Question 1

Figure 2-14  
-Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-7  
-Refer to Figure 2-7. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Accepted Answer

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

Question 3

Figure 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of income payments?

Accepted Answer

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

Question 4

Figure 2-11  
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B can best be described as

Accepted Answer

A) a downturn in the economy. 
B) economic growth. 
C) an enhancement of equality. 
D) an improvement in the allocation of resources. 
A) a downturn in the economy. 
B) economic growth. 
C) an enhancement of equality. 
D) an improvement in the allocation of resources.

Question 5

Figure 2-6  
-Refer to Figure 2-6. Efficient production is represented by which point(s)?

Accepted Answer

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

Question 6

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 7

Economists use some familiar terms in specialized ways

Accepted Answer

A) to make the subject sound more complex than it is. 
B) because every respectable field of study has its own language. 
C) to provide a new and useful way of thinking about the world. 
D) because it was too difficult to come up with new terms. 
A) to make the subject sound more complex than it is. 
B) because every respectable field of study has its own language. 
C) to provide a new and useful way of thinking about the world. 
D) because it was too difficult to come up with new terms.

Question 8

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) Gasoline prices ought to be lower than they are now. 
B) The federal government should raise taxes on wealthy people. 
C) The social security system is a good system and it deserves to be preserved as it is. 
D) All of the above are normative statements. 
A) Gasoline prices ought to be lower than they are now. 
B) The federal government should raise taxes on wealthy people. 
C) The social security system is a good system and it deserves to be preserved as it is. 
D) All of the above are normative statements.

Question 10

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 11

In the circular-flow diagram, in the markets for

Accepted Answer

A) goods and services, households and firms are both sellers. 
B) goods and services, households are sellers and firms are buyers. 
C) the factors of production, households are sellers and firms are buyers. 
D) the factors of production, households and firms are both buyers. 
A) goods and services, households and firms are both sellers. 
B) goods and services, households are sellers and firms are buyers. 
C) the factors of production, households are sellers and firms are buyers. 
D) the factors of production, households and firms are both buyers.

Question 12

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A) A country produces only two goods or types of goods. 
B) Technology does not change. 
C) The amount of available resources does not change. 
D) There is a fixed quantity of money. 
A) A country produces only two goods or types of goods. 
B) Technology does not change. 
C) The amount of available resources does not change. 
D) There is a fixed quantity of money.

Question 13

Figure 2-5  
-Refer to Figure 2-5. A movement from point C to point D could be caused by

Accepted Answer

A) unemployment. 
B) a decrease in society's preference for sweaters. 
C) fewer resources available for production of sweaters. 
D) All of the above are correct. 
A) unemployment. 
B) a decrease in society's preference for sweaters. 
C) fewer resources available for production of sweaters. 
D) All of the above are correct.

Question 14

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 15

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories. 
A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories.

Question 16

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

Accepted Answer

A) True 
 B)False

Question 17

For economists, conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 18

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A) performing an experiment in an economic system. 
B) applying mathematical methods to economic analysis. 
C) analyzing available data. 
D) formulating theories about economic events. 
A) performing an experiment in an economic system. 
B) applying mathematical methods to economic analysis. 
C) analyzing available data. 
D) formulating theories about economic events.

Question 19

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A) if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption 
B) once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other 
C) for an economy to consume more of one good, it must stop consuming the other good entirely 
D) for an economy to produce and consume goods, it must sacrifice environmental quality 
A) if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption 
B) once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other 
C) for an economy to consume more of one good, it must stop consuming the other good entirely 
D) for an economy to produce and consume goods, it must sacrifice environmental quality

Question 20

Figure 2-15
Relationship between Price and Cups of Coffee  
-Refer to Figure 2-15. Which of the following could result in a movement from point A to point B?

Accepted Answer

A) a change in income 
B) a change in preferences 
C) a change in the price of coffee 
D) a change in the price of tea 
A) a change in income 
B) a change in preferences 
C) a change in the price of coffee 
D) a change in the price of tea

Exam 2: Thinking Like an Economist

Figure 2-14 -Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Figure 2-7 -Refer to Figure 2-7. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of income payments?

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B can best be described as

Figure 2-6 -Refer to Figure 2-6. Efficient production is represented by which point(s)?

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Economists use some familiar terms in specialized ways

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

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

When a variable that is named on an axis of a graph changes, the curve shifts.

In the circular-flow diagram, in the markets for

Which of the following is not an assumption of the productions possibilities frontier?

Figure 2-5 -Refer to Figure 2-5. A movement from point C to point D could be caused by

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Instead of conducting laboratory experiments to generate data to test their theories, economists often

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

For economists, conducting experiments is often difficult and sometimes impossible.

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Which of the following trade-offs does the production possibilities frontier illustrate?

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. Which of the following could result in a movement from point A to point B?

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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