Question 1

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)  a controlled experiment that lead to the formulation of a scientific theory. 
B)  being in the right place at the right time. 
C)  an idea whose time had come. 
D)  the interplay between observation and theory in science. 
A)  a controlled experiment that lead to the formulation of a scientific theory. 
B)  being in the right place at the right time. 
C)  an idea whose time had come. 
D)  the interplay between observation and theory in science.

Question 2

Figure 2-17
Relationship Between Years of Education and Annual Income
  
-Refer to Figure 2-17.Senator Smith observes the graph and concludes that people who earn higher incomes attend school for more years.Senator Jones observes the graph and concludes that people who attend school for more years earn higher incomes.Who is correct?

Accepted Answer

A)  Senator Smith is correct. 
B)  Senator Jones is correct. 
C)  It is difficult to say which senator might be correct due to the reverse causality problem. 
D)  It is difficult to say which senator might be correct due to omitted variable bias. 
A)  Senator Smith is correct. 
B)  Senator Jones is correct. 
C)  It is difficult to say which senator might be correct due to the reverse causality problem. 
D)  It is difficult to say which senator might be correct due to omitted variable bias.

Question 3

Figure 2-1
  
-Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 4

Use the following graph to answer the following questions.
a.How would point J be represented as an ordered pair?
b.What type of curve is this?
c.Does this curve show a positive or negative correlation between price and quantity?
d.Compute the slope of D1 between points J and L.
e.What is the slope of D1 between points L and N? Why would you not have to calculate this answer?
f.What is it called if we move from D1 to D2?
g.How do you know that the slope of D2 is the same as the slope of D1?

Accepted Answer

a.(20,24)
b.a demand curve
c.a negative

Question 5

Figure 2-2
  
-Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

Accepted Answer

A)  households and government. 
B)  firms and government. 
C)  the markets for goods and services and the markets for financial assets. 
D)  the markets for goods and services and the markets for factors of production. 
A)  households and government. 
B)  firms and government. 
C)  the markets for goods and services and the markets for financial assets. 
D)  the markets for goods and services and the markets for factors of production.

Question 6

The production possibilities frontier provides an illustration of the principle that

Accepted Answer

A)  trade can make everyone better off. 
B)  governments can sometimes improve market outcomes. 
C)  people face trade-offs. 
D)  people respond to incentives. 
A)  trade can make everyone better off. 
B)  governments can sometimes improve market outcomes. 
C)  people face trade-offs. 
D)  people respond to incentives.

Question 7

Table 2-4
Production Possibilities for Batterland
  
-Refer to Table 2-4.What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

Accepted Answer

A)  75 waffles 
B)  150 waffles 
C)  250 waffles 
D)  325 waffles 
A)  75 waffles 
B)  150 waffles 
C)  250 waffles 
D)  325 waffles

Question 8

In the ordered pair (17,75),75 is the

Accepted Answer

A)  horizontal location of the point. 
B)  the slope. 
C)  the x-coordinate. 
D)  the y-coordinate. 
A)  horizontal location of the point. 
B)  the slope. 
C)  the x-coordinate. 
D)  the y-coordinate.

Question 9

Economic models omit many details to allow us to see what is truly important.

Accepted Answer

A) True 
 B)False

Question 10

In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  Americans deserve a cleaner environment. 
B)  Reducing emissions reduces days missed from school due to asthma. 
C)  All Americans are entitled to quality health care. 
D)  Economic policies should focus on improving equality. 
A)  Americans deserve a cleaner environment. 
B)  Reducing emissions reduces days missed from school due to asthma. 
C)  All Americans are entitled to quality health care. 
D)  Economic policies should focus on improving equality.

Question 12

In the ordered pair (17,75),17 is the

Accepted Answer

A)  vertical location of the point. 
B)  the slope. 
C)  the x-coordinate. 
D)  the y-coordinate. 
A)  vertical location of the point. 
B)  the slope. 
C)  the x-coordinate. 
D)  the y-coordinate.

