True 
 B)False

Question 8

Microeconomics is the study of

Accepted Answer

A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works. 
A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works.

Question 9

It is possible for an economy to increase its production of both goods if the economy

Accepted Answer

A)  moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. 
B)  moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. 
C)  moves in either direction along its production possibilities frontier and the frontier is a straight line. 
D)  moves from a situation of inefficient production to a situation of efficient production. 
A)  moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. 
B)  moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. 
C)  moves in either direction along its production possibilities frontier and the frontier is a straight line. 
D)  moves from a situation of inefficient production to a situation of efficient production.

Question 10

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 11

The scientific method is the dispassionate development and testing of theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 12

When two variables have a positive 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 negative. 
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 negative.

Question 13

Figure 2-4
  
-Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

Accepted Answer

A)  0 notepads and 40 lamps. 
B)  35 notepads and 20 lamps. 
C)  70 notepads and 0 lamps. 
D)  70 notepads and 40 lamps. 
A)  0 notepads and 40 lamps. 
B)  35 notepads and 20 lamps. 
C)  70 notepads and 0 lamps. 
D)  70 notepads and 40 lamps.

Question 14

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)  should produce. 
B)  wants to produce. 
C)  can produce. 
D)  demands. 
A)  should produce. 
B)  wants to produce. 
C)  can produce. 
D)  demands.

Question 15

A demand curve shows the relationship

Accepted Answer

A)  between income and quantity demanded. 
B)  between price and income. 
C)  between price and quantity demanded. 
D)  among income, price, and quantity demanded. 
A)  between income and quantity demanded. 
B)  between price and income. 
C)  between price and quantity demanded. 
D)  among income, price, and quantity demanded.

Question 16

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 17

According to economist John Maynard Keynes,a great economist must also be a(n)

Accepted Answer

A)  mathematician. 
B)  historian. 
C)  philosopher. 
D)  All of the above are correct. 
A)  mathematician. 
B)  historian. 
C)  philosopher. 
D)  All of the above are correct.

Question 18

Which of the following statements applies to economics,as well as to other sciences such as physics?

Accepted Answer

A)  Experiments are considered valid only when they are conducted in a laboratory. 
B)  Good theories do not need to be tested. 
C)  Real-world observations often lead to theories. 
D)  Economics, as well as other sciences, is concerned primarily with abstract concepts. 
A)  Experiments are considered valid only when they are conducted in a laboratory. 
B)  Good theories do not need to be tested. 
C)  Real-world observations often lead to theories. 
D)  Economics, as well as other sciences, is concerned primarily with abstract concepts.

Question 19

The opportunity cost of something is what you give up to get it.

Accepted Answer

A) True 
 B)False

Question 20

In the circular-flow diagram,which of the following items flows from firms to households through the markets for the factors of production?

Accepted Answer

A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit 
A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit

Exam 2: Thinking Like an Economist.

The design of tax policy is one of the responsibilities of economists who work at the

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

When two variables move in opposite directions,the curve relating them is upward sloping,and we say the variables are positively related.

Economists at the U.S.Department of the Treasury help design U.S.coins and paper money.

When an economist evaluates a positive statement,he or she is primarily

For economists,conducting experiments is often difficult and sometimes impossible.

In the circular-flow diagram,factors of production are the goods and services produced by firms.

Microeconomics is the study of

It is possible for an economy to increase its production of both goods if the economy

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

The scientific method is the dispassionate development and testing of theories about how the world works.

When two variables have a positive correlation,

Figure 2-4 -Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

The production possibilities frontier is a graph that shows the various combinations of output that an economy

A demand curve shows the relationship

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

According to economist John Maynard Keynes,a great economist must also be a(n)

Which of the following statements applies to economics,as well as to other sciences such as physics?

The opportunity cost of something is what you give up to get it.

In the circular-flow diagram,which of the following items flows from firms to households through the markets for the factors of production?

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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