Question 1

In the markets for factors of production in the circular-flow diagram,

Accepted Answer

A)  households provide firms with labor, land, and capital. 
B)  households provide firms with savings for investment. 
C)  firms provide households with goods and services. 
D)  firms provide households with profit. 
A)  households provide firms with labor, land, and capital. 
B)  households provide firms with savings for investment. 
C)  firms provide households with goods and services. 
D)  firms provide households with profit.

Question 2

Figure 2-14
  
-Refer to Figure 2-14.The opportunity cost of moving from point A to point D is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 3

In the circular-flow diagram,

Accepted Answer

A)  profit flows from households to firms. 
B)  labor flows from households to firms. 
C)  services flow from households to firms. 
D)  All of the above are correct. 
A)  profit flows from households to firms. 
B)  labor flows from households to firms. 
C)  services flow from households to firms. 
D)  All of the above are correct.

Question 4

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Question 5

Philip wants to create a graph containing the prices of apples and the corresponding quantities of apples demanded by customers.He should use a(n)

Accepted Answer

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

Question 6

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)  similar opinions about the validity of economic theories 
B)  significant differences in education 
C)  differences in personal values 
D)  a reliance on normative statement for research theories 
A)  similar opinions about the validity of economic theories 
B)  significant differences in education 
C)  differences in personal values 
D)  a reliance on normative statement for research theories

Question 8

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A)  if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption 
B)  once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other 
C)  for an economy to consume more of one good, it must stop consuming the other good entirely 
D)  for an economy to produce and consume goods, it must sacrifice environmental quality 
A)  if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption 
B)  once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other 
C)  for an economy to consume more of one good, it must stop consuming the other good entirely 
D)  for an economy to produce and consume goods, it must sacrifice environmental quality

Question 10

The simple circular-flow diagram is a model that includes only some key players in the real economy.Which of the following key players are omitted from the simple circular-flow model?

Accepted Answer

A)  Households 
B)  Firms 
C)  Government 
D)  Markets for Factors of Production 
A)  Households 
B)  Firms 
C)  Government 
D)  Markets for Factors of Production

Question 11

Policymaking in a representative democracy

Accepted Answer

A)  is straightforward and does not involve any disagreement. 
B)  benefits from the input of economists, even if their advice is not always followed. 
C)  is conducted without the input of economists. 
D)  is always based exclusively on the results of economic analysis. 
A)  is straightforward and does not involve any disagreement. 
B)  benefits from the input of economists, even if their advice is not always followed. 
C)  is conducted without the input of economists. 
D)  is always based exclusively on the results of economic analysis.

Question 12

Production is efficient if the economy is producing at a point

Accepted Answer

A)  on the production possibilities frontier. 
B)  outside the production possibilities frontier. 
C)  on or inside the production possibilities frontier. 
D)  inside the production possibilities frontier. 
A)  on the production possibilities frontier. 
B)  outside the production possibilities frontier. 
C)  on or inside the production possibilities frontier. 
D)  inside the production possibilities frontier.

Question 13

Figure 2-3
  
-Refer to Figure 2-3.Inefficient production is represented by which point(s)?

Accepted Answer

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

Question 14

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A)  A country produces only two goods or types of goods. 
B)  Technology does not change. 
C)  The amount of available resources does not change. 
D)  There is a fixed quantity of money. 
A)  A country produces only two goods or types of goods. 
B)  Technology does not change. 
C)  The amount of available resources does not change. 
D)  There is a fixed quantity of money.

Question 16

Economists speaking like scientists make

Accepted Answer

A)  normative statements. 
B)  prescriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be. 
A)  normative statements. 
B)  prescriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be.

Question 17

Positive statements are descriptive,while normative statements are prescriptive.

Accepted Answer

A) True 
 B)False

Question 18

In the past,environmentalists thought of economics as a method of maximizing profits.Presently,

Accepted Answer

A)  there is now realization that economics offers a framework for natural resource allocation. 
B)  economists are helping to formulate the intellectual framework behind approaches to protecting endangered species, reducing pollution, and preventing climate change. 
C)  economics informs environmental studies but economists still do not work for environmental advocacy groups. 
D)  More than one of the above is correct. 
A)  there is now realization that economics offers a framework for natural resource allocation. 
B)  economists are helping to formulate the intellectual framework behind approaches to protecting endangered species, reducing pollution, and preventing climate change. 
C)  economics informs environmental studies but economists still do not work for environmental advocacy groups. 
D)  More than one of the above is correct.

Question 19

Figure 2-15
Relationship between Price and Cups of Coffee
  
-Refer to Figure 2-15.The slope of the line containing points A and B is

Accepted Answer

A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2. 
A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2.

Question 20

Which of the following statements are positive and which are normative?
a.The minimum wage creates unemployment among young and unskilled workers.
b.The minimum wage ought to be abolished.
c.If the price of a product in a market decreases,then,other things equal,quantity demanded will increase.
d.A little bit of inflation is worse for society than a little bit of unemployment.
e.There is a tradeoff between inflation and unemployment in the short run.
f.If consumer income increases,then,other things equal,the demand for automobiles will increase.
g.The U.S.income distribution is not fair.
h.U.S.workers deserve more liberal unemployment benefits.
i.If interest rates increase,then investment will decrease.
j.If welfare benefits were reduced,then the country would be better off.

Accepted Answer

a,c,e,f,and i are po

Exam 2: Thinking Like an Economist.

In the markets for factors of production in the circular-flow diagram,

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point A to point D is 10 dishwashers.

In the circular-flow diagram,

Microeconomics and macroeconomics are closely intertwined.

Philip wants to create a graph containing the prices of apples and the corresponding quantities of apples demanded by customers.He should use a(n)

Macroeconomics is the study of economy-wide phenomena.

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Which of the following trade-offs does the production possibilities frontier illustrate?

The simple circular-flow diagram is a model that includes only some key players in the real economy.Which of the following key players are omitted from the simple circular-flow model?

Policymaking in a representative democracy

Production is efficient if the economy is producing at a point

Figure 2-3 -Refer to Figure 2-3.Inefficient production is represented by which point(s)?

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Which of the following is not an assumption of the productions possibilities frontier?

Economists speaking like scientists make

Positive statements are descriptive,while normative statements are prescriptive.

In the past,environmentalists thought of economics as a method of maximizing profits.Presently,

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15.The slope of the line containing points A and B is

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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