Question 1

What do economists do when they attempt to simplify the real world and make it easier to understand

Accepted Answer

A) They make assumptions. 
B) They make uninformed judgments. 
C) They make predictions. 
D) They make evaluations. 
A) They make assumptions. 
B) They make uninformed judgments. 
C) They make predictions. 
D) They make evaluations.

Question 2

Which statement does NOT illustrate a characteristic of an economic model

Accepted Answer

A) A model simplifies reality. 
B) A model can explain how the economy is organized. 
C) A model can assume away irrelevant details. 
D) A model's conclusions are unrelated to assumptions 
A) A model simplifies reality. 
B) A model can explain how the economy is organized. 
C) A model can assume away irrelevant details. 
D) A model's conclusions are unrelated to assumptions

Question 3

What makes a model compelling

Accepted Answer

A) its application 
B) its simplicity 
C) its predictions 
D) its assumptions 
A) its application 
B) its simplicity 
C) its predictions 
D) its assumptions

Question 4

In the simple circular-flow diagram,who are the decision makers

Accepted Answer

A) individuals and government 
B) households and firms 
C) households and government 
D) households, individuals, and foreign nations 
A) individuals and government 
B) households and firms 
C) households and government 
D) households, individuals, and foreign nations

Question 5

Figure 2-10
  
-Refer to Figure 2-10.What is the slope of the curve between point A and point B

Accepted Answer

A) 5/2 
B) 2/5 
C) -2/5 
D) -5/2 
A) 5/2 
B) 2/5 
C) -2/5 
D) -5/2

Question 6

Which of the following is NOT a problem associated with graphing in economics

Accepted Answer

A) omitted variables 
B) holding everything else constant 
C) reverse causality 
D) the ability to show a relationship between two variables 
A) omitted variables 
B) holding everything else constant 
C) reverse causality 
D) the ability to show a relationship between two variables

Question 7

Figure 2-2
  
-Refer to Figure 2-2.What do boxes A and B represent

Accepted Answer

A) firms and households 
B) government and the foreign sector 
C) the goods and services market and the factors of production market 
D) households and government 
A) firms and households 
B) government and the foreign sector 
C) the goods and services market and the factors of production market 
D) households and government

Question 8

On a production possibilities frontier,when is production efficient

Accepted Answer

A) if the production point is on the frontier 
B) if the production point is outside the frontier 
C) if the production point is on or inside the frontier 
D) if the production point is inside the frontier 
A) if the production point is on the frontier 
B) if the production point is outside the frontier 
C) if the production point is on or inside the frontier 
D) if the production point is inside the frontier

Question 9

The field of economics is divided into two subfields:microeconomics and macroeconomics.

Accepted Answer

A) True 
 B)False

Question 10

In a pie chart,what does each "slice" of the pie represent

Accepted Answer

A) a specific percentage of the total pie 
B) an equal share of the total pie 
C) the amount of the pie each of the two variables represents 
D) a different variable 
A) a specific percentage of the total pie 
B) an equal share of the total pie 
C) the amount of the pie each of the two variables represents 
D) a different variable

Question 11

Figure 2-11
  
-Refer to Figure 2-11.The opportunity cost to the economy of moving from point A to point B is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 12

How is the slope of a line calculated

Accepted Answer

A) change in x/change in y 
B) change in y/change in x 
C) x/y 
D) x + y 
A) change in x/change in y 
B) change in y/change in x 
C) x/y 
D) x + y

Question 13

What are the four sectors in a more complex circular-flow diagram

Accepted Answer

A) households, government, financial markets, and international trade 
B) households, firms, government, and financial markets 
C) households, firms, financial markets, and international trade 
D) households, firms, government, and international trade 
A) households, government, financial markets, and international trade 
B) households, firms, government, and financial markets 
C) households, firms, financial markets, and international trade 
D) households, firms, government, and international trade

Question 14

Why are graphs such as bar graphs limited

Accepted Answer

A) They can only show variables that are positively related. 
B) They are extremely difficult to understand. 
C) They cannot show relationships between variables. 
D) They provide information on no more than two variables. 
A) They can only show variables that are positively related. 
B) They are extremely difficult to understand. 
C) They cannot show relationships between variables. 
D) They provide information on no more than two variables.

