Question 1

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Accepted Answer

A) True 
 B)False

Question 2

Economists view positive statements as

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 3

Economists usually have to make do with whatever data the world happens to give them.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

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

Question 5

Use the following Figure to answer the question Figure: 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of goods and services?

Accepted Answer

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

Question 6

Use the following Figure to answer the question :  Figure 2-9
Panel a)
  
Panel b)  
-Refer to Figure 2-9, Panel a). Production at point K is

Accepted Answer

A)  possible and efficient. 
B)  possible but inefficient. 
C)  impossible but efficient. 
D)  impossible and inefficient. 
A)  possible and efficient. 
B)  possible but inefficient. 
C)  impossible but efficient. 
D)  impossible and inefficient.

Question 7

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 8

When constructing a production possibilities frontier, which of the following assumptions is not made?

Accepted Answer

A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period. 
A)  The economy produces only two goods or two types of goods. 
B)  Firms produce goods using factors of production. 
C)  The technology available to firms is given. 
D)  The quantities of the factors of production that are available are increasing over the relevant time period.

Question 9

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 10

Use the following Figure to answer the question Figure: 2-1  
-Refer to Figure 2-1. Which arrow represents the flow of spending by households?

Accepted Answer

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

Question 11

Use the following Figure to answer the question : Figure 2-8 :
 
-Refer to Figure 2-8. To reach point L, the economy would have to

Accepted Answer

A)  acquire more resources or experience a technological advance. 
B)  begin using its available resources more efficiently than it is currently using them. 
C)  shift resources away from the production of nails and toward the production of hammers. 
D)  None of the above are correct; the economy will never be able to reach point L. 
A)  acquire more resources or experience a technological advance. 
B)  begin using its available resources more efficiently than it is currently using them. 
C)  shift resources away from the production of nails and toward the production of hammers. 
D)  None of the above are correct; the economy will never be able to reach point L.

Question 12

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following allows you to provide information about the relationship between two variables?

Accepted Answer

A)  coordinate system. 
B)  pie chart 
C)  bar graph 
D)  time-series graph 
A)  coordinate system. 
B)  pie chart 
C)  bar graph 
D)  time-series graph

Question 14

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 15

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 16

The circular-flow diagram is a

Accepted Answer

A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works. 
A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works.

Question 17

Use the following Figure to answer the question : Figure 2-17  
-Refer to Figure 2-17. The movement from point B to point C could have been caused by

Accepted Answer

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

Question 18

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Accepted Answer

A)  amount of the other good that must be given up. 
B)  market price of the additional amount produced. 
C)  amount of resources that must be devoted to its production. 
D)  number of dollars that must be spent to produce it. 
A)  amount of the other good that must be given up. 
B)  market price of the additional amount produced. 
C)  amount of resources that must be devoted to its production. 
D)  number of dollars that must be spent to produce it.

Question 19

Use the following Figure to answer the question : Figure 2-23 :  
-Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

Accepted Answer

A) True 
 B)False

Question 20

A macroeconomist - as opposed to a microeconomist - might study the effect of

Accepted Answer

A)  changes in the money supply on the inflation rate. 
B)  an increase in the gas tax on fuel consumption. 
C)  a technological advance on the natural gas industry. 
D)  a hurricane on prices in the orange industry. 
A)  changes in the money supply on the inflation rate. 
B)  an increase in the gas tax on fuel consumption. 
C)  a technological advance on the natural gas industry. 
D)  a hurricane on prices in the orange industry.

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Economists view positive statements as

Economists usually have to make do with whatever data the world happens to give them.

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

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of goods and services?

Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a). Production at point K is

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

When constructing a production possibilities frontier, which of the following assumptions is not made?

Which of these terms are used interchangeably?

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of spending by households?

Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. To reach point L, the economy would have to

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Which of the following allows you to provide information about the relationship between two variables?

A model can be accurately described as a

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

The circular-flow diagram is a

Use the following Figure to answer the question : Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C could have been caused by

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

A macroeconomist - as opposed to a microeconomist - might study the effect of

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

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Exam 2: Thinking Like an Economist

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Economists view positive statements as

Economists usually have to make do with whatever data the world happens to give them.

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

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of goods and services?

Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a). Production at point K is

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

When constructing a production possibilities frontier, which of the following assumptions is not made?

Which of these terms are used interchangeably?

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of spending by households?

Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. To reach point L, the economy would have to

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Which of the following allows you to provide information about the relationship between two variables?

A model can be accurately described as a

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

The circular-flow diagram is a

Use the following Figure to answer the question : Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C could have been caused by

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

A macroeconomist - as opposed to a microeconomist - might study the effect of

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