Question 1

Economists use models in order to

Accepted Answer

A)  get around having to deal with actual facts. 
B)  understand real-life events and predict outcomes. 
C)  avoid having to use theories to understand economic conditions. 
D)  help elect political candidates. 
A)  get around having to deal with actual facts. 
B)  understand real-life events and predict outcomes. 
C)  avoid having to use theories to understand economic conditions. 
D)  help elect political candidates.

Question 2

It is possible to represent three dimensions on a two-dimensional graph by using

Accepted Answer

A)  a contour map. 
B)  a razor blade. 
C)  curved lines. 
D)  All of these responses are correct. 
A)  a contour map. 
B)  a razor blade. 
C)  curved lines. 
D)  All of these responses are correct.

Question 3

A contour map illustrates which of the following?

Accepted Answer

A)  The cause-effect relationship between two variables 
B)  The cause-effect relationship between three variables 
C)  The way that three variables are correlated 
D)  The way that one variable affects another, which in turn affects a third variable 
E)  The way that two variables are correlated and in turn cause changes in a third variable 
A)  The cause-effect relationship between two variables 
B)  The cause-effect relationship between three variables 
C)  The way that three variables are correlated 
D)  The way that one variable affects another, which in turn affects a third variable 
E)  The way that two variables are correlated and in turn cause changes in a third variable

Question 4

In 1971, a bank worker could process 265 checks in 1 hour. Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour. Economists describe this type of activity as

Accepted Answer

A)  the exploitation of labor. 
B)  an increase in labor productivity. 
C)  the displacement of labor. 
D)  the effects of comparative advantage. 
E)  the mutual gains received through voluntary trade. 
A)  the exploitation of labor. 
B)  an increase in labor productivity. 
C)  the displacement of labor. 
D)  the effects of comparative advantage. 
E)  the mutual gains received through voluntary trade.

Question 5

During a war, a government will often draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items?

Accepted Answer

A)  The value of the civilian goods no longer produced by the new soldiers 
B)  The cost of feeding and clothing the new soldiers 
C)  The dollar cost of the payroll 
D)  The higher prices of civilian goods due to wartime shortages 
E)  The cost of transporting the soldiers to combat 
A)  The value of the civilian goods no longer produced by the new soldiers 
B)  The cost of feeding and clothing the new soldiers 
C)  The dollar cost of the payroll 
D)  The higher prices of civilian goods due to wartime shortages 
E)  The cost of transporting the soldiers to combat

Question 6

Efforts to reduce the unemployment rate are likely, in the short run, to lead to

Accepted Answer

A)  a decrease in the inflation rate. 
B)  an increase in the inflation rate. 
C)  no change in the inflation rate. 
D)  have no impact on unemployment. 
A)  a decrease in the inflation rate. 
B)  an increase in the inflation rate. 
C)  no change in the inflation rate. 
D)  have no impact on unemployment.

Question 7

An economic model can be defined as

Accepted Answer

A)  a testable claim that can be evaluated with proper data. 
B)  a representation of a theory or a part of a theory. 
C)  another word for theory. 
D)  a method to distinguish correlation from causation. 
E)  All of these responses are correct. 
A)  a testable claim that can be evaluated with proper data. 
B)  a representation of a theory or a part of a theory. 
C)  another word for theory. 
D)  a method to distinguish correlation from causation. 
E)  All of these responses are correct.

Question 8

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Accepted Answer

A)  production indifference map 
B)  two-variable diagram 
C)  scalar diagram 
D)  time-series graph 
A)  production indifference map 
B)  two-variable diagram 
C)  scalar diagram 
D)  time-series graph

Question 9

Abstraction can lead to gross distortions of pertinent facts.

Accepted Answer

A) True 
 B)False

Question 10

Economic models cannot take the form of

Accepted Answer

A)  equations. 
B)  words. 
C)  graphs. 
D)  actual duplication of observed conditions. 
A)  equations. 
B)  words. 
C)  graphs. 
D)  actual duplication of observed conditions.

Question 11

To analyze policy options, economists are forced to deal with

Accepted Answer

A)  ordinary citizens. 
B)  elected officials. 
C)  rotating statistical values. 
D)  events that have not occurred. 
A)  ordinary citizens. 
B)  elected officials. 
C)  rotating statistical values. 
D)  events that have not occurred.

Question 12

Explain the following statement: "Good decisions typically require marginal analysis, which weighs added costs against added benefits."

Accepted Answer

A marginal analysis of an economic decis

Question 13

Standby passengers on airlines who pay low rates for seats benefit from the low price. How are the airlines affected?

Accepted Answer

A)  They lose, because the standby passengers do not cover the full cost of the seats. 
B)  They gain, because the additional revenue covers the "fixed costs" of the flight. 
C)  They lose, because the gain of the passengers must necessarily come at the expense of the airline. 
D)  They benefit as long as the additional revenue from the passengers exceeds the marginal cost. 
E)  Uncertain, because economic theory says nothing about this sort of situation. 
A)  They lose, because the standby passengers do not cover the full cost of the seats. 
B)  They gain, because the additional revenue covers the "fixed costs" of the flight. 
C)  They lose, because the gain of the passengers must necessarily come at the expense of the airline. 
D)  They benefit as long as the additional revenue from the passengers exceeds the marginal cost. 
E)  Uncertain, because economic theory says nothing about this sort of situation.