Question 15

When constructing a production possibilities frontier,which of the following is NOT an assumption

Accepted Answer

A) The economy produces more than two goods. 
B) All the economy's factors of production are being used. 
C) The economy has a fixed level of technology. 
D) The economy's available factors of production are fixed. 
A) The economy produces more than two goods. 
B) All the economy's factors of production are being used. 
C) The economy has a fixed level of technology. 
D) The economy's available factors of production are fixed.

Question 16

What is the first number in an ordered pair

Accepted Answer

A) the y-coordinate 
B) the x-coordinate 
C) either x or y, depending on the quadrant 
D) not useful to know, since most graphs in economics use p and q, not x and y 
A) the y-coordinate 
B) the x-coordinate 
C) either x or y, depending on the quadrant 
D) not useful to know, since most graphs in economics use p and q, not x and y

Question 17

What does a point on a country's production possibilities frontier represent

Accepted Answer

A) a combination of two goods that an economy will never be able to produce 
B) a combination of two goods that an economy can produce using all available resources and technology 
C) a combination of two goods that an economy can produce using some of its resources and technology 
D) a combination of two goods that an economy may be able to produce sometime in the future with additional resources and technology 
A) a combination of two goods that an economy will never be able to produce 
B) a combination of two goods that an economy can produce using all available resources and technology 
C) a combination of two goods that an economy can produce using some of its resources and technology 
D) a combination of two goods that an economy may be able to produce sometime in the future with additional resources and technology

Question 18

Figure 2-2
  
-Refer to Figure 2-2.Who owns the factors of production

Accepted Answer

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

Question 19

What are tariffs and quotas

Accepted Answer

A) policies that restrict trade among nations 
B) instruments implemented to increase trade efficiency 
C) measures of trade surpluses or deficits 
D) policies meant to improve the well-being of consumers 
A) policies that restrict trade among nations 
B) instruments implemented to increase trade efficiency 
C) measures of trade surpluses or deficits 
D) policies meant to improve the well-being of consumers

Question 20

Why are production possibilities frontiers usually bowed outward

Accepted Answer

A) constant opportunity cost 
B) increasing opportunity cost 
C) decreasing opportunity cost 
D) increasing productivity 
A) constant opportunity cost 
B) increasing opportunity cost 
C) decreasing opportunity cost 
D) increasing productivity

Exam 2: Thinking Like an Economist

What do economists do when they attempt to simplify the real world and make it easier to understand

Which statement does NOT illustrate a characteristic of an economic model

What makes a model compelling

In the simple circular-flow diagram,who are the decision makers

Figure 2-10 -Refer to Figure 2-10.What is the slope of the curve between point A and point B

Which of the following is NOT a problem associated with graphing in economics

Figure 2-2 -Refer to Figure 2-2.What do boxes A and B represent

On a production possibilities frontier,when is production efficient

The field of economics is divided into two subfields:microeconomics and macroeconomics.

In a pie chart,what does each "slice" of the pie represent

Figure 2-11 -Refer to Figure 2-11.The opportunity cost to the economy of moving from point A to point B is 10 dishwashers.

How is the slope of a line calculated

What are the four sectors in a more complex circular-flow diagram

Why are graphs such as bar graphs limited

When constructing a production possibilities frontier,which of the following is NOT an assumption

What is the first number in an ordered pair

What does a point on a country's production possibilities frontier represent

Figure 2-2 -Refer to Figure 2-2.Who owns the factors of production

What are tariffs and quotas

Why are production possibilities frontiers usually bowed outward

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 Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters