Question 1

Because it is difficult for economists to use experiments to generate data, they generally must

Accepted Answer

A)  do without data. 
B)  substitute assumptions for data when data are unavailable. 
C)  rely upon hypothetical data that were previously concocted by other economists. 
D)  use whatever data the world gives them. 
A)  do without data. 
B)  substitute assumptions for data when data are unavailable. 
C)  rely upon hypothetical data that were previously concocted by other economists. 
D)  use whatever data the world gives them.

Question 2

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

Accepted Answer

A)  If the price of a product decreases, people's willingness to buy that product will increase. 
B)  Reducing tax rates on the wealthy would benefit the nation. 
C)  If the national saving rate were to increase, so would the rate of economic growth. 
D)  The elimination of trade restrictions would increase an economy's standard of living. 
A)  If the price of a product decreases, people's willingness to buy that product will increase. 
B)  Reducing tax rates on the wealthy would benefit the nation. 
C)  If the national saving rate were to increase, so would the rate of economic growth. 
D)  The elimination of trade restrictions would increase an economy's standard of living.

Question 3

The slope of a steep upward-sloping line will be a

Accepted Answer

A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number. 
A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number.

Question 4

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 5

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A)  income 
B)  price 
C)  preferences 
D)  the availability of alternative goods 
A)  income 
B)  price 
C)  preferences 
D)  the availability of alternative goods

Question 6

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 7

Economists speaking like scientists make

Accepted Answer

A)  positive statements. 
B)  prescriptive statements. 
C)  claims about how the world should be. 
D)  More than one of the above is correct. 
A)  positive statements. 
B)  prescriptive statements. 
C)  claims about how the world should be. 
D)  More than one of the above is correct.

Question 8

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Accepted Answer

A)  Tariffs and import quotas usually reduce general economic welfare. 
B)  A large federal budget deficit has an adverse effect on the economy. 
C)  Minimum wage increases unemployment among young and unskilled workers. 
D)  All of the above are correct. 
A)  Tariffs and import quotas usually reduce general economic welfare. 
B)  A large federal budget deficit has an adverse effect on the economy. 
C)  Minimum wage increases unemployment among young and unskilled workers. 
D)  All of the above are correct.

Question 9

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 10

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

Accepted Answer

A) True 
 B)False

Question 11

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-14   Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two.
-Refer to Figure 2-14. Which point(s) on the graph is(are) unattainable given current resources and technology?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 13

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

Figure 2-17  
-Refer to Figure 2-17. The movement from point B to point C could have been caused by

Accepted Answer

A)  inflation. 
B)  a change in income. 
C)  a change in the price of grapes. 
D)  a change in the cost of producing grapes. 
A)  inflation. 
B)  a change in income. 
C)  a change in the price of grapes. 
D)  a change in the cost of producing grapes.

Question 16

In the circular-flow diagram, households and firms are the decision makers.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-23  
-Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

Accepted Answer

A) True 
 B)False

Question 18

Economists at which administrative department help enforce the nation's antitrust laws?

Accepted Answer

Department

Question 19

A relatively steep 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 20

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Because it is difficult for economists to use experiments to generate data, they generally must

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

The slope of a steep upward-sloping line will be a

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

Which of the following is not held constant when looking at an individual's demand curve?

Which of these statements about economic models is correct?

Economists speaking like scientists make

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

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.

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. Which point(s) on the graph is(are) unattainable given current resources and technology?

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

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.

Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C could have been caused by

In the circular-flow diagram, households and firms are the decision makers.

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

Economists at which administrative department help enforce the nation's antitrust laws?

A relatively steep demand curve indicates that

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

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

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