Question 1

Figure 2-10
Panel (a) Panel (b)
    
-Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by

Accepted Answer

A)  economic growth. 
B)  unemployment. 
C)  an improvement in efficiency. 
D)  an advance in production technology. 
A)  economic growth. 
B)  unemployment. 
C)  an improvement in efficiency. 
D)  an advance in production technology.

Question 2

Figure 2-5  
-Refer to Figure 2-5. Inefficient production is represented by which point(s)?

Accepted Answer

A)  A, B 
B)  C 
C)  C, D 
D)  D 
A)  A, B 
B)  C 
C)  C, D 
D)  D

Question 3

A statement describing how the world should be

Accepted Answer

A)  is a normative statement. 
B)  is a positive statement. 
C)  would only be made by an economist speaking as a scientist. 
D)  would only be made by an economist employed by the government. 
A)  is a normative statement. 
B)  is a positive statement. 
C)  would only be made by an economist speaking as a scientist. 
D)  would only be made by an economist employed by the government.

Question 4

The art in scientific thinking is

Accepted Answer

A)  finding the right problem to study. 
B)  deciding which assumptions to make. 
C)  the ability to make an abstract subject easy to understand. 
D)  not something in which economists have to be skilled. 
A)  finding the right problem to study. 
B)  deciding which assumptions to make. 
C)  the ability to make an abstract subject easy to understand. 
D)  not something in which economists have to be skilled.

Question 5

Figure 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 6

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-11  
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A)  simultaneous technological advances in the book and DVD industries. 
B)  a reallocation of resources away from the production of DVDs and toward the production of books. 
C)  economic growth. 
D)  All of the above are correct. 
A)  simultaneous technological advances in the book and DVD industries. 
B)  a reallocation of resources away from the production of DVDs and toward the production of books. 
C)  economic growth. 
D)  All of the above are correct.

Question 8

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 9

When economists make

Accepted Answer

A)  positive statements, they are speaking not as policy advisers but as scientists. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as policy advisers but as scientists. 
D)  normative statements, they are speaking not as policy advisers but as model-builders. 
A)  positive statements, they are speaking not as policy advisers but as scientists. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as policy advisers but as scientists. 
D)  normative statements, they are speaking not as policy advisers but as model-builders.

Question 10

Economists, like mathematicians, physicists, and biologists,

Accepted Answer

A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct. 
A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct.

Question 11

Table 2-5
  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

Accepted Answer

A)  800 bushels of corn 
B)  600 bushels of corn 
C)  400 bushels of corn 
D)  400 bushels of wheat 
A)  800 bushels of corn 
B)  600 bushels of corn 
C)  400 bushels of corn 
D)  400 bushels of wheat

Question 12

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 13

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Accepted Answer

A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists. 
A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists.

Question 14

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 15

Where can an economy not produce?

Accepted Answer

A)  inside its production possibilities frontier 
B)  on its production possibilities frontier 
C)  outside its production possibilities frontier 
D)  at the endpoints of its production possibilities frontier 
A)  inside its production possibilities frontier 
B)  on its production possibilities frontier 
C)  outside its production possibilities frontier 
D)  at the endpoints of its production possibilities frontier

Question 16

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Accepted Answer

A)  spending. 
B)  revenue. 
C)  income. 
D)  wages, rent, and profit. 
A)  spending. 
B)  revenue. 
C)  income. 
D)  wages, rent, and profit.

Question 17

Figure 2-17  
-Refer to Figure 2-17. The curves shown are

Accepted Answer

A)  supply curves. 
B)  demand curves. 
C)  preference curves. 
D)  income-consumption curves. 
A)  supply curves. 
B)  demand curves. 
C)  preference curves. 
D)  income-consumption curves.

Question 18

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

Accepted Answer

A)  Harry Truman 
B)  George Bernard Shaw 
C)  John Maynard Keynes 
D)  Ronald Reagan 
A)  Harry Truman 
B)  George Bernard Shaw 
C)  John Maynard Keynes 
D)  Ronald Reagan

Question 19

Figure 2-4  
-Refer to Figure 2-4. This economy has the ability to produce at which point(s)?

Accepted Answer

A)  Q, R, T, U 
B)  R, T, U 
C)  R, U 
D)  T 
A)  Q, R, T, U 
B)  R, T, U 
C)  R, U 
D)  T

Question 20

Table 2-2
The following table contains some production possibilities for an economy for a given year:
  
-Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  6000. 
B)  5500. 
C)  5000. 
D)  4500. 
A)  6000. 
B)  5500. 
C)  5000. 
D)  4500.

Exam 2: Thinking Like an Economist

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by

Figure 2-5 -Refer to Figure 2-5. Inefficient production is represented by which point(s)?

A statement describing how the world should be

The art in scientific thinking is

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

When economists make

Economists, like mathematicians, physicists, and biologists,

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

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

Where can an economy not produce?

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Figure 2-17 -Refer to Figure 2-17. The curves shown are

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

Figure 2-4 -Refer to Figure 2-4. This economy has the ability to produce at which point(s)?

Table 2-2 The following table contains some production possibilities for an economy for a given year: -Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

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

Filters