Question 1

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a(n)

Accepted Answer

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

Question 2

Figure 2-22  
-Refer to Figure 2-22. What are the coordinates of point C?

Accepted Answer

The answer of Figure 2-22  
-Refer to Figure 2-22....

Question 3

The production possibilities frontier is used to illustrate some basic economic ideas, including

Accepted Answer

A)  scarcity. 
B)  opportunity cost. 
C)  economic growth. 
D)  All of the above are correct. 
A)  scarcity. 
B)  opportunity cost. 
C)  economic growth. 
D)  All of the above are correct.

Question 4

The circular-flow diagram

Accepted Answer

A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs, outputs, and dollars. 
D)  All of the above are correct. 
A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs, outputs, and dollars. 
D)  All of the above are correct.

Question 5

Figure 2-23  
-Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-2  
-Refer to Figure 2-2. Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular­flow diagram, then Juan's income is represented by a flow of dollars

Accepted Answer

A)  from Box A to Box C. 
B)  from Box C to Box b. 
C)  from Box B to Box D. 
D)  from Box D to Box B. 
A)  from Box A to Box C. 
B)  from Box C to Box b. 
C)  from Box B to Box D. 
D)  from Box D to Box B.

Question 7

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)  a landowner leases land to a farmer 
B)  a farmer hires a teenager to help with harvest 
C)  a construction company rents trucks for its business 
D)  a woman buys corn for dinner 
A)  a landowner leases land to a farmer 
B)  a farmer hires a teenager to help with harvest 
C)  a construction company rents trucks for its business 
D)  a woman buys corn for dinner

Question 8

The slope of a line passing through the points (15, 3) and (10, 6) is

Accepted Answer

A)  -3/5. 
B)  3/5. 
C)  -5/3. 
D)  5/3. 
A)  -3/5. 
B)  3/5. 
C)  -5/3. 
D)  5/3.

Question 9

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Accepted Answer

A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate 
A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate

Question 10

Figure 2-3  
-Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Accepted Answer

A)  produce and sell goods and services 
B)  hire and use factors of production 
C)  own and sell factors of production 
D)  exchange goods and services between firms and households 
A)  produce and sell goods and services 
B)  hire and use factors of production 
C)  own and sell factors of production 
D)  exchange goods and services between firms and households

Question 11

Macroeconomics is the study of

Accepted Answer

A)  individual decision makers. 
B)  international trade. 
C)  economy-wide phenomena. 
D)  markets for large products. 
A)  individual decision makers. 
B)  international trade. 
C)  economy-wide phenomena. 
D)  markets for large products.

Question 12

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 point(s) on the graph show unemployment of resources?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 13

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-5  
-Refer to Figure 2-5. It is not possible for this economy to produce at point

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 15

Figure 2-5  
-Refer to Figure 2-5. It is possible for this economy to produce

Accepted Answer

A)  60 dryers and 50 washers. 
B)  60 dryers and 60 washers. 
C)  80 dryers and 50 washers. 
D)  All of the above. 
A)  60 dryers and 50 washers. 
B)  60 dryers and 60 washers. 
C)  80 dryers and 50 washers. 
D)  All of the above.

Question 16

The Economic Report of the President

Accepted Answer

A)  discusses recent developments in the economy and presents analysis of current policy issues. 
B)  is written by the Council of Economic Advisers. 
C)  is the responsibility of the economists at the Office of Management and Budget. 
D)  Both a and b are correct. 
A)  discusses recent developments in the economy and presents analysis of current policy issues. 
B)  is written by the Council of Economic Advisers. 
C)  is the responsibility of the economists at the Office of Management and Budget. 
D)  Both a and b are correct.

Question 17

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

Accepted Answer

A)  Universal health care would be good for U.S. citizens. 
B)  An increase in the cigarette tax would cause a decrease in the number of smokers. 
C)  A decrease in the minimum wage would decrease unemployment. 
D)  A law requiring the federal government to balance its budget would increase economic growth. 
A)  Universal health care would be good for U.S. citizens. 
B)  An increase in the cigarette tax would cause a decrease in the number of smokers. 
C)  A decrease in the minimum wage would decrease unemployment. 
D)  A law requiring the federal government to balance its budget would increase economic growth.

Question 18

Economists at the Department of Justice

Accepted Answer

A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget. 
A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget.

Question 19

Figure 2-3  
-Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

Accepted Answer

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

Question 20

Which of the following statements about economic models is correct?

Accepted Answer

A)  Economic models are built to mirror reality exactly. 
B)  Economic models are useful, but they should not be used for the purpose of improving public policies. 
C)  Because economic models omit many details, they allow us to see what is truly important. 
D)  Economic models seldom incorporate equations or diagrams. 
A)  Economic models are built to mirror reality exactly. 
B)  Economic models are useful, but they should not be used for the purpose of improving public policies. 
C)  Because economic models omit many details, they allow us to see what is truly important. 
D)  Economic models seldom incorporate equations or diagrams.

Exam 2: Thinking Like an Economist

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a(n)

Figure 2-22 -Refer to Figure 2-22. What are the coordinates of point C?

The production possibilities frontier is used to illustrate some basic economic ideas, including

The circular-flow diagram

Figure 2-23 -Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

The slope of a line passing through the points (15, 3) and (10, 6) is

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Macroeconomics is the study of

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 point(s) on the graph show unemployment of resources?

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Figure 2-5 -Refer to Figure 2-5. It is not possible for this economy to produce at point

Figure 2-5 -Refer to Figure 2-5. It is possible for this economy to produce

The Economic Report of the President

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

Economists at the Department of Justice

Figure 2-3 -Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

Which of the following statements about economic models is correct?

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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