Question 1

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 2

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 3

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 4

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Accepted Answer

The answer of Like biologists and physicists, economists use the...

Question 5

Figure 2-3
  
-Refer to Figure 2-3. If this economy devotes all of its resources to the production of forks, then it will produce

Accepted Answer

A) 80 knives and 0 forks. 
B) 40 knives and 50 forks. 
C) 0 knives and 100 forks. 
D) 50 knives and 80 forks. 
A) 80 knives and 0 forks. 
B) 40 knives and 50 forks. 
C) 0 knives and 100 forks. 
D) 50 knives and 80 forks.

Question 6

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Economic models can help us understand reality only when they include all details of the economy.

Accepted Answer

A) True 
 B)False

Question 9

Figure 2-11
   ​
-With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-2
  
-Refer to Figure 2-2. If Boxes A and B represent households and firms, then 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 11

Suppose the price level is measured along the vertical axis on a graph. When the price level changes, there will be a

Accepted Answer

A) rotation of the curve. 
B) shift of the curve. 
C) movement along the curve. 
D) change in the slope of the curve. 
A) rotation of the curve. 
B) shift of the curve. 
C) movement along the curve. 
D) change in the slope of the curve.

Question 12

Figure 2-14
​
   ​
-Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

Accepted Answer

The answer of Figure 2-14
​
   ​
-Refer to Figure...

Question 13

According to the circular-flow diagram, if Christian is a worker who delivers flowers for Happy Day Flower Company, he participates

Accepted Answer

A) in the markets for factors of production exchanging labor for income. 
B) in the markets for factors of production exchanging flowers for revenue. 
C) in the markets for goods and services exchanging flowers for wages, rent, and profit. 
D) in the markets for goods and services exchanging labor for income. 
A) in the markets for factors of production exchanging labor for income. 
B) in the markets for factors of production exchanging flowers for revenue. 
C) in the markets for goods and services exchanging flowers for wages, rent, and profit. 
D) in the markets for goods and services exchanging labor for income.

Question 14

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 15

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 16

Economists sometimes give conflicting advice because

Accepted Answer

A) graduate students in economics are encouraged to argue with each other. 
B) economists have different values and scientific judgments. 
C) economists acting as scientists do not like to agree with economists acting as policy advisers. 
D) economics is more of a belief system than a science. 
A) graduate students in economics are encouraged to argue with each other. 
B) economists have different values and scientific judgments. 
C) economists acting as scientists do not like to agree with economists acting as policy advisers. 
D) economics is more of a belief system than a science.

Question 17

Duties of the Council of Economic Advisers include

Accepted Answer

A) advising the president and writing the annual Economic Report of the President. 
B) implementing the president's tax policies. 
C) managing of the nation's money supply. 
D) managing the Social Security program. 
A) advising the president and writing the annual Economic Report of the President. 
B) implementing the president's tax policies. 
C) managing of the nation's money supply. 
D) managing the Social Security program.

Question 18

Figure 2-3
  
-Refer to Figure 2-3. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Accepted Answer

A) The economy has insufficient resources to produce at a more desirable point. 
B) The economy's available technology prevents it from producing at a more desirable point. 
C) There is widespread unemployment in the economy. 
D) The economy is experiencing economic growth. 
A) The economy has insufficient resources to produce at a more desirable point. 
B) The economy's available technology prevents it from producing at a more desirable point. 
C) There is widespread unemployment in the economy. 
D) The economy is experiencing economic growth.

Question 19

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 20

What you must give up to get something else is called the

Accepted Answer

The answer of What you must give up to get...

Exam 2: Thinking Like an Economist

Points inside the production possibilities frontier represent feasible levels of production.

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Figure 2-3 -Refer to Figure 2-3. If this economy devotes all of its resources to the production of forks, then it will produce

Economic growth causes a production possibilities frontier to shift outward.

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

Economic models can help us understand reality only when they include all details of the economy.

Figure 2-11 ​ -With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Figure 2-2 -Refer to Figure 2-2. If Boxes A and B represent households and firms, then Boxes C and D of this circular-flow diagram represent

Suppose the price level is measured along the vertical axis on a graph. When the price level changes, there will be a

Figure 2-14 ​ ​ -Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

According to the circular-flow diagram, if Christian is a worker who delivers flowers for Happy Day Flower Company, he participates

Unemployment causes production levels to be inefficient.

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Economists sometimes give conflicting advice because

Duties of the Council of Economic Advisers include

Figure 2-3 -Refer to Figure 2-3. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Economists try to address their subject with a scientist's objectivity.

What you must give up to get something else is called the

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

Applications: 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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Figure 2-11 -With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Figure 2-14 -Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?