Question 1

Suppose a nation is currently producing at a point inside its production possibilities frontier.We know that

Accepted Answer

A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good. 
A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good.

Question 2

Economists make assumptions in order to

Accepted Answer

A)  mimic the methodologies employed by other scientists. 
B)  minimize the number of experiments that yield no useful data. 
C)  minimize the likelihood that some aspect of the problem at hand is being overlooked. 
D)  focus their thinking on the essence of the problem at hand. 
A)  mimic the methodologies employed by other scientists. 
B)  minimize the number of experiments that yield no useful data. 
C)  minimize the likelihood that some aspect of the problem at hand is being overlooked. 
D)  focus their thinking on the essence of the problem at hand.

Question 3

In conducting their research,economists often substitute historical events and historical episodes for

Accepted Answer

A)  theories and observations. 
B)  laboratory experiments. 
C)  models. 
D)  assumptions. 
A)  theories and observations. 
B)  laboratory experiments. 
C)  models. 
D)  assumptions.

Question 4

Figure 2-14
  
-Refer to Figure 2-14.Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 5

John Maynard Keynes believed the ideas of economists to be

Accepted Answer

A)  generally incorrect. 
B)  powerful. 
C)  academic and without practical application. 
D)  rantings of madmen. 
A)  generally incorrect. 
B)  powerful. 
C)  academic and without practical application. 
D)  rantings of madmen.

Question 6

When two variables move in the same direction,the curve relating them is downward sloping,and we say the variables are negatively related.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-14
  
-Refer to Figure 2-14.The slope of the curve between points A and B is

Accepted Answer

A)  -5 
B)  -1/5 
C)  1/5 
D)  5 
A)  -5 
B)  -1/5 
C)  1/5 
D)  5

Question 8

In the circular-flow diagram,firms produce

Accepted Answer

A)  goods and services using factors of production. 
B)  output using inputs. 
C)  factors of production using goods and services. 
D)  Both (a) and (b) are correct. 
A)  goods and services using factors of production. 
B)  output using inputs. 
C)  factors of production using goods and services. 
D)  Both (a) and (b) are correct.

Question 9

The y-coordinate of an ordered pair specifies the

Accepted Answer

A)  diagonal location of the point. 
B)  vertical location of the point. 
C)  horizontal location of the point. 
D)  quadrant location in which the point is located. 
A)  diagonal location of the point. 
B)  vertical location of the point. 
C)  horizontal location of the point. 
D)  quadrant location in which the point is located.

Question 10

Figure 2-16
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service
  
-Refer to Figure 2-16.A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars.You warn the policymaker about making a reverse causality mistake with which of the following statements?

Accepted Answer

A)  Higher gas prices are causing more people to choose the commuter rail over driving. 
B)  The service frequency was increased in response to an increase in the number of passengers per hour. 
C)  There is a positive relationship between frequency of stops and number of passengers. 
D)  None of the above is correct. 
A)  Higher gas prices are causing more people to choose the commuter rail over driving. 
B)  The service frequency was increased in response to an increase in the number of passengers per hour. 
C)  There is a positive relationship between frequency of stops and number of passengers. 
D)  None of the above is correct.

Question 11

In conducting their research,economists face an obstacle that not all scientists face; specifically,in economics,it is often difficult and sometimes impossible to

Accepted Answer

A)  make use of theory and observation. 
B)  rely upon the scientific method. 
C)  conduct laboratory experiments. 
D)  find articles or books that were written before 1900. 
A)  make use of theory and observation. 
B)  rely upon the scientific method. 
C)  conduct laboratory experiments. 
D)  find articles or books that were written before 1900.

Question 12

Economic models

Accepted Answer

A)  are people who act out the behavior of firms and households so that economists can study this behavior. 
B)  are usually detailed replications of reality. 
C)  incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality. 
D)  are useful to researchers but not to teachers because economic models omit many details of the real-world economy. 
A)  are people who act out the behavior of firms and households so that economists can study this behavior. 
B)  are usually detailed replications of reality. 
C)  incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality. 
D)  are useful to researchers but not to teachers because economic models omit many details of the real-world economy.

Question 13

Figure 2-6
  
-Refer to Figure 2-6.Inefficient production is represented by which point(s)?

Accepted Answer

A)  A, B 
B)  C, D, F, G 
C)  C, F, G 
D)  D 
A)  A, B 
B)  C, D, F, G 
C)  C, F, G 
D)  D

Question 14

For economists,substitutes for laboratory experiments often come in the form of

Accepted Answer

A)  natural experiments offered by history. 
B)  untested theories. 
C)  "rules of thumb" and other such conveniences. 
D)  reliance upon the wisdom of elders in the economics profession. 
A)  natural experiments offered by history. 
B)  untested theories. 
C)  "rules of thumb" and other such conveniences. 
D)  reliance upon the wisdom of elders in the economics profession.

Question 15

Factors of production are

Accepted Answer

A)  used to produce goods and services. 
B)  also called output. 
C)  abundant in most economies. 
D)  assumed to be owned by firms in the circular-flow diagram. 
A)  used to produce goods and services. 
B)  also called output. 
C)  abundant in most economies. 
D)  assumed to be owned by firms in the circular-flow diagram.

Question 16

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

Accepted Answer

A)  the effect of an increase in the alcohol tax on the market for beer 
B)  the effect of foreign competition on the domestic auto industry 
C)  the effect of a price war in the airline industry 
D)  the effect of an increase in the minimum wage on an economy's overall rate of unemployment 
A)  the effect of an increase in the alcohol tax on the market for beer 
B)  the effect of foreign competition on the domestic auto industry 
C)  the effect of a price war in the airline industry 
D)  the effect of an increase in the minimum wage on an economy's overall rate of unemployment

Question 17

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)  a landowner leases land to a farmer 
B)  a farmer hires a teenager to help with harvest 
C)  a construction company rents trucks for its business 
D)  a woman buys corn for dinner 
A)  a landowner leases land to a farmer 
B)  a farmer hires a teenager to help with harvest 
C)  a construction company rents trucks for its business 
D)  a woman buys corn for dinner

Question 18

In order to display information on two variables,an economist must use

Accepted Answer

A)  a bar graph. 
B)  a pie chart. 
C)  the coordinate system. 
D)  a time-series graph. 
A)  a bar graph. 
B)  a pie chart. 
C)  the coordinate system. 
D)  a time-series graph.

Question 19

Economists,like mathematicians,physicists,and biologists,

Accepted Answer

A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct. 
A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct.

Question 20

The production possibilities frontier is used to illustrate some basic economic ideas,including

Accepted Answer

A)  scarcity. 
B)  opportunity cost. 
C)  economic growth. 
D)  All of the above are correct. 
A)  scarcity. 
B)  opportunity cost. 
C)  economic growth. 
D)  All of the above are correct.

Exam 2: Thinking Like an Economist.

Suppose a nation is currently producing at a point inside its production possibilities frontier.We know that

Economists make assumptions in order to

In conducting their research,economists often substitute historical events and historical episodes for

Figure 2-14 -Refer to Figure 2-14.Points B and C represent infeasible outcomes for this economy.

John Maynard Keynes believed the ideas of economists to be

When two variables move in the same direction,the curve relating them is downward sloping,and we say the variables are negatively related.

Figure 2-14 -Refer to Figure 2-14.The slope of the curve between points A and B is

In the circular-flow diagram,firms produce

The y-coordinate of an ordered pair specifies the

In conducting their research,economists face an obstacle that not all scientists face; specifically,in economics,it is often difficult and sometimes impossible to

Economic models

Figure 2-6 -Refer to Figure 2-6.Inefficient production is represented by which point(s)?

For economists,substitutes for laboratory experiments often come in the form of

Factors of production are

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

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

In order to display information on two variables,an economist must use

Economists,like mathematicians,physicists,and biologists,

The production possibilities frontier is used to illustrate some basic economic ideas,including

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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