Question 1

Historical episodes are not valuable to economists.

Accepted Answer

A) True 
 B)False

Question 2

Use the following Figure to answer the question : Figure 2-23 :  
-Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

Accepted Answer

A) True 
 B)False

Question 3

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Accepted Answer

A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit 
A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit

Question 4

Use the following Figure to answer the question : 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 Use the following Figure to answer the...

Question 5

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 6

Points inside the production possibilities frontier represent inefficient levels of production.

Accepted Answer

A) True 
 B)False

Question 7

The second number in any ordered pair is

Accepted Answer

A)  the x-coordinate. 
B)  the y-coordinate. 
C)  the horizontal location of the point. 
D)  the slope. 
A)  the x-coordinate. 
B)  the y-coordinate. 
C)  the horizontal location of the point. 
D)  the slope.

Question 8

Use the following Figure to answer the question Figure: 2-2  
-Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

Accepted Answer

A)  the flow of factors of production is also part of what is represented by the inner loop. 
B)  the flow of income paid to households is also part of what is represented by the inner loop. 
C)  the flow of revenue to firms is also part of what is represented by the inner loop. 
D)  households must be sellers of output. 
A)  the flow of factors of production is also part of what is represented by the inner loop. 
B)  the flow of income paid to households is also part of what is represented by the inner loop. 
C)  the flow of revenue to firms is also part of what is represented by the inner loop. 
D)  households must be sellers of output.

Question 9

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods.

Question 10

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

Accepted Answer

A)  The economy experiences economic growth. 
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance. 
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance. 
D)  All of the above are correct. 
A)  The economy experiences economic growth. 
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance. 
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance. 
D)  All of the above are correct.

Question 11

Use the following Figure to answer the question Figure: 2-2  
-Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Accepted Answer

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

Question 12

One thing economists do to help them understand how the real world works is

Accepted Answer

A)  make assumptions. 
B)  ignore the past. 
C)  try to capture every aspect of the real world in the models they construct. 
D)  All of the above are correct. 
A)  make assumptions. 
B)  ignore the past. 
C)  try to capture every aspect of the real world in the models they construct. 
D)  All of the above are correct.

Question 13

Use the following Figure to answer the question : Figure 2-20 :
Relationship Between Years of Education and Annual Income  
-Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

Accepted Answer

A)  positive 
B)  negative 
C)  inverse 
D)  normative 
A)  positive 
B)  negative 
C)  inverse 
D)  normative

Question 14

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Accepted Answer

A) True 
 B)False

Question 15

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Accepted Answer

A) True 
 B)False

Question 16

Microeconomics is the study of

Accepted Answer

A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works. 
A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works.

Question 17

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Accepted Answer

A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin 
A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin

Question 18

Economists, like mathematicians, physicists, and biologists,

Accepted Answer

A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct. 
A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct.

Question 19

Use the following Figure to answer the question : Figure 2-3 :  
-Refer to Figure 2-3. What do the ovals represent in the figure?

Accepted Answer

Market for Goods and

Question 20

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Accepted Answer

A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists. 
A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists.

Historical episodes are not valuable to economists.

Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Use the following Figure to answer the question : 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

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Points inside the production possibilities frontier represent inefficient levels of production.

The second number in any ordered pair is

Use the following Figure to answer the question Figure: 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Use the following Figure to answer the question Figure: 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

One thing economists do to help them understand how the real world works is

Use the following Figure to answer the question : Figure 2-20 : Relationship Between Years of Education and Annual Income -Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Microeconomics is the study of

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Economists, like mathematicians, physicists, and biologists,

Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What do the ovals represent in the figure?

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

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

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the 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

Six Debates Over Macroeconomic Policy

Filters

Exam 2: Thinking Like an Economist

Historical episodes are not valuable to economists.

Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Use the following Figure to answer the question : 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

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Points inside the production possibilities frontier represent inefficient levels of production.

The second number in any ordered pair is

Use the following Figure to answer the question Figure: 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Use the following Figure to answer the question Figure: 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

One thing economists do to help them understand how the real world works is

Use the following Figure to answer the question : Figure 2-20 : Relationship Between Years of Education and Annual Income -Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Microeconomics is the study of

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Economists, like mathematicians, physicists, and biologists,

Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What do the ovals represent in the figure?

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

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

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the 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

Six Debates Over Macroeconomic Policy

Filters