Question 1

Economists believe that production possibilities frontiers

Accepted Answer

A)  never have a bowed shape. 
B)  rarely have a bowed shape. 
C)  often have a bowed shape. 
D)  always have a bowed shape. 
A)  never have a bowed shape. 
B)  rarely have a bowed shape. 
C)  often have a bowed shape. 
D)  always have a bowed shape.

Question 2

An ordered pair is

Accepted Answer

A)  the process of checking calculations twice before placing them on a graph. 
B)  two numbers that can be represented by a single point on a graph. 
C)  two numbers that are represented by two points on a graph. 
D)  two points on a graph that are of equal distance from the origin. 
A)  the process of checking calculations twice before placing them on a graph. 
B)  two numbers that can be represented by a single point on a graph. 
C)  two numbers that are represented by two points on a graph. 
D)  two points on a graph that are of equal distance from the origin.

Question 3

The circular-flow diagram is an example of

Accepted Answer

A)  a laboratory experiment. 
B)  an economic model. 
C)  a mathematical model. 
D)  All of the above are correct. 
A)  a laboratory experiment. 
B)  an economic model. 
C)  a mathematical model. 
D)  All of the above are correct.

Question 4

Figure 2-17  
-Refer to Figure 2-17. The movement from point B to point C is a(n)

Accepted Answer

A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed. 
A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed.

Question 5

Which of the following is the best explanation for why President Harry Truman once said that he wanted to find a one-armed economist?

Accepted Answer

A)  President Truman received input from so many economists that he only wanted one view from each. 
B)  President Truman thought economists should analyze policies but not make or enforce them. 
C)  Economists understand that most policy decisions involve trade-offs so they are likely to present multiple views of policies. 
D)  A one-armed economist would conduct only positive analysis and no normative analysis. 
A)  President Truman received input from so many economists that he only wanted one view from each. 
B)  President Truman thought economists should analyze policies but not make or enforce them. 
C)  Economists understand that most policy decisions involve trade-offs so they are likely to present multiple views of policies. 
D)  A one-armed economist would conduct only positive analysis and no normative analysis.

Question 6

Figure 2-3  
-Refer to Figure 2-3. What do the inner arrows represent in the figure?

Accepted Answer

flow of in

Question 7

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 combination of points show production possibilities only achievable with improvements in technology or increases in resources?

Accepted Answer

A)  Q, R, U, and V 
B)  S and X 
C)  T and W 
D)  None of the above is correct. 
A)  Q, R, U, and V 
B)  S and X 
C)  T and W 
D)  None of the above is correct.

Question 8

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending 
A)  the effect of foreign direct investment on economic growth 
B)  the effect of a sales tax on the cigarette industry 
C)  the effect of an investment tax credit on the economy's capital stock 
D)  the effect of a war on government spending

Question 9

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 10

Figure 2-3  
-Refer to Figure 2-3. What do the rectangles represent in the figure?

Accepted Answer

The answer of Figure 2-3  
-Refer to Figure 2-3....

Question 11

Historical episodes are not valuable to economists.

Accepted Answer

A) True 
 B)False

Question 12

Economists sometimes give conflicting advice because

Accepted Answer

A)  graduate students in economics are encouraged to argue with each other. 
B)  economists have different values and scientific judgment. 
C)  economists acting as scientists do not like to agree with economists acting as policy advisers. 
D)  economics is more of a belief system than a science. 
A)  graduate students in economics are encouraged to argue with each other. 
B)  economists have different values and scientific judgment. 
C)  economists acting as scientists do not like to agree with economists acting as policy advisers. 
D)  economics is more of a belief system than a science.

Question 13

A relatively flat 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 14

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

Accepted Answer

A)  Americans deserve a cleaner environment. 
B)  Reducing emissions reduces days missed from school due to asthmb. 
C)  All Americans are entitled to quality health care. 
D)  Economic policies should focus on improving equality. 
A)  Americans deserve a cleaner environment. 
B)  Reducing emissions reduces days missed from school due to asthmb. 
C)  All Americans are entitled to quality health care. 
D)  Economic policies should focus on improving equality.

Question 15

Figure 2-6  
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point H is

Accepted Answer

A)  120 pillows. 
B)  120 blankets. 
C)  120 blankets and 120 pillows. 
D)  200 blankets. 
A)  120 pillows. 
B)  120 blankets. 
C)  120 blankets and 120 pillows. 
D)  200 blankets.

Question 16

In constructing models, economists

Accepted Answer

A)  leave out equations, since equations and models tend to contradict one another. 
B)  ignore the long run, since models are useful only for short-run analysis. 
C)  sometimes make assumptions that are contrary to features of the real world. 
D)  try to include every feature of the economy. 
A)  leave out equations, since equations and models tend to contradict one another. 
B)  ignore the long run, since models are useful only for short-run analysis. 
C)  sometimes make assumptions that are contrary to features of the real world. 
D)  try to include every feature of the economy.

Question 17

When economists make positive statements, they are

Accepted Answer

A)  speaking as scientists. 
B)  speaking as policy advisers. 
C)  making claims about how the world should be. 
D)  revealing that they are very conservative in their views of how the world works. 
A)  speaking as scientists. 
B)  speaking as policy advisers. 
C)  making claims about how the world should be. 
D)  revealing that they are very conservative in their views of how the world works.

Question 18

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 19

The goal of an economist who formulates new theories is to

Accepted Answer

A)  provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. 
B)  provoke stimulating debate in scientific journals. 
C)  contribute to an understanding of how the world works. 
D)  demonstrate that economists, like other scientists, can formulate testable theories. 
A)  provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works. 
B)  provoke stimulating debate in scientific journals. 
C)  contribute to an understanding of how the world works. 
D)  demonstrate that economists, like other scientists, can formulate testable theories.

Question 20

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)  can only show variables that are positively related. 
B)  can only show variables that have a negative correlation. 
C)  provide information on only one variable. 
D)  provide information on no more than two variables. 
A)  can only show variables that are positively related. 
B)  can only show variables that have a negative correlation. 
C)  provide information on only one variable. 
D)  provide information on no more than two variables.

Exam 2: Thinking Like an Economist

Economists believe that production possibilities frontiers

An ordered pair is

The circular-flow diagram is an example of

Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C is a(n)

Which of the following is the best explanation for why President Harry Truman once said that he wanted to find a one-armed economist?

Figure 2-3 -Refer to Figure 2-3. What do the inner arrows represent in the figure?

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

The president of the United States receives tax policy advice from economists in the

Figure 2-3 -Refer to Figure 2-3. What do the rectangles represent in the figure?

Historical episodes are not valuable to economists.

Economists sometimes give conflicting advice because

A relatively flat demand curve indicates that

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

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point H is

In constructing models, economists

When economists make positive statements, they are

Trade-offs are involved in most policy decisions.

The goal of an economist who formulates new theories is to

Graphs such as bar graphs and pie charts are limited in that they

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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