Question 1

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 2

The circular-flow diagram

Accepted Answer

A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs,outputs,and dollars. 
D)  All of the above are correct. 
A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs,outputs,and dollars. 
D)  All of the above are correct.

Question 3

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Accepted Answer

A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias. 
A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias.

Question 4

Figure 2-8
Panel (a)Panel (b)    
-Refer to Figure 2-8,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

Accepted Answer

A)  unemployment. 
B)  an improvement in donut production technology. 
C)  an improvement in coffee production technology. 
D)  an improvement in both donut and coffee production technology. 
A)  unemployment. 
B)  an improvement in donut production technology. 
C)  an improvement in coffee production technology. 
D)  an improvement in both donut and coffee production technology.

Question 5

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 single point on a graph. 
C)  two numbers that are represented by two points on a graph. 
D)  two points on a graph that are of equal distance 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 two points on a graph. 
D)  two points on a graph that are of equal distance from the origin.

Question 6

Figure 2-5  
-Refer to Figure 2-5.The opportunity cost of this economy moving from point D to point B is

Accepted Answer

A)  zero. 
B)  50 baseballs. 
C)  60 bananas. 
D)  50 baseballs and 60 bananas. 
A)  zero. 
B)  50 baseballs. 
C)  60 bananas. 
D)  50 baseballs and 60 bananas.

Question 7

With the resources it has,an economy can produce at any point on or outside the production possibilities frontier,but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 8

The art in scientific thinking -- whether in chemistry,economics,or biology -- is

Accepted Answer

A)  the design and implementation of laboratory experiments. 
B)  knowing when to stop collecting data and when to start analyzing the data. 
C)  deciding which assumptions to make. 
D)  being able to mathematically model natural phenomena. 
A)  the design and implementation of laboratory experiments. 
B)  knowing when to stop collecting data and when to start analyzing the data. 
C)  deciding which assumptions to make. 
D)  being able to mathematically model natural phenomena.

Question 9

Figure 2-4  
-Refer to Figure 2-4.The opportunity cost of obtaining 20 additional toasters by moving from point D to point C is

Accepted Answer

A)  0 toothbrushes. 
B)  10 toothbrushes. 
C)  50 toothbrushes. 
D)  None of the above;the economy cannot move from point D to point C. 
A)  0 toothbrushes. 
B)  10 toothbrushes. 
C)  50 toothbrushes. 
D)  None of the above;the economy cannot move from point D to point C.

Question 10

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

Accepted Answer

A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin 
A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin

Question 11

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)  households provide firms with savings for investment. 
B)  households provide firms with labor,land,and capital. 
C)  firms provide households with output. 
D)  firms provide households with profit. 
A)  households provide firms with savings for investment. 
B)  households provide firms with labor,land,and capital. 
C)  firms provide households with output. 
D)  firms provide households with profit.

Question 12

Figure 2-8
Panel (a)Panel (b)    
-Refer to Figure 2-8,Panel (a)and Panel (b).Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a)to Panel (b)?

Accepted Answer

A)  the tradeoff between the production of donuts and coffee changes 
B)  the opportunity cost of a cup of coffee is higher at all levels of coffee production 
C)  production of 4 donuts and 2 cups of coffee becomes possible 
D)  production of 1 donut and 4 cups of coffee becomes efficient 
A)  the tradeoff between the production of donuts and coffee changes 
B)  the opportunity cost of a cup of coffee is higher at all levels of coffee production 
C)  production of 4 donuts and 2 cups of coffee becomes possible 
D)  production of 1 donut and 4 cups of coffee becomes efficient

Question 13

In the circular-flow diagram,

Accepted Answer

A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households. 
A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households.

