Question 1

An economic model can accurately explain how the economy is organized because it is designed to include, to the extent possible, all features of the real world.

Accepted Answer

A) True 
 B)False

Question 2

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Accepted Answer

A)  the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B)  the tradeoff between production of jewelry and production of clothing 
C)  the opportunity cost of clothing in terms of jewelry 
D)  the effect of economic growth on production possibilities involving jewelry and clothing 
A)  the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B)  the tradeoff between production of jewelry and production of clothing 
C)  the opportunity cost of clothing in terms of jewelry 
D)  the effect of economic growth on production possibilities involving jewelry and clothing

Question 3

Figure 2-10
Panel (a) Panel (b)
    
-Refer to Figure 2-10, 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 tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production. 
A)  The tradeoff between the production of tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production.

Question 4

Figure 2-10
Panel (a) Panel (b)
    
-Refer to Figure 2-10, Panel (a). Production at point Y is

Accepted Answer

A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient. 
A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient.

Question 5

Which of the following is not an example of a graph of a single variable?

Accepted Answer

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

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. A movement from point A to point Z is called

Accepted Answer

A)  a shift in demand. 
B)  a movement along the demand curve. 
C)  a shift in supply. 
D)  a movement along the supply curve. 
A)  a shift in demand. 
B)  a movement along the demand curve. 
C)  a shift in supply. 
D)  a movement along the supply curve.

Question 8

Figure 2-5  
-Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Accepted Answer

A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point d. 
A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point d.

Question 9

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A)  Office of Management and Budget. 
B)  Department of Labor. 
C)  Congressional Budget Office. 
D)  Department of the Treasury. 
A)  Office of Management and Budget. 
B)  Department of Labor. 
C)  Congressional Budget Office. 
D)  Department of the Treasury.

Question 10

The design of tax policy is one of the responsibilities of economists who work at the

Accepted Answer

A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 11

Normative statements are

Accepted Answer

A)  prescriptive, whereas positive statements are descriptive. 
B)  descriptive, whereas positive statements are prescriptive. 
C)  backward-looking, whereas positive statements are forward-looking. 
D)  forward-looking, whereas positive statements are backward-looking. 
A)  prescriptive, whereas positive statements are descriptive. 
B)  descriptive, whereas positive statements are prescriptive. 
C)  backward-looking, whereas positive statements are forward-looking. 
D)  forward-looking, whereas positive statements are backward-looking.

Question 12

Policies such as rent control and trade barriers persist

Accepted Answer

A)  because economists are about evenly divided as to the merits of those policies. 
B)  because almost all economists agree that those policies have no discernible economic effects. 
C)  because almost all economists agree that those policies are desirable. 
D)  despite the fact that almost all economists agree that those policies are undesirable. 
A)  because economists are about evenly divided as to the merits of those policies. 
B)  because almost all economists agree that those policies have no discernible economic effects. 
C)  because almost all economists agree that those policies are desirable. 
D)  despite the fact that almost all economists agree that those policies are undesirable.

Question 13

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following allows you to provide information about the relationship between two variables?

Accepted Answer

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

Question 15

Figure 2-13  
-Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Accepted Answer

A)  I, L 
B)  G, H 
C)  J, K 
D)  F, G 
A)  I, L 
B)  G, H 
C)  J, K 
D)  F, G

Question 16

In economics, capital refers to

Accepted Answer

A)  the finances necessary for firms to produce their products. 
B)  buildings and machines used in the production process. 
C)  the money households use to purchase firms' output. 
D)  stocks and bonds. 
A)  the finances necessary for firms to produce their products. 
B)  buildings and machines used in the production process. 
C)  the money households use to purchase firms' output. 
D)  stocks and bonds.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

For economists, historical episodes

Accepted Answer

A)  are not worthy of study because they offer few insights into current economic events and problems. 
B)  are not worthy of study because laboratory experiments provide more reliable datb. 
C)  are worthy of study because economists rely entirely on observation, rather than on theory. 
D)  are worthy of study because they serve as valuable substitutes for laboratory experiments. 
A)  are not worthy of study because they offer few insights into current economic events and problems. 
B)  are not worthy of study because laboratory experiments provide more reliable datb. 
C)  are worthy of study because economists rely entirely on observation, rather than on theory. 
D)  are worthy of study because they serve as valuable substitutes for laboratory experiments.

Question 19

Almost all economists agree that local and state governments should

Accepted Answer

A)  eliminate subsidies to professional sports franchises. 
B)  increase subsidies to professional sports franchises. 
C)  copy economic policy from Washington, D.C. 
D)  prevent companies from outsourcing work. 
A)  eliminate subsidies to professional sports franchises. 
B)  increase subsidies to professional sports franchises. 
C)  copy economic policy from Washington, D.C. 
D)  prevent companies from outsourcing work.

Question 20

Table 2-5
  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Accepted Answer

A)  200 bushels of wheat 
B)  400 bushels of wheat 
C)  600 bushels of wheat 
D)  800 bushels of wheat 
A)  200 bushels of wheat 
B)  400 bushels of wheat 
C)  600 bushels of wheat 
D)  800 bushels of wheat

Exam 2: Thinking Like an Economist

An economic model can accurately explain how the economy is organized because it is designed to include, to the extent possible, all features of the real world.

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, 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)?

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). Production at point Y is

Which of the following is not an example of a graph of a single variable?

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

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. A movement from point A to point Z is called

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Analysis of data on workers and those looking for work is conducted by economists at the

The design of tax policy is one of the responsibilities of economists who work at the

Normative statements are

Policies such as rent control and trade barriers persist

A circular-flow diagram is a visual model of the economy.

Which of the following allows you to provide information about the relationship between two variables?

Figure 2-13 -Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

In economics, capital refers to

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

For economists, historical episodes

Almost all economists agree that local and state governments should

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

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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