Question 1

Figure 2-15
Relationship between Price and Cups of Coffee  
-Refer to Figure 2-15. A movement from point A to point Z is called

Accepted Answer

A) a shift in demand. 
B) a movement along the demand curve. 
C) a shift in supply. 
D) a movement along the supply curve. 
A) a shift in demand. 
B) a movement along the demand curve. 
C) a shift in supply. 
D) a movement along the supply curve.

Question 2

Figure 2-7  
-Refer to Figure 2-7. Efficient production is represented by which point(s)?

Accepted Answer

A) J 
B) J, K 
C) J, K, L 
D) J, K, M 
A) J 
B) J, K 
C) J, K, L 
D) J, K, M

Question 3

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 4

When economists make positive statements, they are

Accepted Answer

A) speaking as scientists. 
B) speaking as policy advisers. 
C) making claims about how the world should be. 
D) revealing that they are very conservative in their views of how the world works. 
A) speaking as scientists. 
B) speaking as policy advisers. 
C) making claims about how the world should be. 
D) revealing that they are very conservative in their views of how the world works.

Question 5

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-14  
-Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Accepted Answer

A) True 
 B)False

Question 7

In the circular-flow diagram,

Accepted Answer

A) factors of production flow from government to firms. 
B) goods and services flow from households to firms. 
C) income paid to the factors of production flows from firms to households. 
D) spending on goods and services flows from firms to households. 
A) factors of production flow from government to firms. 
B) goods and services flow from households to firms. 
C) income paid to the factors of production flows from firms to households. 
D) spending on goods and services flows from firms to households.

Question 8

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 9

Almost all economists agree that rent control

Accepted Answer

A) has no effect on the rental income of landlords. 
B) allows the market for housing to work more efficiently. 
C) adversely affects the availability and quality of housing. 
D) is a very inexpensive way to help the most needy members of society. 
A) has no effect on the rental income of landlords. 
B) allows the market for housing to work more efficiently. 
C) adversely affects the availability and quality of housing. 
D) is a very inexpensive way to help the most needy members of society.

Question 10

Figure 2-15
Relationship between Price and Cups of Coffee  
-Refer to Figure 2-15. In the ordered pair (4, 6)

Accepted Answer

A) the x-coordinate is 4 and the y-coordinate is 6. 
B) the x-coordinate is 6 and the y-coordinate is 4. 
C) the numbers tell the location of the origin. 
D) the 4 represents the price and the 6 represents the number of cups of coffee. 
A) the x-coordinate is 4 and the y-coordinate is 6. 
B) the x-coordinate is 6 and the y-coordinate is 4. 
C) the numbers tell the location of the origin. 
D) the 4 represents the price and the 6 represents the number of cups of coffee.

Question 11

Use the following graph to answer the following questions.
a.How would point J be represented as an ordered pair?
b.What type of curve is this?
c.Does this curve show a positive or negative correlation between price and quantity?
d.Compute the slope of D1 between points J and L.
e.What is the slope of D1 between points L and N? Why would you not have to calculate this answer?
f. What is it called if we move from D1 to D2 ?
g. How do you know that the slope of D2 is the same as the slope of D1 ?

Accepted Answer

a.(20,24)
b.a demand curve
c.a negative

Question 12

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A) The price of gasoline came down sharply during the second half of 2006. 
B) If the government were to set a maximum legal price on gasoline, then there would be a shortage of gasoline. 
C) Income taxes should be reduced. 
D) The federal government obtains much of its revenue from income taxes. 
A) The price of gasoline came down sharply during the second half of 2006. 
B) If the government were to set a maximum legal price on gasoline, then there would be a shortage of gasoline. 
C) Income taxes should be reduced. 
D) The federal government obtains much of its revenue from income taxes.

Question 14

In the circular-flow diagram, firms produce

Accepted Answer

A) goods and services using factors of production. 
B) output using inputs. 
C) factors of production using goods and services. 
D) Both (a) and (b) are correct. 
A) goods and services using factors of production. 
B) output using inputs. 
C) factors of production using goods and services. 
D) Both (a) and (b) are correct.

Question 15

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A) is useless, since the real world has many countries trading many goods. 
B) can be useful only in situations involving two countries and two goods. 
C) can be useful in the classroom, but is useless in the real world. 
D) can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
A) is useless, since the real world has many countries trading many goods. 
B) can be useful only in situations involving two countries and two goods. 
C) can be useful in the classroom, but is useless in the real world. 
D) can be useful in helping economists understand the complex world of international trade involving many countries and many goods.

Question 16

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A) the respondents were almost equally divided on the propositions. 
B) the respondents favored the propositions by a slight margin. 
C) the respondents disagreed with the propositions by a slight margin. 
D) there was overwhelming endorsement of the propositions among the respondents. 
A) the respondents were almost equally divided on the propositions. 
B) the respondents favored the propositions by a slight margin. 
C) the respondents disagreed with the propositions by a slight margin. 
D) there was overwhelming endorsement of the propositions among the respondents.

Question 17

In the simple circular-flow diagram, who consumes the goods and services that firms produce?

Accepted Answer

A) households only 
B) firms only 
C) both households and firms 
D) neither households nor firms 
A) households only 
B) firms only 
C) both households and firms 
D) neither households nor firms

Question 18

Figure 2-1  
-Refer to Figure 2-1. Sonia 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 transaction directly contribute?

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 19

Figure 2-14  
-Refer to Figure 2-14. The movement from point B to point C is a(n)

Accepted Answer

A) shift of the demand curve. 
B) movement along the demand curve. 
C) indication that the price of grapes has changed. 
D) indication that the costs incurred by firms that produce grapes have changed. 
A) shift of the demand curve. 
B) movement along the demand curve. 
C) indication that the price of grapes has changed. 
D) indication that the costs incurred by firms that produce grapes have changed.

Question 20

The second number in any ordered pair is

Accepted Answer

A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope. 
A) the x-coordinate. 
B) the y-coordinate. 
C) the horizontal location of the point. 
D) the slope.

Exam 2: Thinking Like an Economist

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. A movement from point A to point Z is called

Figure 2-7 -Refer to Figure 2-7. Efficient production is represented by which point(s)?

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

When economists make positive statements, they are

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Figure 2-14 -Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

In the circular-flow diagram,

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Almost all economists agree that rent control

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. In the ordered pair (4, 6)

Economic growth causes a production possibilities frontier to shift outward.

Which of the following is an example of a normative, as opposed to positive, statement?

In the circular-flow diagram, firms produce

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

In the simple circular-flow diagram, who consumes the goods and services that firms produce?

Figure 2-1 -Refer to Figure 2-1. Sonia 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 transaction directly contribute?

Figure 2-14 -Refer to Figure 2-14. The movement from point B to point C is a(n)

The second number in any ordered pair is

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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