Question 1

Economists may disagree about the validity of alternative positive theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-23  
-Refer to Figure 2-23. The opportunity cost of moving from point B to point A is zero.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-1  
-Refer to Figure 2-1. Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute?

Accepted Answer

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

Question 4

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. A movement from point A to point B 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 5

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Accepted Answer

A) True 
 B)False

Question 6

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Accepted Answer

land, labo

Question 7

Figure 2-23  
-Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Question 8

In the circular-flow diagram,

Accepted Answer

A)  profit flows from households to firms. 
B)  labor flows from households to firms. 
C)  services flow from households to firms. 
D)  All of the above are correct. 
A)  profit flows from households to firms. 
B)  labor flows from households to firms. 
C)  services flow from households to firms. 
D)  All of the above are correct.

Question 9

Figure 2-4  
-Refer to Figure 2-4. Inefficient production is represented by which point(s)?

Accepted Answer

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

Question 10

Figure 2-7  
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources. 
A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources.

Question 11

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 12

Figure 2-19
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service  
-Refer to Figure 2-19. Which of the following conclusions should not be drawn from observing this graph?

Accepted Answer

A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers. 
A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers.

Question 13

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

Accepted Answer

A) True 
 B)False

Question 14

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense. 
A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense.

Question 15

In the circular-flow diagram,

Accepted Answer

A)  factors of production flow from government to firms. 
B)  goods and services flow from households to firms. 
C)  income paid to the factors of production flows from firms to households. 
D)  spending on goods and services flows from firms to households. 
A)  factors of production flow from government to firms. 
B)  goods and services flow from households to firms. 
C)  income paid to the factors of production flows from firms to households. 
D)  spending on goods and services flows from firms to households.

Question 16

Figure 2-5  
-Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Accepted Answer

A)  The economy has insufficient resources to produce at a more desirable point. 
B)  The economy's available technology prevents it from producing at a more desirable point. 
C)  There is widespread unemployment in the economy. 
D)  Any of the above statements would be a legitimate explanation for this situation. 
A)  The economy has insufficient resources to produce at a more desirable point. 
B)  The economy's available technology prevents it from producing at a more desirable point. 
C)  There is widespread unemployment in the economy. 
D)  Any of the above statements would be a legitimate explanation for this situation.

Question 17

Economists face an obstacle that many other scientists do not face. What is that obstacle?

Accepted Answer

A)  It is often difficult to formulate theories in economics. 
B)  It is often impractical to perform experiments in economics. 
C)  Economics cannot be addressed objectively; it must be addressed subjectively. 
D)  The scientific method cannot be applied to the study of economics. 
A)  It is often difficult to formulate theories in economics. 
B)  It is often impractical to perform experiments in economics. 
C)  Economics cannot be addressed objectively; it must be addressed subjectively. 
D)  The scientific method cannot be applied to the study of economics.

Question 18

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Accepted Answer

Council of

Question 19

Figure 2-23  
-Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 20

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. In the ordered pair (8, 24)

Accepted Answer

A)  the x-coordinate is 8 and the y-coordinate is 24. 
B)  the x-coordinate is 24 and the y-coordinate is 8. 
C)  the numbers tell the location of the origin. 
D)  the 8 represents the price and the 24 represents the number of restaurant meals. 
A)  the x-coordinate is 8 and the y-coordinate is 24. 
B)  the x-coordinate is 24 and the y-coordinate is 8. 
C)  the numbers tell the location of the origin. 
D)  the 8 represents the price and the 24 represents the number of restaurant meals.

Exam 2: Thinking Like an Economist

Economists may disagree about the validity of alternative positive theories about how the world works.

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point B to point A is zero.

Figure 2-1 -Refer to Figure 2-1. Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute?

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

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Figure 2-23 -Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

In the circular-flow diagram,

Figure 2-4 -Refer to Figure 2-4. Inefficient production is represented by which point(s)?

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

John Maynard Keynes referred to economics as an easy subject,

In the circular-flow diagram,

Figure 2-5 -Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Economists face an obstacle that many other scientists do not face. What is that obstacle?

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair (8, 24)

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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