Question 1

Normative statements describe how the world is,while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-3
  
-Refer to Figure 2-3.At which point or points can the economy produce

Accepted Answer

A) points B, D, and E 
B) points A, B, D, and E 
C) points D and C 
D) point D 
A) points B, D, and E 
B) points A, B, D, and E 
C) points D and C 
D) point D

Question 3

What does a relatively steep demand curve mean

Accepted Answer

A) quantity demand will adjust slightly to a price change 
B) quantity demand will adjust greatly to a price change 
C) quantity demand will not adjust to a price change 
D) the change in quantity demand will exactly equal a change in price 
A) quantity demand will adjust slightly to a price change 
B) quantity demand will adjust greatly to a price change 
C) quantity demand will not adjust to a price change 
D) the change in quantity demand will exactly equal a change in price

Question 4

Which statement about slope is NOT correct

Accepted Answer

A) Slope explains how much one variable responds to changes in another variable. 
B) Slope can be computed by delta x divided by delta y. 
C) Slope is positive if the two variables are moving in the same direction. 
D) Slope does not change if the line is linear. 
A) Slope explains how much one variable responds to changes in another variable. 
B) Slope can be computed by delta x divided by delta y. 
C) Slope is positive if the two variables are moving in the same direction. 
D) Slope does not change if the line is linear.

Question 5

What happens in the markets for goods and services

Accepted Answer

A) Households provide firms with savings for investment. 
B) Households provide firms with labour, land, and capital. 
C) Firms provide households with the output they produced. 
D) The government provides firms with inputs for the production process. 
A) Households provide firms with savings for investment. 
B) Households provide firms with labour, land, and capital. 
C) Firms provide households with the output they produced. 
D) The government provides firms with inputs for the production process.

Question 6

Why do economists make assumptions

Accepted Answer

A) to diminish the chance of wrong answers 
B) to make the world easier to understand 
C) because all scientists make assumptions 
D) to make certain that all necessary variables are included 
A) to diminish the chance of wrong answers 
B) to make the world easier to understand 
C) because all scientists make assumptions 
D) to make certain that all necessary variables are included

Question 7

What is the y-coordinate

Accepted Answer

A) the first number of an ordered pair, which represents the point's horizontal location 
B) the second number of an ordered pair, which represents the point's horizontal location 
C) the first number of an ordered pair, which represents the point's vertical location 
D) the second number of an ordered pair, which represents the point's vertical location 
A) the first number of an ordered pair, which represents the point's horizontal location 
B) the second number of an ordered pair, which represents the point's horizontal location 
C) the first number of an ordered pair, which represents the point's vertical location 
D) the second number of an ordered pair, which represents the point's vertical location

Question 8

What happens when economists test theories

Accepted Answer

A) They must make do with whatever data the world gives them. 
B) They can manipulate conditions easier than other scientific fields. 
C) They can enlist the government's help to manipulate economic conditions. 
D) They can achieve statistically valid results with much smaller sample sizes. 
A) They must make do with whatever data the world gives them. 
B) They can manipulate conditions easier than other scientific fields. 
C) They can enlist the government's help to manipulate economic conditions. 
D) They can achieve statistically valid results with much smaller sample sizes.

Question 9

What is a characteristic of factors of production

Accepted Answer

A) They are used to produce goods and services. 
B) They are owned by firms. 
C) They are abundant in most economies. 
D) They are provided by both firms and households. 
A) They are used to produce goods and services. 
B) They are owned by firms. 
C) They are abundant in most economies. 
D) They are provided by both firms and households.

Question 10

In a simple circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 11

When studying the effects of public policy changes,what do economists do

Accepted Answer

A) They often falsify results if the desired effect is not reached. 
B) They may make different assumptions for the long run and the short run. 
C) They attempt to consider only the direct effects and not the indirect effects. 
D) They can immediately change policies if they are ineffective. 
A) They often falsify results if the desired effect is not reached. 
B) They may make different assumptions for the long run and the short run. 
C) They attempt to consider only the direct effects and not the indirect effects. 
D) They can immediately change policies if they are ineffective.

Question 12

Which of the following is a difficulty economists face that some other scientists do not

Accepted Answer

A) Unlike other sciences, economic studies must include the largest economic player, the government. 
B) Economists, unfortunately, receive less government funding than other scientists. 
C) Corporations are reluctant to disclose necessary information for economic research. 
D) Experiments are often difficult to conduct in economics. 
A) Unlike other sciences, economic studies must include the largest economic player, the government. 
B) Economists, unfortunately, receive less government funding than other scientists. 
C) Corporations are reluctant to disclose necessary information for economic research. 
D) Experiments are often difficult to conduct in economics.

Question 13

When is an economic outcome said to be efficient

Accepted Answer

A) if the economy is using all of the resources it has available 
B) if the economy is conserving its resources for the future 
C) if the economy is getting all it can from the scarce resources it has available 
D) if the economy is able to produce more than its current production without additional resources 
A) if the economy is using all of the resources it has available 
B) if the economy is conserving its resources for the future 
C) if the economy is getting all it can from the scarce resources it has available 
D) if the economy is able to produce more than its current production without additional resources

Question 14

Which concept is NOT illustrated by the production possibilities frontier

Accepted Answer

A) efficiency 
B) opportunity cost 
C) equity 
D) tradeoffs 
A) efficiency 
B) opportunity cost 
C) equity 
D) tradeoffs

Question 15

When is the production possibilities frontier bowed outward

Accepted Answer

A) if resources are not perfectly adaptable 
B) if the amount of resources increases 
C) if the level of technology increases 
D) if opportunity costs are constant 
A) if resources are not perfectly adaptable 
B) if the amount of resources increases 
C) if the level of technology increases 
D) if opportunity costs are constant

Question 16

What does a normative statement describe

Accepted Answer

A) how the world was in the past 
B) how the world is 
C) how the world will be in the future 
D) how the world ought to be 
A) how the world was in the past 
B) how the world is 
C) how the world will be in the future 
D) how the world ought to be

Question 17

What do economists from the Department of Finance provide

Accepted Answer

A) the annual Economic Report of the Prime Minister 
B) the Senate with the annual budget 
C) enforcement of the competition laws 
D) advice on tax policy to the Prime Minister 
A) the annual Economic Report of the Prime Minister 
B) the Senate with the annual budget 
C) enforcement of the competition laws 
D) advice on tax policy to the Prime Minister

Question 18

Which of the following is an example of a normative statement

Accepted Answer

A) If the price of a product decreases, quantity demanded increases. 
B) Reducing speed limits to 40km/hr would reduce accidents involving pedestrians. 
C) Students who take public transit to school are more concerned about the environment. 
D) An increase in minimum wages will increase unemployment. 
A) If the price of a product decreases, quantity demanded increases. 
B) Reducing speed limits to 40km/hr would reduce accidents involving pedestrians. 
C) Students who take public transit to school are more concerned about the environment. 
D) An increase in minimum wages will increase unemployment.

Question 19

Which are terms used by an economist

Accepted Answer

A) vector spaces and axioms 
B) torts and venues 
C) ego and cognitive dissonance 
D) consumer surplus and deadweight loss 
A) vector spaces and axioms 
B) torts and venues 
C) ego and cognitive dissonance 
D) consumer surplus and deadweight loss

Question 20

What do economists at the Bank of Canada do

Accepted Answer

A) analyze data on labour markets 
B) help negotiate trade agreements 
C) analyze macroeconomic developments 
D) enforce competition laws 
A) analyze data on labour markets 
B) help negotiate trade agreements 
C) analyze macroeconomic developments 
D) enforce competition laws

Exam 2: Thinking Like an Economist

Normative statements describe how the world is,while positive statements prescribe how the world should be.

Figure 2-3 -Refer to Figure 2-3.At which point or points can the economy produce

What does a relatively steep demand curve mean

Which statement about slope is NOT correct

What happens in the markets for goods and services

Why do economists make assumptions

What is the y-coordinate

What happens when economists test theories

What is a characteristic of factors of production

In a simple circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

When studying the effects of public policy changes,what do economists do

Which of the following is a difficulty economists face that some other scientists do not

When is an economic outcome said to be efficient

Which concept is NOT illustrated by the production possibilities frontier

When is the production possibilities frontier bowed outward

What does a normative statement describe

What do economists from the Department of Finance provide

Which of the following is an example of a normative statement

Which are terms used by an economist

What do economists at the Bank of Canada do

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

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