Question 1

Figure 2-6  
-How can the production possibilities frontiers shift outward?

Accepted Answer

A) if government increases the amount of money in the economy 
B) if there is an increase in technology 
C) if resources can be moved from the production of one good to another 
D) if opportunity costs are reduced 
A) if government increases the amount of money in the economy 
B) if there is an increase in technology 
C) if resources can be moved from the production of one good to another 
D) if opportunity costs are reduced

Question 2

What would be the best statement about a theory based on assumptions that are NOT true?

Accepted Answer

A) If the assumptions underlying the theory are not true, the theory must be false. 
B) The ideas may be good in theory, but not in practice. 
C) The theory is a good one if it helps us to understand how the world works. 
D) The theory is a good one if no logical mistakes were made in developing it. 
A) If the assumptions underlying the theory are not true, the theory must be false. 
B) The ideas may be good in theory, but not in practice. 
C) The theory is a good one if it helps us to understand how the world works. 
D) The theory is a good one if no logical mistakes were made in developing it.

Question 3

Figure 2-9  
-Refer to Figure 2-9. What do cups of coffee per day and the hours that someone can go without sleep have?

Accepted Answer

A) a positive correlation 
B) a negative correlation 
C) a random correlation 
D) no correlation 
A) a positive correlation 
B) a negative correlation 
C) a random correlation 
D) no correlation

Question 4

What famous economist said: "The ideas of economists and political philosophers are more powerful than commonly understood"?

Accepted Answer

A) Gregory Mankiw 
B) John Maynard Keynes 
C) Paul Krugman 
D) David Ricardo 
A) Gregory Mankiw 
B) John Maynard Keynes 
C) Paul Krugman 
D) David Ricardo

Question 5

When do you know an economist has crossed the line from scientist to policy adviser?

Accepted Answer

A) when he explains just the facts 
B) when he makes positive statements 
C) when he makes normative statements 
D) when he cannot reach a conclusion 
A) when he explains just the facts 
B) when he makes positive statements 
C) when he makes normative statements 
D) when he cannot reach a conclusion

Question 6

For economists, what are the two types of statements about the world?

Accepted Answer

A) assumptions and theories 
B) true statements and false statements 
C) specific statements and general statements 
D) positive statements and normative statements 
A) assumptions and theories 
B) true statements and false statements 
C) specific statements and general statements 
D) positive statements and normative statements

Question 7

Draw a production possibilities frontier showing increasing opportunity cost for hammers and horseshoes.
a.On a graph, identify the area of feasible outcomes and the area of unfeasible outcomes.
b.On the graph, label a point that is efficient as point "E" and a point that is inefficient as point "I".
c.On a graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy.
d.On a graph for hammers and horseshoes, illustrate the effect a new computerized assembly line in the production of hammers would have.

Accepted Answer

@#IMG-DLM& The graph on the le

Question 8

What is an ordered pair?

Accepted Answer

A) the process of checking calculations twice before placing them on a graph 
B) two numbers that can be represented by a single point on a graph 
C) two numbers that are represented by side-by-side points on a graph 
D) two points on a graph that are equal distances from the origin 
A) the process of checking calculations twice before placing them on a graph 
B) two numbers that can be represented by a single point on a graph 
C) two numbers that are represented by side-by-side points on a graph 
D) two points on a graph that are equal distances from the origin

Question 9

How do economists consider normative statements?

Accepted Answer

A) descriptive, making a claim about how the world is 
B) statements about the normal condition of the world 
C) prescriptive, making a claim about how the world ought to be 
D) statements that establish production goals for the economy 
A) descriptive, making a claim about how the world is 
B) statements about the normal condition of the world 
C) prescriptive, making a claim about how the world ought to be 
D) statements that establish production goals for the economy

Question 10

What is an example of a product that experiences infrequent price changes?

Accepted Answer

A) stocks on the Toronto Stock Exchange 
B) gasoline prices 
C) the newsstand price of magazines 
D) electricity 
A) stocks on the Toronto Stock Exchange 
B) gasoline prices 
C) the newsstand price of magazines 
D) electricity

Question 11

Who said, "The whole of science is nothing more than the refinement of everyday thinking."?

Accepted Answer

A) Isaac Newton 
B) Albert Einstein 
C) Sigmund Freud 
D) Stephen Hawking. 
A) Isaac Newton 
B) Albert Einstein 
C) Sigmund Freud 
D) Stephen Hawking.

Question 12

Figure 2-2  
-Refer to Figure 2-2. Which is true about money spent by households?

Accepted Answer

A) it is earned from the sale of factors of production. 
B) it becomes profit to firms. 
C) it cannot be tracked in the diagram. 
D) it is used to purchase factors of production. 
A) it is earned from the sale of factors of production. 
B) it becomes profit to firms. 
C) it cannot be tracked in the diagram. 
D) it is used to purchase factors of production.

Question 13

Figure 2-6  
-When a production possibilities frontier shifts outward, what concept is being demonstrated?