Question 13

When constructing a production possibilities frontier,which of the following assumptions is not made?

Accepted Answer

A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period. 
A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period.

Question 14

Figure 2-14
  
-Refer to Figure 2-14.The movement from point B to point C is a(n)

Accepted Answer

A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed. 
A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed.

Question 15

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)  using all of the scarce resources it has available. 
B)  conserving on resources, rather than using all available resources. 
C)  getting all it can get from the scarce resources it has available. 
D)  able to produce more than what is currently being produced without additional resources. 
A)  using all of the scarce resources it has available. 
B)  conserving on resources, rather than using all available resources. 
C)  getting all it can get from the scarce resources it has available. 
D)  able to produce more than what is currently being produced without additional resources.

Question 16

In the circular-flow diagram,

Accepted Answer

A)  firms own the factors of production. 
B)  the factors of production are labor, land, and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct. 
A)  firms own the factors of production. 
B)  the factors of production are labor, land, and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct.

Question 17

For economists,statements about the world are of two types:

Accepted Answer

A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements. 
A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements.

Question 18

The country of Aceland produces two goods,televisions and computers.Last year,it produced 200 televisions and 500 computers.This year,it produced 250 televisions and 600 computers.Given no other information,which of the following events could not explain this change?

Accepted Answer

A)  Aceland experienced a reduction in unemployment. 
B)  Aceland experienced an improvement in computer-making technology. 
C)  Aceland acquired more resources. 
D)  Any of these events could, in fact, explain the change. 
A)  Aceland experienced a reduction in unemployment. 
B)  Aceland experienced an improvement in computer-making technology. 
C)  Aceland acquired more resources. 
D)  Any of these events could, in fact, explain the change.

Question 19

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 20

In the simple circular-flow diagram,who consumes the goods and services that firms produce?

Accepted Answer

A)  households only 
B)  firms only 
C)  both households and firms 
D)  neither households nor firms 
A)  households only 
B)  firms only 
C)  both households and firms 
D)  neither households nor firms

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Figure 2-2 -Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

The production possibilities frontier provides an illustration of the principle that

Table 2-4 Production Possibilities for Batterland -Refer to Table 2-4.What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

In the ordered pair (17,75),75 is the

Economic models omit many details to allow us to see what is truly important.

In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

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

In the ordered pair (17,75),17 is the

When constructing a production possibilities frontier,which of the following assumptions is not made?

Figure 2-14 -Refer to Figure 2-14.The movement from point B to point C is a(n)

An economic outcome is said to be efficient if the economy is

In the circular-flow diagram,

For economists,statements about the world are of two types:

The country of Aceland produces two goods,televisions and computers.Last year,it produced 200 televisions and 500 computers.This year,it produced 250 televisions and 600 computers.Given no other information,which of the following events could not explain this change?

Historical episodes allow economists to illustrate and evaluate current economic theories.

In the simple circular-flow diagram,who consumes the goods and services that firms produce?

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.

Filters

Exam 2: Thinking Like an Economist.

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Figure 2-2 -Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

The production possibilities frontier provides an illustration of the principle that

Table 2-4 Production Possibilities for Batterland -Refer to Table 2-4.What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

In the ordered pair (17,75),75 is the

Economic models omit many details to allow us to see what is truly important.

In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

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

In the ordered pair (17,75),17 is the

When constructing a production possibilities frontier,which of the following assumptions is not made?

Figure 2-14 -Refer to Figure 2-14.The movement from point B to point C is a(n)

An economic outcome is said to be efficient if the economy is

In the circular-flow diagram,

For economists,statements about the world are of two types:

The country of Aceland produces two goods,televisions and computers.Last year,it produced 200 televisions and 500 computers.This year,it produced 250 televisions and 600 computers.Given no other information,which of the following events could not explain this change?

Historical episodes allow economists to illustrate and evaluate current economic theories.

In the simple circular-flow diagram,who consumes the goods and services that firms produce?

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.

Filters