Question 1

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Accepted Answer

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

Question 2

Which of the following statements is correct about the roles of economists?

Accepted Answer

A)  Economists are best viewed as policy advisers. 
B)  Economists are best viewed as scientists. 
C)  In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists. 
D)  In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers. 
A)  Economists are best viewed as policy advisers. 
B)  Economists are best viewed as scientists. 
C)  In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists. 
D)  In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers.

Question 3

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A)  There is a great deal of agreement among economists on virtually every economic issue. 
B)  There is a great deal of agreement among economists on many important economic issues. 
C)  All disagreements among economists are attributable to differences in their values. 
D)  All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories. 
A)  There is a great deal of agreement among economists on virtually every economic issue. 
B)  There is a great deal of agreement among economists on many important economic issues. 
C)  All disagreements among economists are attributable to differences in their values. 
D)  All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.

Question 4

A production possibilities frontier shifts outward when

Accepted Answer

A)  the economy experiences economic growth. 
B)  the desires of the economy's citizens change. 
C)  at least one of the basic principles of economics is violated. 
D)  opportunity costs are lessened. 
A)  the economy experiences economic growth. 
B)  the desires of the economy's citizens change. 
C)  at least one of the basic principles of economics is violated. 
D)  opportunity costs are lessened.

Question 5

In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?

Accepted Answer

The answer of In the circular flow diagram, who owns...

Question 6

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-9
Panel (a) Panel (b)
    
-Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point M to point L is

Accepted Answer

A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee. 
A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee.

Question 8

To display information on two variables, an economist must use

Accepted Answer

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

Question 9

Which of the following is not correct?

Accepted Answer

A)  Evaluating statements about how the world should be involves values as well as facts. 
B)  Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C)  Normative statements can be judged using data alone. 
D)  Deciding what is good or bad policy is not just a matter of science. 
A)  Evaluating statements about how the world should be involves values as well as facts. 
B)  Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C)  Normative statements can be judged using data alone. 
D)  Deciding what is good or bad policy is not just a matter of science.

Question 10

Two variables that have a positive correlation move in the same direction.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-8  
-Refer to Figure 2-8. Inefficient production is represented by which point(s)?

Accepted Answer

A)  K, M 
B)  L 
C)  L, M 
D)  M 
A)  K, M 
B)  L 
C)  L, M 
D)  M

Question 12

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Accepted Answer

A)  rotation of the curve. 
B)  shift of the curve. 
C)  movement along the curve. 
D)  change in the slope of the curve. 
A)  rotation of the curve. 
B)  shift of the curve. 
C)  movement along the curve. 
D)  change in the slope of the curve.

Question 13

Another term for factors of production is

Accepted Answer

A)  inputs. 
B)  output. 
C)  goods. 
D)  services. 
A)  inputs. 
B)  output. 
C)  goods. 
D)  services.

Question 14

The language of economics is

Accepted Answer

A)  needlessly arcane. 
B)  valuable because it provides a new and useful way of learning about the world. 
C)  easy to learn within a day. 
D)  unnecessary to learn for a thorough understanding of economics. 
A)  needlessly arcane. 
B)  valuable because it provides a new and useful way of learning about the world. 
C)  easy to learn within a day. 
D)  unnecessary to learn for a thorough understanding of economics.

Question 15

When economists are trying to explain the world, they are

Accepted Answer

A)  scientists. 
B)  policy advisers. 
C)  in the realm of microeconomics rather than macroeconomics. 
D)  in the realm of normative economics rather than positive economics. 
A)  scientists. 
B)  policy advisers. 
C)  in the realm of microeconomics rather than macroeconomics. 
D)  in the realm of normative economics rather than positive economics.

Question 16

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

Accepted Answer

A)  The economy experiences economic growth. 
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance. 
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance. 
D)  All of the above are correct. 
A)  The economy experiences economic growth. 
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance. 
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance. 
D)  All of the above are correct.

Question 17

The country of Gerance produces two goods, cars and wine. Last year, it produced 1,000 cars and 15,000 cases of wine. This year, it produced 1,300 cars and 20,000 cases of wine. Given no other information, which of the following events could not explain this change?

Accepted Answer

A)  Gerance experienced a reduction in unemployment. 
B)  Gerance experienced an improvement in car-making technology. 
C)  Gerance acquired more resources. 
D)  Any of these events could explain the change. 
A)  Gerance experienced a reduction in unemployment. 
B)  Gerance experienced an improvement in car-making technology. 
C)  Gerance acquired more resources. 
D)  Any of these events could explain the change.

Question 18

Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik

Accepted Answer

A)  hold different normative views about the tax system. 
B)  disagree about the validity of a positive theory. 
C)  have a fundamental misunderstanding of the tax system. 
D)  More than one of the above is correct. 
A)  hold different normative views about the tax system. 
B)  disagree about the validity of a positive theory. 
C)  have a fundamental misunderstanding of the tax system. 
D)  More than one of the above is correct.

Question 19

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Accepted Answer

The answer of When economists are trying to explain the...

Question 20

In the ordered pair (3, 6), 3 is the

Accepted Answer

A)  x-coordinate. 
B)  y-coordinate. 
C)  origin. 
D)  slope. 
A)  x-coordinate. 
B)  y-coordinate. 
C)  origin. 
D)  slope.

Exam 2: Thinking Like an Economist

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Which of the following statements is correct about the roles of economists?

Which of the following statements is correct about the extent of disagreement among economists?

A production possibilities frontier shifts outward when

In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point M to point L is

To display information on two variables, an economist must use

Which of the following is not correct?

Two variables that have a positive correlation move in the same direction.

Figure 2-8 -Refer to Figure 2-8. Inefficient production is represented by which point(s)?

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Another term for factors of production is

The language of economics is

When economists are trying to explain the world, they are

The country of Gerance produces two goods, cars and wine. Last year, it produced 1,000 cars and 15,000 cases of wine. This year, it produced 1,300 cars and 20,000 cases of wine. Given no other information, which of the following events could not explain this change?

Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

In the ordered pair (3, 6), 3 is the

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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