Accepted Answer

A) tradeoffs 
B) efficiency 
C) economic growth 
D) opportunity cost 
A) tradeoffs 
B) efficiency 
C) economic growth 
D) opportunity cost

Question 14

Table 2-1
Production Possibilities for Toyland
  
-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Accepted Answer

A) 200 dolls 
B) 150 dolls 
C) 100 dolls 
D) 50 dolls 
A) 200 dolls 
B) 150 dolls 
C) 100 dolls 
D) 50 dolls

Question 15

Bill has noticed that increases in unemployment insurance claims are associated with recessions, and therefore advocates limits on unemployment insurance so as to prevent recessions. Martha has noticed that most drug addicts once attended schools, and therefore advocates getting rid of schools so as to prevent drug addiction. What do we know about the reasoning of Bill and Martha?

Accepted Answer

A) The reasoning of both Bill and Martha suffers from the omitted variable problem. 
B) The reasoning of both Bill and Martha suffers from the reverse causality problem. 
C) Bill's reasoning suffers from the reverse causality problem and Martha's reasoning suffers from the omitted variable problem. 
D) Martha's reasoning suffers from the reverse causality problem and Bill's reasoning suffers from the omitted variable problem. 
A) The reasoning of both Bill and Martha suffers from the omitted variable problem. 
B) The reasoning of both Bill and Martha suffers from the reverse causality problem. 
C) Bill's reasoning suffers from the reverse causality problem and Martha's reasoning suffers from the omitted variable problem. 
D) Martha's reasoning suffers from the reverse causality problem and Bill's reasoning suffers from the omitted variable problem.

Question 16

Table 2-1
Production Possibilities for Toyland
  
-Refer to Table 2-1. Which of the following statements accurately describes the production possibilities for Toyland?

Accepted Answer

A) The opportunity cost of an additional 100 dolls is 50 fire trucks. 
B) The opportunity cost of an additional 100 dolls is 100 fire trucks. 
C) Without additional information, it is impossible to determine the opportunity cost of an additional doll. 
D) The opportunity cost of an additional 100 dolls increases as more dolls are produced. 
A) The opportunity cost of an additional 100 dolls is 50 fire trucks. 
B) The opportunity cost of an additional 100 dolls is 100 fire trucks. 
C) Without additional information, it is impossible to determine the opportunity cost of an additional doll. 
D) The opportunity cost of an additional 100 dolls increases as more dolls are produced.

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

Figure 2-11  
-Refer to Figure 2-11. Points A, B, and D represent feasible or attainable outcomes for society.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-6  
-Refer to Figure 2-6. What is the opportunity cost to society of moving from point B to point D?

Accepted Answer

A) 100 bananas 
B) 50 baseballs 
C) both 100 bananas and 50 baseballs 
D) nothing, since this economy would have unused resources 
A) 100 bananas 
B) 50 baseballs 
C) both 100 bananas and 50 baseballs 
D) nothing, since this economy would have unused resources

Question 20

When economists are speaking as policy advisors, which statements are they more likely to use?

Accepted Answer

A) normative statements 
B) positive statements 
C) objective statements 
D) descriptive statements 
A) normative statements 
B) positive statements 
C) objective statements 
D) descriptive statements

Figure 2-6 -How can the production possibilities frontiers shift outward?

What would be the best statement about a theory based on assumptions that are NOT true?

Figure 2-9 -Refer to Figure 2-9. What do cups of coffee per day and the hours that someone can go without sleep have?

What famous economist said: "The ideas of economists and political philosophers are more powerful than commonly understood"?

When do you know an economist has crossed the line from scientist to policy adviser?

For economists, what are the two types of statements about the world?

What is an ordered pair?

How do economists consider normative statements?

What is an example of a product that experiences infrequent price changes?

Who said, "The whole of science is nothing more than the refinement of everyday thinking."?

Figure 2-2 -Refer to Figure 2-2. Which is true about money spent by households?

Figure 2-6 -When a production possibilities frontier shifts outward, what concept is being demonstrated?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1. Which of the following statements accurately describes the production possibilities for Toyland?

What do economists from the Department of Finance provide?

Figure 2-11 -Refer to Figure 2-11. Points A, B, and D represent feasible or attainable outcomes for society.

Figure 2-6 -Refer to Figure 2-6. What is the opportunity cost to society of moving from point B to point D?

When economists are speaking as policy advisors, which statements are they more likely to use?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 2: Thinking Like an Economist

Figure 2-6 -How can the production possibilities frontiers shift outward?

What would be the best statement about a theory based on assumptions that are NOT true?

Figure 2-9 -Refer to Figure 2-9. What do cups of coffee per day and the hours that someone can go without sleep have?

What famous economist said: "The ideas of economists and political philosophers are more powerful than commonly understood"?

When do you know an economist has crossed the line from scientist to policy adviser?

For economists, what are the two types of statements about the world?

What is an ordered pair?

How do economists consider normative statements?

What is an example of a product that experiences infrequent price changes?

Who said, "The whole of science is nothing more than the refinement of everyday thinking."?

Figure 2-2 -Refer to Figure 2-2. Which is true about money spent by households?

Figure 2-6 -When a production possibilities frontier shifts outward, what concept is being demonstrated?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1. Which of the following statements accurately describes the production possibilities for Toyland?

What do economists from the Department of Finance provide?

Figure 2-11 -Refer to Figure 2-11. Points A, B, and D represent feasible or attainable outcomes for society.

Figure 2-6 -Refer to Figure 2-6. What is the opportunity cost to society of moving from point B to point D?

When economists are speaking as policy advisors, which statements are they more likely to use?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters