Question 1

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Accepted Answer

A) True 
 B)False

Question 2

Positive statements are not

Accepted Answer

A)  descriptive. 
B)  prescriptive. 
C)  claims about how the world is. 
D)  made by economists speaking as scientists. 
A)  descriptive. 
B)  prescriptive. 
C)  claims about how the world is. 
D)  made by economists speaking as scientists.

Question 3

Historical episodes are

Accepted Answer

A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again. 
A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again.

Question 4

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 coffee from 350 pounds to 650 pounds?

Accepted Answer

A)  400 dozen cookies 
B)  300 dozen cookies 
C)  200 dozen cookies 
D)  200 pounds of coffee 
A)  400 dozen cookies 
B)  300 dozen cookies 
C)  200 dozen cookies 
D)  200 pounds of coffee

Question 5

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending 
A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending

Question 6

Figure 2-14
  
-Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 7

Table 2-5
  
-Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Which of the following statements is correct?

Accepted Answer

A)  The opportunity cost of a dozen cookies does not depend on how many pounds of coffee are being produced. 
B)  The opportunity cost of a dozen cookies increases as more cookies are produced. 
C)  The opportunity cost of a dozen cookies decreases as more cookies are produced. 
D)  The opportunity cost of a pound of coffee decreases as more coffee is produced. 
A)  The opportunity cost of a dozen cookies does not depend on how many pounds of coffee are being produced. 
B)  The opportunity cost of a dozen cookies increases as more cookies are produced. 
C)  The opportunity cost of a dozen cookies decreases as more cookies are produced. 
D)  The opportunity cost of a pound of coffee decreases as more coffee is produced.

Question 8

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements,including which of the following?

Accepted Answer

A)  Tariffs and import quotas usually reduce general economic welfare. 
B)  A large federal budget deficit has an adverse effect on the economy. 
C)  Minimum wage increases unemployment among young and unskilled workers. 
D)  All of the above are correct. 
A)  Tariffs and import quotas usually reduce general economic welfare. 
B)  A large federal budget deficit has an adverse effect on the economy. 
C)  Minimum wage increases unemployment among young and unskilled workers. 
D)  All of the above are correct.

Question 9

Figure 2-15
Relationship between Price and Cups of Coffee
  
-Refer to Figure 2-15.A movement from point A to point Z is called

Accepted Answer

A)  a shift in demand. 
B)  a movement along the demand curve. 
C)  a shift in supply. 
D)  a movement along the supply curve. 
A)  a shift in demand. 
B)  a movement along the demand curve. 
C)  a shift in supply. 
D)  a movement along the supply curve.

Question 10

Figure 2-4
  
-Refer to Figure 2-4.The opportunity cost of obtaining 10 additional lamps by moving from point W to point Z 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 Z. 
A)  0 notepads. 
B)  10 notepads. 
C)  50 notepads. 
D)  None of the above; the economy cannot move from point W to point Z.

Question 11

A model that shows how dollars flow through markets among households and firms is called the

Accepted Answer

A)  production possibilities frontier. 
B)  circular-flow diagram. 
C)  demand and supply diagram. 
D)  comparative advantage model. 
A)  production possibilities frontier. 
B)  circular-flow diagram. 
C)  demand and supply diagram. 
D)  comparative advantage model.

Question 12

Figure 2-9

-Refer to Figure 2-9,Panel (a).The opportunity cost of one computer is highest when the economy produces

Accepted Answer

A)  0 computers. 
B)  6 computers. 
C)  10 computers. 
D)  12 computers. 
A)  0 computers. 
B)  6 computers. 
C)  10 computers. 
D)  12 computers.

Question 13

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A)  less than 0. 
B)  between zero and 1. 
C)  between one and infinity. 
D)  undefined. 
A)  less than 0. 
B)  between zero and 1. 
C)  between one and infinity. 
D)  undefined.

Question 14

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

Accepted Answer

A)  revenue 
B)  land, labor, and capital 
C)  factors of production 
D)  profit 
A)  revenue 
B)  land, labor, and capital 
C)  factors of production 
D)  profit

Question 15

Which of the following statements is correct?

Accepted Answer

A)  Few economic models incorporate assumptions. 
B)  Different economic models employ different sets of assumptions. 
C)  Good economic models attempt to mimic reality as closely as possible. 
D)  Economic models, to be accepted, must be tested by conducting experiments. 
A)  Few economic models incorporate assumptions. 
B)  Different economic models employ different sets of assumptions. 
C)  Good economic models attempt to mimic reality as closely as possible. 
D)  Economic models, to be accepted, must be tested by conducting experiments.

Question 16

Unemployment would cause an economy to

Accepted Answer

A)  produce inside its production possibilities frontier. 
B)  produce on its production possibilities frontier. 
C)  produce outside its production possibilities frontier. 
D)  experience an inward shift of its production possibilities frontier. 
A)  produce inside its production possibilities frontier. 
B)  produce on its production possibilities frontier. 
C)  produce outside its production possibilities frontier. 
D)  experience an inward shift of its production possibilities frontier.

Question 17

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Accepted Answer

A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias. 
A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias.

Question 18

Almost all economists agree that rent control

Accepted Answer

A)  has no effect on the rental income of landlords. 
B)  allows the market for housing to work more efficiently. 
C)  adversely affects the availability and quality of housing. 
D)  is a very inexpensive way to help the most needy members of society. 
A)  has no effect on the rental income of landlords. 
B)  allows the market for housing to work more efficiently. 
C)  adversely affects the availability and quality of housing. 
D)  is a very inexpensive way to help the most needy members of society.

Question 19

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)  the respondents were almost equally divided on the propositions. 
B)  the respondents favored the propositions by a slight margin. 
C)  the respondents disagreed with the propositions by a slight margin. 
D)  there was overwhelming endorsement of the propositions among the respondents. 
A)  the respondents were almost equally divided on the propositions. 
B)  the respondents favored the propositions by a slight margin. 
C)  the respondents disagreed with the propositions by a slight margin. 
D)  there was overwhelming endorsement of the propositions among the respondents.

Question 20

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist.

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Positive statements are not

Historical episodes are

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 coffee from 350 pounds to 650 pounds?

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Table 2-5 -Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Which of the following statements is correct?

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements,including which of the following?

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15.A movement from point A to point Z is called

Figure 2-4 -Refer to Figure 2-4.The opportunity cost of obtaining 10 additional lamps by moving from point W to point Z is

A model that shows how dollars flow through markets among households and firms is called the

Figure 2-9 -Refer to Figure 2-9,Panel (a).The opportunity cost of one computer is highest when the economy produces

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

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

Which of the following statements is correct?

Unemployment would cause an economy to

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Almost all economists agree that rent control

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Two variables that have a negative correlation move in opposite directions.

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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