Question 1

The scientific method is applicable to studying

Accepted Answer

A)  natural sciences, but not social sciences. 
B)  social sciences, but not natural sciences. 
C)  both natural sciences and social sciences. 
D)  None of the above is correct. 
A)  natural sciences, but not social sciences. 
B)  social sciences, but not natural sciences. 
C)  both natural sciences and social sciences. 
D)  None of the above is correct.

Question 2

When constructing a production possibilities frontier, which of the following assumptions is not made?

Accepted Answer

A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period. 
A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period.

Question 3

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 4

In the circular-flow diagram, in the markets for

Accepted Answer

A)  goods and services, households and firms are both sellers. 
B)  goods and services, households are buyers and firms are sellers. 
C)  the factors of production, households are buyers and firms are sellers. 
D)  the factors of production, households and firms are both buyers. 
A)  goods and services, households and firms are both sellers. 
B)  goods and services, households are buyers and firms are sellers. 
C)  the factors of production, households are buyers and firms are sellers. 
D)  the factors of production, households and firms are both buyers.

Question 5

The x-coordinate is the

Accepted Answer

A)  first number of an ordered pair and represents the point's horizontal location. 
B)  second number of an ordered pair and represents the point's horizontal location. 
C)  first number of an ordered pair and represents the point's vertical location. 
D)  second number of an ordered pair and represents the point's vertical location. 
A)  first number of an ordered pair and represents the point's horizontal location. 
B)  second number of an ordered pair and represents the point's horizontal location. 
C)  first number of an ordered pair and represents the point's vertical location. 
D)  second number of an ordered pair and represents the point's vertical location.

Question 6

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)  the respondents were almost equally divided on the propositions. 
B)  the respondents favored the propositions by a slight margin. 
C)  the respondents disagreed with the propositions by a slight margin. 
D)  there was overwhelming endorsement of the propositions among the respondents. 
A)  the respondents were almost equally divided on the propositions. 
B)  the respondents favored the propositions by a slight margin. 
C)  the respondents disagreed with the propositions by a slight margin. 
D)  there was overwhelming endorsement of the propositions among the respondents.

Question 7

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 8

Economists regard events from the past as

Accepted Answer

A)  irrelevant, since history is unlikely to repeat itself. 
B)  of limited interest, since those events seldom provide any useful economic datb. 
C)  interesting but not particularly valuable, since those events cannot be used to evaluate present-day economic theories. 
D)  interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future. 
A)  irrelevant, since history is unlikely to repeat itself. 
B)  of limited interest, since those events seldom provide any useful economic datb. 
C)  interesting but not particularly valuable, since those events cannot be used to evaluate present-day economic theories. 
D)  interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future.

Question 9

Which of the following statements is correct?

Accepted Answer

A)  Few economic models incorporate assumptions. 
B)  Different economic models employ different sets of assumptions. 
C)  Good economic models attempt to mimic reality as closely as possible. 
D)  Economic models, to be accepted, must be tested by conducting experiments. 
A)  Few economic models incorporate assumptions. 
B)  Different economic models employ different sets of assumptions. 
C)  Good economic models attempt to mimic reality as closely as possible. 
D)  Economic models, to be accepted, must be tested by conducting experiments.

Question 10

Figure 2-16  
-Refer to Figure 2-16. The graph shown is known as a

Accepted Answer

A)  time-series graph. 
B)  bar graph. 
C)  scatterplot. 
D)  pie chart. 
A)  time-series graph. 
B)  bar graph. 
C)  scatterplot. 
D)  pie chart.

Question 11

When two variables move in the same direction, the curve relating them is

Accepted Answer

A)  upward sloping, and we say the variables are positively related. 
B)  upward sloping, and we say the variables are negatively related. 
C)  downward sloping, and we say the variables are positively related. 
D)  downward sloping, and we say the variables are negatively related. 
A)  upward sloping, and we say the variables are positively related. 
B)  upward sloping, and we say the variables are negatively related. 
C)  downward sloping, and we say the variables are positively related. 
D)  downward sloping, and we say the variables are negatively related.

Question 12

The decision of which assumptions to make is

Accepted Answer

A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method. 
A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method.

Question 13

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Accepted Answer

A)  For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics. 
B)  Microeconomists study markets for small products, whereas macroeconomists study markets for large products. 
C)  Microeconomics and macroeconomics are distinct from one another, yet they are closely related. 
D)  Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies. 
A)  For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics. 
B)  Microeconomists study markets for small products, whereas macroeconomists study markets for large products. 
C)  Microeconomics and macroeconomics are distinct from one another, yet they are closely related. 
D)  Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies.

Question 15

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A)  efficiency 
B)  opportunity cost 
C)  equality 
D)  trade-offs 
A)  efficiency 
B)  opportunity cost 
C)  equality 
D)  trade-offs

Question 16

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Accepted Answer

A) True 
 B)False

Question 17

In the circular-flow diagram, which of the following items does not flow from firms to households?

Accepted Answer

A)  goods 
B)  services 
C)  capital 
D)  profit 
A)  goods 
B)  services 
C)  capital 
D)  profit

Question 18

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 19

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 20

Albert Einstein once made the following observation about science:

Accepted Answer

A)  "The whole of science is nothing more than the refinement of everyday thinking." 
B)  "The whole of science is nothing more than an interesting intellectual exercise." 
C)  "In order to understand science, one must rely solely on abstraction." 
D)  "In order to understand science, one must transcend everyday thinking." 
A)  "The whole of science is nothing more than the refinement of everyday thinking." 
B)  "The whole of science is nothing more than an interesting intellectual exercise." 
C)  "In order to understand science, one must rely solely on abstraction." 
D)  "In order to understand science, one must transcend everyday thinking."

Exam 2: Thinking Like an Economist

The scientific method is applicable to studying

When constructing a production possibilities frontier, which of the following assumptions is not made?

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

In the circular-flow diagram, in the markets for

The x-coordinate is the

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Just like other scientific models, economic models simplify reality using

Economists regard events from the past as

Which of the following statements is correct?

Figure 2-16 -Refer to Figure 2-16. The graph shown is known as a

When two variables move in the same direction, the curve relating them is

The decision of which assumptions to make is

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Which of the following concepts cannot be illustrated by the production possibilities frontier?

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

In the circular-flow diagram, which of the following items does not flow from firms to households?

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Albert Einstein once made the following observation about science:

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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