Question 1

Most economic theories have been developed and tested by using controlled experiments.

Accepted Answer

A) True 
 B)False

Question 2

Graph 2-1
  
-Refer to Graph 2-1. In the graph shown, the opportunity cost to the economy of moving from point A to point B is 10 units of concrete.

Accepted Answer

A) True 
 B)False

Question 3

An ordered pair is:

Accepted Answer

A)  the process of checking calculations twice before placing them on a graph 
B)  two numbers that can be represented by a point on a graph 
C)  the inventory system used to keep track of right and left shoes, etc. 
D)  two halves of a whole 
A)  the process of checking calculations twice before placing them on a graph 
B)  two numbers that can be represented by a point on a graph 
C)  the inventory system used to keep track of right and left shoes, etc. 
D)  two halves of a whole

Question 4

Which is the best statement about the roles of economists?

Accepted Answer

A)  economists are best viewed as policymakers 
B)  economists are best viewed as scientists 
C)  in trying to explain the world, economists are scientists; in trying to improve the world, they are policymakers 
D)  in trying to explain the world, economists are policymakers; in trying to improve the world, they are scientists 
A)  economists are best viewed as policymakers 
B)  economists are best viewed as scientists 
C)  in trying to explain the world, economists are scientists; in trying to improve the world, they are policymakers 
D)  in trying to explain the world, economists are policymakers; in trying to improve the world, they are scientists

Question 5

Graph 2-3
  
-Refer to Graph 2-3. On the production possibilities frontier shown, at which point or points is the economy efficient?

Accepted Answer

A)  A, B, C 
B)  A, C, F 
C)  E 
D)  D 
A)  A, B, C 
B)  A, C, F 
C)  E 
D)  D

Question 6

Macroeconomics approaches the study of economics from the viewpoint of:

Accepted Answer

A)  consumer behaviour 
B)  the labour market 
C)  government taxation and spending policies 
D)  the entire economy 
A)  consumer behaviour 
B)  the labour market 
C)  government taxation and spending policies 
D)  the entire economy

Question 7

An economy will always operate at some point on its production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 8

Graph 2-1
  
-Refer to Graph 2-1. In the graph shown, points A, B and D represent efficient outcomes for society.

Accepted Answer

A) True 
 B)False

Question 9

Use the demand curve below to answer the following questions.
Graph 2-15
   a. How would point A 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 the curve between points A and 
B.

Accepted Answer

a. (15, 8).
b. a dem

Question 10

The circular-flow diagram has two loops to illustrate the flows of:

Accepted Answer

A)  goods and the flow of dollars 
B)  energy and wastes 
C)  dollars and the flow of services 
D)  dollars and the flow of goods and services 
A)  goods and the flow of dollars 
B)  energy and wastes 
C)  dollars and the flow of services 
D)  dollars and the flow of goods and services

Question 11

In a circular-flow diagram, the relationships shown are only those that involve the flow of real goods and services.

Accepted Answer

A) True 
 B)False

Question 12

For economists, statements about the world are of two types:

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 13

Normative statements are:

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 which 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 which establish production goals for the economy

Question 14

Economic models are generally constructed with:

Accepted Answer

A)  tubes and valves 
B)  assumptions only 
C)  plastic pieces 
D)  diagrams and equations 
A)  tubes and valves 
B)  assumptions only 
C)  plastic pieces 
D)  diagrams and equations

Question 15

Graph 2-3
  
-Refer to Graph 2-3. On the production possibilities frontier shown, at which point or points is the economy inefficient?

Accepted Answer

A)  A, B, C 
B)  E, F 
C)  B 
D)  D 
A)  A, B, C 
B)  E, F 
C)  B 
D)  D

Question 16

Select the microeconomic statement from the following:

Accepted Answer

A)  real domestic output was $100 billion last year 
B)  employment levels grew by two per cent in the last six months 
C)  fish prices rose in response to increases in fuel costs 
D)  the inflation rate was 1.8 per cent in the last quarter 
A)  real domestic output was $100 billion last year 
B)  employment levels grew by two per cent in the last six months 
C)  fish prices rose in response to increases in fuel costs 
D)  the inflation rate was 1.8 per cent in the last quarter

Question 17

Scientific models are designed to simplify reality because they are built with simplifying assumptions.

Accepted Answer

A) True 
 B)False

Question 18

In the circular-flow diagram:

Accepted Answer

A)  firms are sellers in the resource market and the product market 
B)  households are sellers in the resource market 
C)  firms are buyers in the product market 
D)  spending on goods and services flow from firms to households 
A)  firms are sellers in the resource market and the product market 
B)  households are sellers in the resource market 
C)  firms are buyers in the product market 
D)  spending on goods and services flow from firms to households

Question 19

Graph 2-7
  
-Refer to Graph 2-7. What is the opportunity cost to society of the movement from point C to point B, given the production possibilities frontier shown?

Accepted Answer

A)  650 pretzels 
B)  500 pretzels 
C)  300 pretzels 
D)  150 pretzels 
A)  650 pretzels 
B)  500 pretzels 
C)  300 pretzels 
D)  150 pretzels

Question 20

A model:

Accepted Answer

A)  simplifies reality 
B)  can explain how the economy is organised 
C)  assumes away irrelevant details 
D)  does all of the above 
A)  simplifies reality 
B)  can explain how the economy is organised 
C)  assumes away irrelevant details 
D)  does all of the above

Exam 2: Thinking Like an Economist

Most economic theories have been developed and tested by using controlled experiments.

Graph 2-1 -Refer to Graph 2-1. In the graph shown, the opportunity cost to the economy of moving from point A to point B is 10 units of concrete.

An ordered pair is:

Which is the best statement about the roles of economists?

Graph 2-3 -Refer to Graph 2-3. On the production possibilities frontier shown, at which point or points is the economy efficient?

Macroeconomics approaches the study of economics from the viewpoint of:

An economy will always operate at some point on its production possibilities curve.

Graph 2-1 -Refer to Graph 2-1. In the graph shown, points A, B and D represent efficient outcomes for society.

The circular-flow diagram has two loops to illustrate the flows of:

In a circular-flow diagram, the relationships shown are only those that involve the flow of real goods and services.

For economists, statements about the world are of two types:

Normative statements are:

Economic models are generally constructed with:

Graph 2-3 -Refer to Graph 2-3. On the production possibilities frontier shown, at which point or points is the economy inefficient?

Select the microeconomic statement from the following:

Scientific models are designed to simplify reality because they are built with simplifying assumptions.

In the circular-flow diagram:

Graph 2-7 -Refer to Graph 2-7. What is the opportunity cost to society of the movement from point C to point B, given the production possibilities frontier shown?

A model:

Ten Lessons From 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

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

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 Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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