Question 1

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A) income 
B) price 
C) preferences 
D) the availability of alternative goods 
A) income 
B) price 
C) preferences 
D) the availability of alternative goods

Question 2

Economists view normative statements as

Accepted Answer

A) prescriptive, making a claim about how the world ought to be. 
B) descriptive, making a claim about how the world is. 
C) statements about the normal condition of the world. 
D) pessimistic, putting the worst possible interpretation on things. 
A) prescriptive, making a claim about how the world ought to be. 
B) descriptive, making a claim about how the world is. 
C) statements about the normal condition of the world. 
D) pessimistic, putting the worst possible interpretation on things.

Question 3

In addition to advising the president, one duty of the Council of Economic Advisors is to

Accepted Answer

A) prepare the federal budget. 
B) write government regulations. 
C) advise Congress on economic matters. 
D) write the annual Economic Report of the President. 
A) prepare the federal budget. 
B) write government regulations. 
C) advise Congress on economic matters. 
D) write the annual Economic Report of the President.

Question 4

The circular-flow diagram

Accepted Answer

A) is an economic model. 
B) incorporates two types of decision makers: households and firms. 
C) represents the flows of inputs, outputs, and dollars. 
D) All of the above are correct. 
A) is an economic model. 
B) incorporates two types of decision makers: households and firms. 
C) represents the flows of inputs, outputs, and dollars. 
D) All of the above are correct.

Question 5

Factors of production are

Accepted Answer

A) the mathematical calculations firms make in determining their optimal production levels. 
B) social and political conditions that affect production. 
C) the physical relationships between economic inputs and outputs. 
D) inputs into the production process. 
A) the mathematical calculations firms make in determining their optimal production levels. 
B) social and political conditions that affect production. 
C) the physical relationships between economic inputs and outputs. 
D) inputs into the production process.

Question 6

Figure 2-6  
-Refer to Figure 2-6. Unemployment could cause this economy to produce at which point(s)?

Accepted Answer

A) A, B 
B) C, D, F, G 
C) C, F, G 
D) D 
A) A, B 
B) C, D, F, G 
C) C, F, G 
D) D

Question 7

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury. 
A) Office of Management and Budget. 
B) Department of Labor. 
C) Congressional Budget Office. 
D) Department of the Treasury.

Question 8

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A) There is a great deal of agreement among economists on virtually every economic issue. 
B) There is a great deal of agreement among economists on many important economic issues. 
C) All disagreements among economists are attributable to differences in their values. 
D) All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories. 
A) There is a great deal of agreement among economists on virtually every economic issue. 
B) There is a great deal of agreement among economists on many important economic issues. 
C) All disagreements among economists are attributable to differences in their values. 
D) All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.

Question 9

The x-coordinate is the

Accepted Answer

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

Question 10

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 11

An economy's production of two goods is efficient if

Accepted Answer

A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero. 
A) all members of society consume equal portions of the goods. 
B) the goods are produced using only some of society's available resources. 
C) it is impossible to produce more of one good without producing less of the other. 
D) the opportunity cost of producing more of one good is zero.

Question 12

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 13

Figure 2-15
Relationship between Price and Cups of Coffee  
-Refer to Figure 2-15. The slope of the line containing points Y and Z is

Accepted Answer

A) -0.5. 
B) -1. 
C) -2. 
D) -4. 
A) -0.5. 
B) -1. 
C) -2. 
D) -4.

Question 14

One difference between a hypothetical benevolent king implementing the best policy and the president implementing the best policy in the real world is the president has to be concerned about

Accepted Answer

A) any misunderstandings in communicating the policy to the public. 
B) whether the policy will affect his standing among different groups in the electorate. 
C) what amendments will be suggested by members of Congress. 
D) All of the above are correct. 
A) any misunderstandings in communicating the policy to the public. 
B) whether the policy will affect his standing among different groups in the electorate. 
C) what amendments will be suggested by members of Congress. 
D) All of the above are correct.

Question 15

The goal of an economist who formulates new theories is to

Accepted Answer

A) provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. 
B) provoke stimulating debate in scientific journals. 
C) contribute to an understanding of how the world works. 
D) demonstrate that economists, like other scientists, can formulate testable theories. 
A) provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. 
B) provoke stimulating debate in scientific journals. 
C) contribute to an understanding of how the world works. 
D) demonstrate that economists, like other scientists, can formulate testable theories.

Question 16

Which markets are represented in the simple circular-flow diagram?

Accepted Answer

A) markets for goods and services and markets for financial assets 
B) markets for factors of production and markets for financial assets 
C) markets for goods and services and markets for factors of production 
D) markets for goods and services and markets for imports and exports 
A) markets for goods and services and markets for financial assets 
B) markets for factors of production and markets for financial assets 
C) markets for goods and services and markets for factors of production 
D) markets for goods and services and markets for imports and exports

Question 17

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 18

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-9
  
-Refer to Figure 2-9, Panel (a). In order to gain 2 printers by moving from point C to point D, society must sacrifice

Accepted Answer

A) 6 computers. 
B) employment. 
C) efficiency. 
D) More than one of the above is correct. 
A) 6 computers. 
B) employment. 
C) efficiency. 
D) More than one of the above is correct.

Question 20

In the circular-flow diagram, households and firms are the decision makers.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Which of the following is not held constant when looking at an individual's demand curve?

Economists view normative statements as

In addition to advising the president, one duty of the Council of Economic Advisors is to

The circular-flow diagram

Factors of production are

Figure 2-6 -Refer to Figure 2-6. Unemployment could cause this economy to produce at which point(s)?

Analysis of data on workers and those looking for work is conducted by economists at the

Which of the following statements is correct about the extent of disagreement among economists?

The x-coordinate is the

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

An economy's production of two goods is efficient if

A pie chart is a way to display information regarding two variables.

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. The slope of the line containing points Y and Z is

One difference between a hypothetical benevolent king implementing the best policy and the president implementing the best policy in the real world is the president has to be concerned about

The goal of an economist who formulates new theories is to

Which markets are represented in the simple circular-flow diagram?

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Two variables that have a negative correlation move in opposite directions.

Figure 2-9 -Refer to Figure 2-9, Panel (a). In order to gain 2 printers by moving from point C to point D, society must sacrifice

In the circular-flow diagram, households and firms are the decision makers.

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

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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