Question 1

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A) enforce the nation's antitrust laws. 
B) set the nation's monetary policy. 
C) provide evidence that incumbent members of Congress are performing well in their jobs. 
D) provide independent evaluations of policy proposals. 
A) enforce the nation's antitrust laws. 
B) set the nation's monetary policy. 
C) provide evidence that incumbent members of Congress are performing well in their jobs. 
D) provide independent evaluations of policy proposals.

Question 2

In conducting their research,economists often substitute historical events and historical episodes for

Accepted Answer

A) theories and observations. 
B) laboratory experiments. 
C) models. 
D) assumptions. 
A) theories and observations. 
B) laboratory experiments. 
C) models. 
D) assumptions.

Question 3

In order to provide information on two variables,an economist must use

Accepted Answer

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

Question 4

A relatively steep demand curve indicates that

Accepted Answer

A) quantity demanded will adjust only slightly to a price change. 
B) quantity demanded will adjust significantly to a price change. 
C) quantity demanded will not adjust to a price change. 
D) the change in quantity demanded will exactly equal a change in price. 
A) quantity demanded will adjust only slightly to a price change. 
B) quantity demanded will adjust significantly to a price change. 
C) quantity demanded will not adjust to a price change. 
D) the change in quantity demanded will exactly equal a change in price.

Question 5

Who among the following individuals majored in economics as a college student?

Accepted Answer

A) Mick Jagger, singer 
B) John Elway, National Football League quarterback 
C) Kofi Annan, United Nations Secretary General 
D) All of the above are correct. 
A) Mick Jagger, singer 
B) John Elway, National Football League quarterback 
C) Kofi Annan, United Nations Secretary General 
D) All of the above are correct.

Question 6

Which of the following is the most accurate statement about production possibilities?

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 7

Figure 2-2
  
-Refer to Figure 2-2.The figure represents a circular-flow diagram.If households are buyers in the markets represented by Box C,then

Accepted Answer

A) Box C must represent the markets for the factors of production. 
B) Box D must represent the markets for goods and services. 
C) firms are sellers in the markets represented by Box C. 
D) All of the above are correct. 
A) Box C must represent the markets for the factors of production. 
B) Box D must represent the markets for goods and services. 
C) firms are sellers in the markets represented by Box C. 
D) All of the above are correct.

Question 8

In the markets for factors of production,

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) the government provides firms with inputs for the production process. 
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) the government provides firms with inputs for the production process.

Question 9

Bill Belichick,coach of the New England Patriots football team,

Accepted Answer

A) majored in sports management when he was a college student. 
B) has been credited with adapting the methods of a social scientist to the coaching of football. 
C) has been described as a coach who uses his knowledge of business to keep the salaries of his players artificially low. 
D) All of the above are correct. 
A) majored in sports management when he was a college student. 
B) has been credited with adapting the methods of a social scientist to the coaching of football. 
C) has been described as a coach who uses his knowledge of business to keep the salaries of his players artificially low. 
D) All of the above are correct.

Question 10

Which types of models are built with assumptions?

Accepted Answer

A) economic models, but not models in other disciplines such as physics and sociology 
B) economic models as well as models in other disciplines such as physics and sociology 
C) models that are built for teaching purposes but not for research purposes 
D) No models are built with assumptions. 
A) economic models, but not models in other disciplines such as physics and sociology 
B) economic models as well as models in other disciplines such as physics and sociology 
C) models that are built for teaching purposes but not for research purposes 
D) No models are built with assumptions.

Question 11

How did the influential economist John Maynard Keynes explain his remark that although economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Accepted Answer

A) Most people who study economics are not very bright. 
B) Good economists must possess a rare combination of gifts. 
C) Economics is quite boring; hence, people tend to lose interest in it before mastering it. 
D) Good thinkers become frustrated with economics because it does not make use of the scientific method. 
A) Most people who study economics are not very bright. 
B) Good economists must possess a rare combination of gifts. 
C) Economics is quite boring; hence, people tend to lose interest in it before mastering it. 
D) Good thinkers become frustrated with economics because it does not make use of the scientific method.

Question 12

Normative conclusions

Accepted Answer

A) are derived directly from positive analysis. 
B) are based on ignorance of positive analysis. 
C) involve value judgments. 
D) reflect the economist's role as scientist. 
A) are derived directly from positive analysis. 
B) are based on ignorance of positive analysis. 
C) involve value judgments. 
D) reflect the economist's role as scientist.

