Question 1

What would unemployment cause an economy to do?

Accepted Answer

A)  produce inside its production possibilities frontier 
B)  produce on its production possibilities frontier 
C)  produce outside its production possibilities frontier 
D)  shift its production possibilities frontier inwards 
A)  produce inside its production possibilities frontier 
B)  produce on its production possibilities frontier 
C)  produce outside its production possibilities frontier 
D)  shift its production possibilities frontier inwards

Question 2

What do economists do when they attempt to simplify the real world and make it easier to understand?

Accepted Answer

A)  They make assumptions. 
B)  They make uninformed judgments. 
C)  They make predictions. 
D)  They make evaluations. 
A)  They make assumptions. 
B)  They make uninformed judgments. 
C)  They make predictions. 
D)  They make evaluations.

Question 3

Figure 2-10  
-Refer to Figure 2-10.What could have caused the movement from point B to point C?

Accepted Answer

A)  inflation 
B)  a change in income 
C)  a change in the price of roses 
D)  a change in the cost of producing roses 
A)  inflation 
B)  a change in income 
C)  a change in the price of roses 
D)  a change in the cost of producing roses

Question 4

What revenue is received by firms from sales that is NOT used to pay for factors of production?

Accepted Answer

A)  rent 
B)  wages 
C)  profit 
D)  interest 
A)  rent 
B)  wages 
C)  profit 
D)  interest

Question 5

In the simple circular-flow diagram,in which market are households sellers?

Accepted Answer

A)  the factors of production market 
B)  the goods and services market 
C)  both the factors of production market and the goods and services market 
D)  neither the factors of production market nor the goods and services market 
A)  the factors of production market 
B)  the goods and services market 
C)  both the factors of production market and the goods and services market 
D)  neither the factors of production market nor the goods and services market

Question 6

What happens 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 may or may not change depending on how the variables are related. 
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 may or may not change depending on how the variables are related. 
C)  The curve will be unaffected since only the variables on the axis affect the curve. 
D)  The curve will shift.

Question 7

What is the first number in an ordered pair?

Accepted Answer

A)  the y-coordinate 
B)  the x-coordinate 
C)  either x or y,depending on the quadrant 
D)  not useful to know,since most graphs in economics use p and q,not x and y 
A)  the y-coordinate 
B)  the x-coordinate 
C)  either x or y,depending on the quadrant 
D)  not useful to know,since most graphs in economics use p and q,not x and y

Question 8

When is the production possibilities frontier bowed outward?

Accepted Answer

A)  if resources are not perfectly adaptable 
B)  if the amount of resources increases 
C)  if the level of technology increases 
D)  if opportunity costs are constant 
A)  if resources are not perfectly adaptable 
B)  if the amount of resources increases 
C)  if the level of technology increases 
D)  if opportunity costs are constant

Question 9

Figure 2-6  
-Refer to Figure 2-6.If this economy put all available resources into the production of bananas,how many could it produce?

Accepted Answer

A)  200 
B)  300 
C)  400 
D)  600 
A)  200 
B)  300 
C)  400 
D)  600

Question 10

How do economists view positive statements?

Accepted Answer

A)  affirmative,justifying existing economic policy 
B)  optimistic,putting the best possible interpretation on things 
C)  descriptive,making a claim about how the world is 
D)  prescriptive,making a claim about how the world ought to be 
A)  affirmative,justifying existing economic policy 
B)  optimistic,putting the best possible interpretation on things 
C)  descriptive,making a claim about how the world is 
D)  prescriptive,making a claim about how the world ought to be

Question 11

Figure 2-2  
-Refer to Figure 2-2.In which market are households sellers?

Accepted Answer

A)  Box A 
B)  Box B 
C)  Box C 
D)  Box D 
A)  Box A 
B)  Box B 
C)  Box C 
D)  Box D

Question 12

Table 2-1
​Production Possibilities for Toyland  
-Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Accepted Answer

A)  50 dolls 
B)  100 dolls 
C)  150 dolls 
D)  200 dolls 
A)  50 dolls 
B)  100 dolls 
C)  150 dolls 
D)  200 dolls

Question 13

Figure 2-4  
-Refer to Figure 2-4.What is the opportunity cost to the economy of getting 30 additional toothbrushes by moving from point A to point D?

Accepted Answer

A)  10 toasters 
B)  15 toasters 
C)  20 toasters 
D)  25 toasters 
A)  10 toasters 
B)  15 toasters 
C)  20 toasters 
D)  25 toasters

Question 14

What does a circular-flow diagram do?

Accepted Answer

A)  It illustrates cost-benefit analysis. 
B)  It explains how the economy is organized. 
C)  It shows the flow of trade in the world. 
D)  It explains how banks circulate money in the economy. 
A)  It illustrates cost-benefit analysis. 
B)  It explains how the economy is organized. 
C)  It shows the flow of trade in the world. 
D)  It explains how banks circulate money in the economy.

What would unemployment cause an economy to do?

What do economists do when they attempt to simplify the real world and make it easier to understand?

Figure 2-10 -Refer to Figure 2-10.What could have caused the movement from point B to point C?

What revenue is received by firms from sales that is NOT used to pay for factors of production?

In the simple circular-flow diagram,in which market are households sellers?

What happens when a relevant variable that is not named on either axis changes?

What is the first number in an ordered pair?

When is the production possibilities frontier bowed outward?

Figure 2-6 -Refer to Figure 2-6.If this economy put all available resources into the production of bananas,how many could it produce?

How do economists view positive statements?

Figure 2-2 -Refer to Figure 2-2.In which market are households sellers?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Figure 2-4 -Refer to Figure 2-4.What is the opportunity cost to the economy of getting 30 additional toothbrushes by moving from point A to point D?

What does a circular-flow diagram do?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 2: Thinking Like an Economist

What would unemployment cause an economy to do?

What do economists do when they attempt to simplify the real world and make it easier to understand?

Figure 2-10 -Refer to Figure 2-10.What could have caused the movement from point B to point C?

What revenue is received by firms from sales that is NOT used to pay for factors of production?

In the simple circular-flow diagram,in which market are households sellers?

What happens when a relevant variable that is not named on either axis changes?

What is the first number in an ordered pair?

When is the production possibilities frontier bowed outward?

Figure 2-6 -Refer to Figure 2-6.If this economy put all available resources into the production of bananas,how many could it produce?

How do economists view positive statements?

Figure 2-2 -Refer to Figure 2-2.In which market are households sellers?

Table 2-1 ​Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?

Figure 2-4 -Refer to Figure 2-4.What is the opportunity cost to the economy of getting 30 additional toothbrushes by moving from point A to point D?

What does a circular-flow diagram do?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 450 to 500?