Question 1

A model can be accurately described as a

Accepted Answer

A)  theoretical abstraction with very little value. 
B)  device that is useful only to the people who created it. 
C)  realistic and carefully constructed theory. 
D)  simplification of reality. 
A)  theoretical abstraction with very little value. 
B)  device that is useful only to the people who created it. 
C)  realistic and carefully constructed theory. 
D)  simplification of reality.

Question 2

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year, it is producing 1050 units of food and 52 machines. Which of the following events could not explain the increase in output?

Accepted Answer

A)  a reduction in unemployment 
B)  an increase in available labor 
C)  an improvement in technology 
D)  Any of these events could explain the increase in output. 
A)  a reduction in unemployment 
B)  an increase in available labor 
C)  an improvement in technology 
D)  Any of these events could explain the increase in output.

Question 3

The essence of science is

Accepted Answer

A)  the laboratory experiment. 
B)  the scientific method. 
C)  the study of nature, but not the study of society. 
D)  All of the above are correct. 
A)  the laboratory experiment. 
B)  the scientific method. 
C)  the study of nature, but not the study of society. 
D)  All of the above are correct.

Question 4

Figure 2-2  
-Refer to Figure 2-2. Carla regularly buys fruits and vegetables at a grocery store. Roberto regularly pays a lawn- care company to mow his lawn. If the flow of fruits and vegetables from the grocery store to Carla is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Roberto to the lawn-care company is represented by an arrow

Accepted Answer

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

Question 5

The slope of a line that passes through the points (20, 30) and (40, 14) is

Accepted Answer

A)  -4/5. 
B)  -5/4. 
C)  4/5. 
D)  5/4. 
A)  -4/5. 
B)  -5/4. 
C)  4/5. 
D)  5/4.

Question 6

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. If this economy devotes all of its available resources to producing apples, then it will produce

Accepted Answer

A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters. 
A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters.

Question 7

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 8

Normative conclusions

Accepted Answer

A)  come from positive analysis alone. 
B)  are based on ignorance of positive analysis. 
C)  involve value judgments. 
D)  reflect the economist's role as scientist. 
A)  come from positive analysis alone. 
B)  are based on ignorance of positive analysis. 
C)  involve value judgments. 
D)  reflect the economist's role as scientist.

Question 9

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership. 
A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership.

Question 10

Figure 2-6  
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A)  This economy has moved from a point of inefficient production to a point of efficient production. 
B)  This economy has experienced economic growth. 
C)  This economy has experienced an increase in employment. 
D)  None of the above is correct. 
A)  This economy has moved from a point of inefficient production to a point of efficient production. 
B)  This economy has experienced economic growth. 
C)  This economy has experienced an increase in employment. 
D)  None of the above is correct.

Question 11

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Accepted Answer

A) True 
 B)False

Question 12

Duties of the Council of Economic Advisers include

Accepted Answer

A)  advising the president and writing the annual Economic Report of the President. 
B)  implementing the president's tax policies. 
C)  tracking the behavior of the nation's money supply. 
D)  All of the above are correct. 
A)  advising the president and writing the annual Economic Report of the President. 
B)  implementing the president's tax policies. 
C)  tracking the behavior of the nation's money supply. 
D)  All of the above are correct.

Question 13

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

Accepted Answer

A)  the slope of the production possibilities frontier. 
B)  3/2 sofas. 
C)  2/3 of a sofa. 
D)  Both a and b are correct. 
A)  the slope of the production possibilities frontier. 
B)  3/2 sofas. 
C)  2/3 of a sofa. 
D)  Both a and b are correct.

Question 15

Figure 2-23  
-Refer to Figure 2-23. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Accepted Answer

A) True 
 B)False

Question 16

When two variables have a negative correlation,

Accepted Answer

A)  they tend to move in opposite directions. 
B)  they tend to move in the same direction. 
C)  one variable will move while the other remains constant. 
D)  the variables' values are never positive. 
A)  they tend to move in opposite directions. 
B)  they tend to move in the same direction. 
C)  one variable will move while the other remains constant. 
D)  the variables' values are never positive.

Question 17

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Accepted Answer

A) True 
 B)False

Question 18

Figure 2-4  
-Refer to Figure 2-4. This economy cannot produce at which point(s)?

Accepted Answer

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

Question 19

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)  there will be a movement along the curve. 
B)  the curve will rotate clockwise. 
C)  the curve will be unaffected since only the variables on the axis affect the curve. 
D)  the curve will shift. 
A)  there will be a movement along the curve. 
B)  the curve will rotate clockwise. 
C)  the curve will be unaffected since only the variables on the axis affect the curve. 
D)  the curve will shift.

Question 20

A demand curve shows the relationship between price and

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded. 
A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded.

A model can be accurately described as a

The essence of science is

The slope of a line that passes through the points (20, 30) and (40, 14) is

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. If this economy devotes all of its available resources to producing apples, then it will produce

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Normative conclusions

A macroeconomist - as opposed to a microeconomist - would study

Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Duties of the Council of Economic Advisers include

Historical episodes allow economists to illustrate and evaluate current economic theories.

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

When two variables have a negative correlation,

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s)?

When a relevant variable that is not named on either axis changes,

A demand curve shows the relationship between price and

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

Filters

Exam 2: Thinking Like an Economist

A model can be accurately described as a

The essence of science is

The slope of a line that passes through the points (20, 30) and (40, 14) is

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. If this economy devotes all of its available resources to producing apples, then it will produce

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Normative conclusions

A macroeconomist - as opposed to a microeconomist - would study

Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Duties of the Council of Economic Advisers include

Historical episodes allow economists to illustrate and evaluate current economic theories.

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

When two variables have a negative correlation,

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s)?

When a relevant variable that is not named on either axis changes,

A demand curve shows the relationship between price and

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

Filters