Question 13

When studying the effects of public policy changes,economists

Accepted Answer

A) always refrain from making assumptions. 
B) sometimes make different assumptions about the short run and the long run. 
C) consider only the direct effects of those policy changes and not the indirect effects. 
D) consider only the short-run effects of those policy changes and not the long-run effects. 
A) always refrain from making assumptions. 
B) sometimes make different assumptions about the short run and the long run. 
C) consider only the direct effects of those policy changes and not the indirect effects. 
D) consider only the short-run effects of those policy changes and not the long-run effects.

Question 14

Figure 2-3
  
-Refer to Figure 2-3.Inefficient production is represented by which point or points?

Accepted Answer

A) D 
B) D, E 
C) A, C 
D) A, B 
A) D 
B) D, E 
C) A, C 
D) A, B

Question 15

Which of the following is a correct statement about slope?

Accepted Answer

A) A horizontal line has an infinite slope, and a vertical line has a zero slope. 
B) A horizontal line has a slope of 1, and a vertical line has a slope of -1. 
C) A horizontal line has a zero slope, and a vertical line has an infinite slope. 
D) None of the above are correct. 
A) A horizontal line has an infinite slope, and a vertical line has a zero slope. 
B) A horizontal line has a slope of 1, and a vertical line has a slope of -1. 
C) A horizontal line has a zero slope, and a vertical line has an infinite slope. 
D) None of the above are correct.

Question 16

A circular-flow diagram is a model that

Accepted Answer

A) helps to explain how participants in the economy interact with one another. 
B) helps to explain how the economy is organized. 
C) incorporates the markets for the factors of production. 
D) All of the above are correct. 
A) helps to explain how participants in the economy interact with one another. 
B) helps to explain how the economy is organized. 
C) incorporates the markets for the factors of production. 
D) All of the above are correct.

Question 17

Figure 2-1
  
-Refer to Figure 2-1.Michelle completes her first week of employment working as a hairdresser at a salon.On Friday of that week she receives her first paycheck.To which of the arrows does this activity contribute directly?

Accepted Answer

A) B only 
B) A and B 
C) C only 
D) C and D 
A) B only 
B) A and B 
C) C only 
D) C and D

Question 18

Draw a production possibilities frontier showing increasing opportunity cost for 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 as point "E" and a point that is inefficient as point "I".
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 19

Figure 2-3
  
-Refer to Figure 2-3.Which point represents the situation in which the economy is producing its maximum possible quantity of tubas?

Accepted Answer

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

Question 20

When economists are trying to help improve the world they are

Accepted Answer

A) concerned with positive economics rather than normative economics. 
B) concerned with macroeconomics rather than microeconomics. 
C) scientists. 
D) policy advisers. 
A) concerned with positive economics rather than normative economics. 
B) concerned with macroeconomics rather than microeconomics. 
C) scientists. 
D) policy advisers.

Exam 2: Thinking Like an Economist

Congress relies on economists at the Congressional Budget Office to

In conducting their research,economists often substitute historical events and historical episodes for

In order to provide information on two variables,an economist must use

A relatively steep demand curve indicates that

Who among the following individuals majored in economics as a college student?

Which of the following is the most accurate statement about production possibilities?

Figure 2-2 -Refer to Figure 2-2.The figure represents a circular-flow diagram.If households are buyers in the markets represented by Box C,then

In the markets for factors of production,

Bill Belichick,coach of the New England Patriots football team,

Which types of models are built with assumptions?

How did the influential economist John Maynard Keynes explain his remark that although economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Normative conclusions

When studying the effects of public policy changes,economists

Figure 2-3 -Refer to Figure 2-3.Inefficient production is represented by which point or points?

Which of the following is a correct statement about slope?

A circular-flow diagram is a model that

Figure 2-1 -Refer to Figure 2-1.Michelle completes her first week of employment working as a hairdresser at a salon.On Friday of that week she receives her first paycheck.To which of the arrows does this activity contribute directly?

Figure 2-3 -Refer to Figure 2-3.Which point represents the situation in which the economy is producing its maximum possible quantity of tubas?

When economists are trying to help improve the world they are

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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