Question 1

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

Accepted Answer

A) 0 cups of coffee. 
B) 1 donut. 
C) 2 donuts. 
D) 4 cups of coffee. 
A) 0 cups of coffee. 
B) 1 donut. 
C) 2 donuts. 
D) 4 cups of coffee.

Question 2

Figure 2-12  
-Refer to Figure 2-12.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

A) a decrease in unemployment 
B) a technological advance in the consumer goods industries 
C) a general technological advance 
D) an increase in the availability of capital-producing resources 
A) a decrease in unemployment 
B) a technological advance in the consumer goods industries 
C) a general technological advance 
D) an increase in the availability of capital-producing resources

Question 3

In the circular-flow diagram,in the markets for

Accepted Answer

A) goods and services,households and firms are both sellers. 
B) goods and services,households are sellers and firms are buyers. 
C) the factors of production,households are sellers and firms are buyers. 
D) the factors of production,households and firms are both buyers. 
A) goods and services,households and firms are both sellers. 
B) goods and services,households are sellers and firms are buyers. 
C) the factors of production,households are sellers and firms are buyers. 
D) the factors of production,households and firms are both buyers.

Question 4

Figure 2-9
 
-Refer to Figure 2-9,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

Accepted Answer

A) unemployment. 
B) an improvement in donut production technology. 
C) an improvement in coffee production technology. 
D) an improvement in both donut and coffee production technology. 
A) unemployment. 
B) an improvement in donut production technology. 
C) an improvement in coffee production technology. 
D) an improvement in both donut and coffee production technology.

Question 5

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 6

Which of the following is a correct statement about production possibilities frontiers?

Accepted Answer

A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier,but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier,but not on or outside the frontier. 
A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier,but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier,but not on or outside the frontier.

Question 7

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

Accepted Answer

A) Unemployed labor is put to work producing jam and bread. 
B) The economy puts its idle capital to work producing jam and bread. 
C) The economy experiences economic growth. 
D) All of the above are correct. 
A) Unemployed labor is put to work producing jam and bread. 
B) The economy puts its idle capital to work producing jam and bread. 
C) The economy experiences economic growth. 
D) All of the above are correct.

Question 8

Figure 2-10
 
-Refer to Figure 2-10,Panel (a).To gain 2 tractors by moving from point W to point V,society must sacrifice

Accepted Answer

A) 12 sofas. 
B) employment. 
C) efficiency. 
D) More than one of the above is correct. 
A) 12 sofas. 
B) employment. 
C) efficiency. 
D) More than one of the above is correct.

Question 9

Which of the following is an example of a capital input?

Accepted Answer

A) a computer 
B) a share of stock 
C) an hour of a worker's time 
D) $50,000 
A) a computer 
B) a share of stock 
C) an hour of a worker's time 
D) $50,000

Question 10

Which of the following statements is correct?

Accepted Answer

A) Few economic models incorporate assumptions. 
B) Different economic models employ different sets of assumptions. 
C) Good economic models attempt to mimic reality as closely as possible. 
D) Economic models,to be accepted,must be tested by conducting experiments. 
A) Few economic models incorporate assumptions. 
B) Different economic models employ different sets of assumptions. 
C) Good economic models attempt to mimic reality as closely as possible. 
D) Economic models,to be accepted,must be tested by conducting experiments.

Question 11

Figure 2-2  
-Refer to Figure 2-2.If households are buyers in the markets represented by Box C of this circular-flow diagram,then

Accepted Answer

A) Box C must represent the markets for the factors of production. 
B) Box D must represent the markets for goods and services. 
C) firms are sellers in the markets represented by Box C. 
D) All of the above are correct. 
A) Box C must represent the markets for the factors of production. 
B) Box D must represent the markets for goods and services. 
C) firms are sellers in the markets represented by Box C. 
D) All of the above are correct.

Question 12

Figure 2-1  
-Refer to Figure 2-1.Harvey receives his first paycheck for working as an ice cream vendor.To which of the arrows does this transaction directly contribute?

Accepted Answer

A) B only 
B) A and B 
C) C only 
D) C and D 
A) B only 
B) A and B 
C) C only 
D) C and D

Question 13

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 14

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 society moves from point U to point V,

Accepted Answer

A) it gives up 40 bushels of apples to get 80 sweaters. 
B) it gives up 140 bushels of apples to get 80 sweaters. 
C) it gives up 80 sweaters to get 140 bushels of apples. 
D) it gives up 80 sweaters to get 40 bushels of apples. 
A) it gives up 40 bushels of apples to get 80 sweaters. 
B) it gives up 140 bushels of apples to get 80 sweaters. 
C) it gives up 80 sweaters to get 140 bushels of apples. 
D) it gives up 80 sweaters to get 40 bushels of apples.

Question 15

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A) all resources are scarce. 
B) economic growth is always occurring. 
C) the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing. 
D) the only way to get more of one good is to get less of the other. 
A) all resources are scarce. 
B) economic growth is always occurring. 
C) the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing. 
D) the only way to get more of one good is to get less of the other.

Question 16

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Accepted Answer

A) Home experienced increased unemployment. 
B) Home experienced a decline in pear-producing technology. 
C) Home experienced an improvement in cellular phone-making technology. 
D) Home experienced a reduction in resources. 
A) Home experienced increased unemployment. 
B) Home experienced a decline in pear-producing technology. 
C) Home experienced an improvement in cellular phone-making technology. 
D) Home experienced a reduction in resources.

Question 17

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A) If an economy wants to increase efficiency in production,then it must sacrifice equality in consumption. 
B) Once an economy has reached the efficient points on its production possibilities frontier,the only way of getting more of one good is to get less of the other. 
C) For an economy to consume more of one good,it must stop consuming the other good entirely. 
D) For an economy to produce and consume goods,it must sacrifice environmental quality. 
A) If an economy wants to increase efficiency in production,then it must sacrifice equality in consumption. 
B) Once an economy has reached the efficient points on its production possibilities frontier,the only way of getting more of one good is to get less of the other. 
C) For an economy to consume more of one good,it must stop consuming the other good entirely. 
D) For an economy to produce and consume goods,it must sacrifice environmental quality.

Question 18

Refer to Figure 2-13.Which of the following combinations of points are both efficient and attainable for this economy?

Accepted Answer

A) G,H 
B) F,I,L 
C) F,G,H,I,L 
D) J,K 
A) G,H 
B) F,I,L 
C) F,G,H,I,L 
D) J,K

Question 19

Which of these terms are used interchangeably?

Accepted Answer

A) "goods and services" and "inputs" 
B) "goods and services" and "factors of production" 
C) "inputs" and "factors of production" 
D) "land,labor,and capital" and "goods and services" 
A) "goods and services" and "inputs" 
B) "goods and services" and "factors of production" 
C) "inputs" and "factors of production" 
D) "land,labor,and capital" and "goods and services"

Question 20

Figure 2-7  
-Refer to Figure 2-7.This economy cannot produce at which point(s)?

Accepted Answer

A) L,M 
B) N,O,P,Q 
C) N,O,P 
D) Q 
A) L,M 
B) N,O,P,Q 
C) N,O,P 
D) Q

Exam 2: Thinking Like an Economist: The Economist As Scientist

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

Figure 2-12 -Refer to Figure 2-12.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

In the circular-flow diagram,in the markets for

Figure 2-9 -Refer to Figure 2-9,Panel (a)and Panel (b).A shift of the economy's production possibilities frontier from Panel (a)to Panel (b)could be caused by

A production possibilities frontier shifts outward when

Which of the following is a correct statement about production possibilities frontiers?

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

Figure 2-10 -Refer to Figure 2-10,Panel (a).To gain 2 tractors by moving from point W to point V,society must sacrifice

Which of the following is an example of a capital input?

Which of the following statements is correct?

Figure 2-2 -Refer to Figure 2-2.If households are buyers in the markets represented by Box C of this circular-flow diagram,then

Figure 2-1 -Refer to Figure 2-1.Harvey receives his first paycheck for working as an ice cream vendor.To which of the arrows does this transaction directly contribute?

In the circular-flow diagram,

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 society moves from point U to point V,

The bowed shape of the production possibilities frontier can be explained by the fact that

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Which of the following trade-offs does the production possibilities frontier illustrate?

Refer to Figure 2-13.Which of the following combinations of points are both efficient and attainable for this economy?

Which of these terms are used interchangeably?

Figure 2-7 -Refer to Figure 2-7.This economy cannot produce at which point(s)?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A