Question 1

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Accepted Answer

A)  the effect of an increase in the cigarette tax on smokers 
B)  the effect of foreign competition on the domestic textile industry 
C)  the effect of a war on automobile prices 
D)  the effect of an increase in the minimum wage on an economy's overall rate of unemployment 
A)  the effect of an increase in the cigarette tax on smokers 
B)  the effect of foreign competition on the domestic textile industry 
C)  the effect of a war on automobile prices 
D)  the effect of an increase in the minimum wage on an economy's overall rate of unemployment

Question 2

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 3

When economists are trying to explain the world,they are

Accepted Answer

A)  scientists. 
B)  policy advisers. 
C)  in the realm of microeconomics rather than macroeconomics. 
D)  in the realm of normative economics rather than positive economics. 
A)  scientists. 
B)  policy advisers. 
C)  in the realm of microeconomics rather than macroeconomics. 
D)  in the realm of normative economics rather than positive economics.

Question 4

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending 
A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending

Question 5

In the circular-flow diagram,factors of production include land,labor,and capital.

Accepted Answer

A) True 
 B)False

Question 6

Points inside the production possibilities frontier represent inefficient levels of production.

Accepted Answer

A) True 
 B)False

Question 7

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Accepted Answer

A) True 
 B)False

Question 8

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)  using all of the scarce resources it has available. 
B)  conserving on resources,rather than using all available resources. 
C)  getting all it can get from the scarce resources it has available. 
D)  able to produce more than what is currently being produced without additional resources. 
A)  using all of the scarce resources it has available. 
B)  conserving on resources,rather than using all available resources. 
C)  getting all it can get from the scarce resources it has available. 
D)  able to produce more than what is currently being produced without additional resources.

Question 9

Figure 2-2  
-Refer to Figure 2-2.Alisha regularly buys fruits and vegetables at a grocery store.Santo regularly pays a lawn-care company to mow his lawn.If the flow of fruits and vegetables from the grocery store to Alisha is represented by an arrow from Box C to Box B of this circular-flow diagram,then the money paid by Santo to the lawn-care company is represented by an arrow

Accepted Answer

A)  from Box A to Box D. 
B)  from Box B to Box C. 
C)  from Box C to Box B. 
D)  from Box D to Box A. 
A)  from Box A to Box D. 
B)  from Box B to Box C. 
C)  from Box C to Box B. 
D)  from Box D to Box A.

Question 10

A relatively flat demand curve indicates that

Accepted Answer

A)  quantity demanded will adjust only slightly to a price change. 
B)  quantity demanded will adjust significantly to a price change. 
C)  quantity demanded will not adjust to a price change. 
D)  the change in quantity demanded will exactly equal a change in price. 
A)  quantity demanded will adjust only slightly to a price change. 
B)  quantity demanded will adjust significantly to a price change. 
C)  quantity demanded will not adjust to a price change. 
D)  the change in quantity demanded will exactly equal a change in price.

Question 11

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 12

Suppose an economy produces two goods,food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 50 units of food and 30 machines.This year,it is producing 55 units of food and 33 machines.Which of the following events could not explain the increase in output?

Accepted Answer

A)  a reduction in unemployment 
B)  an increase in available labor 
C)  an improvement in technology 
D)  Any of these events could explain the increase in output. 
A)  a reduction in unemployment 
B)  an increase in available labor 
C)  an improvement in technology 
D)  Any of these events could explain the increase in output.

Question 13

In the ordered pair (10,30),10 is the horizontal location of the point and 30 is the vertical location of the point.

Accepted Answer

A) True 
 B)False

Question 14

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)  would likely be made by an economist acting as a policy advisor. 
B)  would require values and data in order to be evaluated. 
C)  would require data but not values in order to be evaluated. 
D)  could not be evaluated by economists acting as scientists. 
A)  would likely be made by an economist acting as a policy advisor. 
B)  would require values and data in order to be evaluated. 
C)  would require data but not values in order to be evaluated. 
D)  could not be evaluated by economists acting as scientists.

Question 15

Since economists cannot use natural experiments offered by history,they must use carefully constructed laboratory experiments instead.

Accepted Answer

A) True 
 B)False

Question 16

When a production possibilities frontier is bowed outward,the opportunity cost of the first good in terms of the second good is higher when the economy is producing much of the second good and little of the first good than it is when the economy is producing little of the second good and much of the first good.

Accepted Answer

A) True 
 B)False

Question 17

A model can be accurately described as a

Accepted Answer

A)  theoretical abstraction with very little value. 
B)  device that is useful only to the people who created it. 
C)  realistic and carefully constructed theory. 
D)  simplification of reality. 
A)  theoretical abstraction with very little value. 
B)  device that is useful only to the people who created it. 
C)  realistic and carefully constructed theory. 
D)  simplification of reality.

Question 18

In the simple circular-flow diagram,households

Accepted Answer

A)  are the only decision makers. 
B)  own the factors of production. 
C)  are buyers of inputs. 
D)  consume only some of the goods and services that firms produce. 
A)  are the only decision makers. 
B)  own the factors of production. 
C)  are buyers of inputs. 
D)  consume only some of the goods and services that firms produce.

Question 19

In the circular-flow diagram,

Accepted Answer

A)  firms own the factors of production. 
B)  the factors of production are labor,land,and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct. 
A)  firms own the factors of production. 
B)  the factors of production are labor,land,and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct.

Question 20

If an economy can produce more of one good without giving up any of another good,then the economy's current production point is inefficient.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

The president of the United States receives tax policy advice from economists in the

When economists are trying to explain the world,they are

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

In the circular-flow diagram,factors of production include land,labor,and capital.

Points inside the production possibilities frontier represent inefficient levels of production.

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

An economic outcome is said to be efficient if the economy is

A relatively flat demand curve indicates that

When economists make positive statements,they are

In the ordered pair (10,30),10 is the horizontal location of the point and 30 is the vertical location of the point.

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Since economists cannot use natural experiments offered by history,they must use carefully constructed laboratory experiments instead.

A model can be accurately described as a

In the simple circular-flow diagram,households

In the circular-flow diagram,

If an economy can produce more of one good without giving up any of another good,then the economy's current production point is inefficient.

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality 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 Basic Tools of Finance

Unemployment

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 Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters