Question 1

Figure 2-3
  
-Refer to Figure 2-3.This economy cannot produce at which point(s)?

Accepted Answer

A)  J 
B)  J, L 
C)  J, L, M 
D)  L 
A)  J 
B)  J, L 
C)  J, L, M 
D)  L

Question 2

A macroeconomist - as opposed to a microeconomist - might study

Accepted Answer

A)  the effect of agricultural price support programs on the cotton industry 
B)  the effect on U.S. steel producers of an import quota imposed on foreign steel 
C)  the effect of an increasing inflation rate on national living standards 
D)  the effect of an increase in the price of imported coffee beans on the U.S. coffee industry 
A)  the effect of agricultural price support programs on the cotton industry 
B)  the effect on U.S. steel producers of an import quota imposed on foreign steel 
C)  the effect of an increasing inflation rate on national living standards 
D)  the effect of an increase in the price of imported coffee beans on the U.S. coffee industry

Question 3

Which of the following is not correct?

Accepted Answer

A)  When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words. 
B)  Graphs are one way of expressing the relationships among variables. 
C)  When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects. 
D)  When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns. 
A)  When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words. 
B)  Graphs are one way of expressing the relationships among variables. 
C)  When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects. 
D)  When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns.

Question 4

Economists make use of assumptions,some of which are unrealistic,for the purpose of

Accepted Answer

A)  teaching economics to people who have never before studied economics. 
B)  advancing their political agendas. 
C)  developing models when the scientific method cannot be used. 
D)  focusing their thinking. 
A)  teaching economics to people who have never before studied economics. 
B)  advancing their political agendas. 
C)  developing models when the scientific method cannot be used. 
D)  focusing their thinking.

Question 5

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

Accepted Answer

A)  Income tax rates should not have been cut as they were a few years ago. 
B)  The quantity of money has grown too slowly in recent years. 
C)  When the quantity of money grows rapidly, inflation is a predictable consequence. 
D)  All of the above are positive statements. 
A)  Income tax rates should not have been cut as they were a few years ago. 
B)  The quantity of money has grown too slowly in recent years. 
C)  When the quantity of money grows rapidly, inflation is a predictable consequence. 
D)  All of the above are positive statements.

Question 6

Figure 2-7
  
-Refer to Figure 2-7.Efficient production is represented by which point(s)?

Accepted Answer

A)  J 
B)  J, K 
C)  J, K, L 
D)  J, K, M 
A)  J 
B)  J, K 
C)  J, K, L 
D)  J, K, M

Question 7

Figure 2-12
  
-Refer to Figure 2-12.Which of the following combinations of points are both efficient and attainable for this economy?

Accepted Answer

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

Question 8

Figure 2-13
  
-Refer to Figure 2-13.Cups of coffee per day and the hours that someone can go without sleep appear to have

Accepted Answer

A)  a positive correlation. 
B)  a negative correlation. 
C)  a random correlation. 
D)  no correlation. 
A)  a positive correlation. 
B)  a negative correlation. 
C)  a random correlation. 
D)  no correlation.

Question 9

Which of the following is a correct statement about production possibilities frontiers?

Accepted Answer

A)  An economy can produce only on the production possibilities frontier. 
B)  An economy can produce at any point inside or outside a production possibilities frontier. 
C)  An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D)  An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. 
A)  An economy can produce only on the production possibilities frontier. 
B)  An economy can produce at any point inside or outside a production possibilities frontier. 
C)  An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D)  An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.

Question 10

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a.On the graph,identify the area of feasible outcomes and the area of infeasible outcomes.
b.On the graph,label a point that is efficient and a point that is inefficient.
c.On the graph,illustrate the effect of the discovery of a new vein of iron ore,a resource needed to make both horseshoes and hammers,on this economy.
d.On a second graph,illustrate the effect of a new computerized assembly line in the production of hammers on this economy.

Accepted Answer

The answer of Draw a production possibilities frontier showing increasing...

Question 11

When income increases the slope of an individual's demand curve,the demand curve

Accepted Answer

A)  turns positive. 
B)  becomes undefined. 
C)  remains negative. 
D)  becomes infinite. 
A)  turns positive. 
B)  becomes undefined. 
C)  remains negative. 
D)  becomes infinite.

Question 12

The effects of foreign competition on the U.S.textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 13

Macroeconomics is the study of

Accepted Answer

A)  individual decision makers. 
B)  international trade. 
C)  economy-wide phenomena. 
D)  markets for large products. 
A)  individual decision makers. 
B)  international trade. 
C)  economy-wide phenomena. 
D)  markets for large products.

Question 14

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

Accepted Answer

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

Question 15

Figure 2-14
  
-Refer to Figure 2-14.When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-8

-Refer to Figure 2-8,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

Accepted Answer

A)  unemployment. 
B)  an improvement in donut production technology. 
C)  an improvement in coffee production technology. 
D)  an improvement in both donut and coffee production technology. 
A)  unemployment. 
B)  an improvement in donut production technology. 
C)  an improvement in coffee production technology. 
D)  an improvement in both donut and coffee production technology.

Question 17

Economists at the Department of Justice

Accepted Answer

A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget. 
A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget.

Question 18

Figure 2-8

-Refer to Figure 2-8,Panel (a).The opportunity cost of moving from point M to point L is

Accepted Answer

A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee. 
A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee.

Question 19

In the circular-flow diagram,which of the following items represents a payment for a factor of production?

Accepted Answer

A)  interest 
B)  capital 
C)  spending by households on goods 
D)  spending by households on services 
A)  interest 
B)  capital 
C)  spending by households on goods 
D)  spending by households on services

Question 20

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist.

Figure 2-3 -Refer to Figure 2-3.This economy cannot produce at which point(s)?

A macroeconomist - as opposed to a microeconomist - might study

Which of the following is not correct?

Economists make use of assumptions,some of which are unrealistic,for the purpose of

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

Figure 2-7 -Refer to Figure 2-7.Efficient production is represented by which point(s)?

Figure 2-12 -Refer to Figure 2-12.Which of the following combinations of points are both efficient and attainable for this economy?

Figure 2-13 -Refer to Figure 2-13.Cups of coffee per day and the hours that someone can go without sleep appear to have

Which of the following is a correct statement about production possibilities frontiers?

When income increases the slope of an individual's demand curve,the demand curve

The effects of foreign competition on the U.S.textile industry would be studied by a microeconomist rather than a macroeconomist.

Macroeconomics is the study of

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

Figure 2-14 -Refer to Figure 2-14.When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Figure 2-8 -Refer to Figure 2-8,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

Economists at the Department of Justice

Figure 2-8 -Refer to Figure 2-8,Panel (a).The opportunity cost of moving from point M to point L is

In the circular-flow diagram,which of the following items represents a payment for a factor of production?

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

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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