Question 14

In Egypt, in 1970, the Aswan Dam was completed. By preventing the annual flood of the Nile (thereby providing millions of acres of arable land) and by providing electricity, the dam was expected to raise the living standard of the Egyptian people-and it has. However, it has also led to a rise in the water table, which causes Egypt's limestone structures, including the pyramids, to absorb more salt water and to suffer serious erosion from crystallized salts. Combined with air pollution and traffic vibration, this erosion is turning the pyramids to dust. Economists analyze this type of problem with the concept of

Accepted Answer

A)  an externality. 
B)  the antiquity problem. 
C)  a free-rider problem. 
D)  the public good problem. 
E)  the trade-off between equity and output. 
A)  an externality. 
B)  the antiquity problem. 
C)  a free-rider problem. 
D)  the public good problem. 
E)  the trade-off between equity and output.

Question 15

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts, for example, to purchase a good or service, they will usually invoke the concept of

Accepted Answer

A)  marginal analysis. 
B)  mutual gains from voluntary trade. 
C)  inflation-unemployment trade-off. 
D)  the need for abstraction. 
E)  externalities. 
A)  marginal analysis. 
B)  mutual gains from voluntary trade. 
C)  inflation-unemployment trade-off. 
D)  the need for abstraction. 
E)  externalities.

Question 16

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

Accepted Answer

The student is failing to use marginal a

Question 17

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

Accepted Answer

A)  5 
B)  −.5. 
C)  −2. 
D)  −72. 
A)  5 
B)  −.5. 
C)  −2. 
D)  −72.

Question 18

All two-dimensional graphs must have an origin, a horizontal axis, and a vertical axis.

Accepted Answer

A) True 
 B)False

Question 19

Economists disagree on most economic issues facing an economy.

Accepted Answer

A) True 
 B)False

Question 20

Suppose Tammy grew up on a farm and is very good at plowing. In addition, suppose she is a popular country singer who earns $4,000 per performance. If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

Accepted Answer

A)  Tammy did both the plowing and the singing. 
B)  Tammy specialized in plowing and Bob in singing. 
C)  Bob did both the plowing and singing. 
D)  Tammy specialized in singing and Bob in plowing. 
E)  they both plowed and sang. 
A)  Tammy did both the plowing and the singing. 
B)  Tammy specialized in plowing and Bob in singing. 
C)  Bob did both the plowing and singing. 
D)  Tammy specialized in singing and Bob in plowing. 
E)  they both plowed and sang.

Economists use models in order to

It is possible to represent three dimensions on a two-dimensional graph by using

A contour map illustrates which of the following?

In 1971, a bank worker could process 265 checks in 1 hour. Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour. Economists describe this type of activity as

During a war, a government will often draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items?

Efforts to reduce the unemployment rate are likely, in the short run, to lead to

An economic model can be defined as

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Abstraction can lead to gross distortions of pertinent facts.

Economic models cannot take the form of

To analyze policy options, economists are forced to deal with

Explain the following statement: "Good decisions typically require marginal analysis, which weighs added costs against added benefits."

Standby passengers on airlines who pay low rates for seats benefit from the low price. How are the airlines affected?

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts, for example, to purchase a good or service, they will usually invoke the concept of

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

All two-dimensional graphs must have an origin, a horizontal axis, and a vertical axis.

Economists disagree on most economic issues facing an economy.

Suppose Tammy grew up on a farm and is very good at plowing. In addition, suppose she is a popular country singer who earns $4,000 per performance. If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

Exam 1: What Is Economics

Economists use models in order to

It is possible to represent three dimensions on a two-dimensional graph by using

A contour map illustrates which of the following?

In 1971, a bank worker could process 265 checks in 1 hour. Currently, computers with built-in reader-sorter processing capacity have pushed that number above 100,000 checks per hour. Economists describe this type of activity as

During a war, a government will often draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items?

Efforts to reduce the unemployment rate are likely, in the short run, to lead to

An economic model can be defined as

A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output.

Abstraction can lead to gross distortions of pertinent facts.

Economic models cannot take the form of

To analyze policy options, economists are forced to deal with

Explain the following statement: "Good decisions typically require marginal analysis, which weighs added costs against added benefits."

Standby passengers on airlines who pay low rates for seats benefit from the low price. How are the airlines affected?

When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts, for example, to purchase a good or service, they will usually invoke the concept of

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

If movement along a graph causes the value on the vertical axis to rise by 5 units and the value on the horizontal axis to fall by 10 units, the slope of the function is

All two-dimensional graphs must have an origin, a horizontal axis, and a vertical axis.

Economists disagree on most economic issues facing an economy.

Suppose Tammy grew up on a farm and is very good at plowing. In addition, suppose she is a popular country singer who earns $4,000 per performance. If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters