Question 1

Historical episodes are

Accepted Answer

A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again. 
A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again.

Question 2

Which of the following steps does an economist take when studying the economy?

Accepted Answer

A)  devise theories 
B)  collect data 
C)  analyze data 
D)  All of the above are correct. 
A)  devise theories 
B)  collect data 
C)  analyze data 
D)  All of the above are correct.

Question 3

Figure 2-21  
-Refer to Figure 2-21. According to the graph, snowstorms

Accepted Answer

A)  and snowblowers sold are positively correlated. 
B)  and snowblowers sold are negatively correlated 
C)  and snowblowers sold are uncorrelated. 
D)  are caused by more snowblowers being sold. 
A)  and snowblowers sold are positively correlated. 
B)  and snowblowers sold are negatively correlated 
C)  and snowblowers sold are uncorrelated. 
D)  are caused by more snowblowers being sold.

Question 4

Economic models omit many details to allow us to see what is truly important.

Accepted Answer

A) True 
 B)False

Question 5

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

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. What is the opportunity cost of moving from point T to point R?

Accepted Answer

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

Question 7

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 8

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 9

When economists make

Accepted Answer

A)  positive statements, they are speaking not as scientists but as policy advisers. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as scientists but as policy advisers. 
D)  normative statements, they are speaking not as policy advisers but as model-builders. 
A)  positive statements, they are speaking not as scientists but as policy advisers. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as scientists but as policy advisers. 
D)  normative statements, they are speaking not as policy advisers but as model-builders.

Question 10

In the circular-flow diagram,

Accepted Answer

A)  firms own the factors of production. 
B)  the factors of production are labor, land, and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct. 
A)  firms own the factors of production. 
B)  the factors of production are labor, land, and capital. 
C)  the factors of production are also called "output." 
D)  All of the above are correct.

Question 11

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 12

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Question 13

A demand curve shows the relationship

Accepted Answer

A)  between income and quantity demanded. 
B)  between price and income. 
C)  between price and quantity demanded. 
D)  among income, price, and quantity demanded. 
A)  between income and quantity demanded. 
B)  between price and income. 
C)  between price and quantity demanded. 
D)  among income, price, and quantity demanded.

Question 14

In the circular-flow diagram, firms produce goods and services using the factors of production.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-12  
-Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

Accepted Answer

A)  a downturn in the economy. 
B)  economic growth. 
C)  an enhancement of equality. 
D)  an improvement in the allocation of resources. 
A)  a downturn in the economy. 
B)  economic growth. 
C)  an enhancement of equality. 
D)  an improvement in the allocation of resources.

Question 16

An assumption an economist might make while studying international trade is

Accepted Answer

A)  there are only two countries. 
B)  countries only produce two goods. 
C)  technology does not change. 
D)  All of the above are possible assumptions. 
A)  there are only two countries. 
B)  countries only produce two goods. 
C)  technology does not change. 
D)  All of the above are possible assumptions.

Question 17

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 one car is

Accepted Answer

The answer of Figure 2-15  
-Refer to Figure 2-15....

Question 18

Figure 2-23  
-Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not correct about most economic models?

Accepted Answer

A)  They are composed of equations and diagrams. 
B)  They contribute very little to economists' understanding of the real world. 
C)  They omit many features of the real-world economy. 
D)  In constructing models, economists make assumptions. 
A)  They are composed of equations and diagrams. 
B)  They contribute very little to economists' understanding of the real world. 
C)  They omit many features of the real-world economy. 
D)  In constructing models, economists make assumptions.

Question 20

You know an economist has crossed the line from scientist to policy adviser when he or she

Accepted Answer

A)  claims that the problem at hand is widely misunderstood by non-economists. 
B)  talks about the evidence. 
C)  makes normative statements. 
D)  makes a claim about how the world is. 
A)  claims that the problem at hand is widely misunderstood by non-economists. 
B)  talks about the evidence. 
C)  makes normative statements. 
D)  makes a claim about how the world is.

Exam 2: Thinking Like an Economist

Historical episodes are

Which of the following steps does an economist take when studying the economy?

Figure 2-21 -Refer to Figure 2-21. According to the graph, snowstorms

Economic models omit many details to allow us to see what is truly important.

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

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. What is the opportunity cost of moving from point T to point R?

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

When economists make

In the circular-flow diagram,

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Microeconomics and macroeconomics are closely intertwined.

A demand curve shows the relationship

In the circular-flow diagram, firms produce goods and services using the factors of production.

Figure 2-12 -Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

An assumption an economist might make while studying international trade is

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 one car is

Figure 2-23 -Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

Which of the following is not correct about most economic models?

You know an economist has crossed the line from scientist to policy adviser when he or she

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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