Question 14

Figure 2-12  
-Refer to Figure 2-12.Cups of coffee per day and the hours that someone can go without sleep appear to 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 15

The Council of Economic Advisers

Accepted Answer

A)  was created in 1776 and consists of three members and a staff of several dozen economists. 
B)  was created in 1776 and consists of thirty members and a staff of a dozen economists. 
C)  was created in 1946 and consists of three members and a staff of several dozen economists. 
D)  was created in 1946 and consists of thirty members and a staff of a dozen economists. 
A)  was created in 1776 and consists of three members and a staff of several dozen economists. 
B)  was created in 1776 and consists of thirty members and a staff of a dozen economists. 
C)  was created in 1946 and consists of three members and a staff of several dozen economists. 
D)  was created in 1946 and consists of thirty members and a staff of a dozen economists.

Question 16

It is possible for an economy to increase its production of both goods if the economy

Accepted Answer

A)  moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. 
B)  moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. 
C)  moves in either direction along its production possibilities frontier and the frontier is a straight line. 
D)  moves from a situation of inefficient production to a situation of efficient production. 
A)  moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. 
B)  moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. 
C)  moves in either direction along its production possibilities frontier and the frontier is a straight line. 
D)  moves from a situation of inefficient production to a situation of efficient production.

Question 17

Figure 2-14  
-Refer to Figure 2-14.Given the technology available for manufacturing doghouses and dishwashers,this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 18

Which of these statements about economic models is correct?

Accepted Answer

A)  For economists,economic models provide insights about the world. 
B)  Economic models are built with assumptions. 
C)  Economic models are often composed of equations and diagrams. 
D)  All of the above are correct. 
A)  For economists,economic models provide insights about the world. 
B)  Economic models are built with assumptions. 
C)  Economic models are often composed of equations and diagrams. 
D)  All of the above are correct.

Question 19

Figure 2-1  
-Refer to Figure 2-1.Julio buys a new pair of shoes at a shoe store.To which of the arrows does this transaction directly contribute?

Accepted Answer

A)  A only 
B)  A and B 
C)  C only 
D)  C and D 
A)  A only 
B)  A and B 
C)  C only 
D)  C and D

Question 20

In the circular-flow diagram,

Accepted Answer

A)  taxes flow from households to firms,and transfer payments flow from firms to households. 
B)  income payments flow from firms to households,and sales revenue flows from households to firms. 
C)  resources flow from firms to households,and goods and services flow from households to firms. 
D)  inputs and outputs flow in the same direction as the flow of dollars,from firms to households. 
A)  taxes flow from households to firms,and transfer payments flow from firms to households. 
B)  income payments flow from firms to households,and sales revenue flows from households to firms. 
C)  resources flow from firms to households,and goods and services flow from households to firms. 
D)  inputs and outputs flow in the same direction as the flow of dollars,from firms to households.

Exam 2: Thinking Like an Economist

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

The circular-flow diagram

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Figure 2-8 Panel (a)Panel (b) -Refer to Figure 2-8,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

An ordered pair is

Figure 2-5 -Refer to Figure 2-5.The opportunity cost of this economy moving from point D to point B is

With the resources it has,an economy can produce at any point on or outside the production possibilities frontier,but it cannot produce at points inside the frontier.

The art in scientific thinking -- whether in chemistry,economics,or biology -- is

Figure 2-4 -Refer to Figure 2-4.The opportunity cost of obtaining 20 additional toasters by moving from point D to point C is

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

In the markets for goods and services in the circular-flow diagram,

Figure 2-8 Panel (a)Panel (b) -Refer to Figure 2-8,Panel (a)and Panel (b).Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a)to Panel (b)?

In the circular-flow diagram,

Figure 2-12 -Refer to Figure 2-12.Cups of coffee per day and the hours that someone can go without sleep appear to have

The Council of Economic Advisers

It is possible for an economy to increase its production of both goods if the economy

Figure 2-14 -Refer to Figure 2-14.Given the technology available for manufacturing doghouses and dishwashers,this economy does not have enough of the factors of production to support the level of output represented by point C.

Which of these statements about economic models is correct?

Figure 2-1 -Refer to Figure 2-1.Julio buys a new pair of shoes at a shoe store.To which of the arrows does this transaction directly contribute?

In the circular-flow diagram,

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

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