Question 1

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 2

Figure 2-22  
-Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Accepted Answer

The answer of Figure 2-22  
-Refer to Figure 2-22....

Question 3

Figure 2-10
Panel a) Panel b)
    
-Refer to Figure 2-10, Panel a). The opportunity cost of one sofa is highest when the economy produces

Accepted Answer

A)  0 sofas. 
B)  12 sofas. 
C)  20 sofas. 
D)  24 sofas. 
A)  0 sofas. 
B)  12 sofas. 
C)  20 sofas. 
D)  24 sofas.

Question 4

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A)  Gasoline prices ought to be lower than they are now. 
B)  The federal government should raise taxes on wealthy people. 
C)  The social security system is a good system and it deserves to be preserved as it is. 
D)  All of the above are normative statements. 
A)  Gasoline prices ought to be lower than they are now. 
B)  The federal government should raise taxes on wealthy people. 
C)  The social security system is a good system and it deserves to be preserved as it is. 
D)  All of the above are normative statements.

Question 5

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A)  A country produces only two goods or types of goods. 
B)  Technology does not change. 
C)  The amount of available resources does not change. 
D)  There is a fixed quantity of money. 
A)  A country produces only two goods or types of goods. 
B)  Technology does not change. 
C)  The amount of available resources does not change. 
D)  There is a fixed quantity of money.

Question 6

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Accepted Answer

A)  A ceiling on rents reduces the quantity and quality of housing available. 
B)  Fiscal policy has a significant stimulative impact on a less than fully employed economy. 
C)  The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. 
D)  The United States should implement universal health care for its citizens. 
A)  A ceiling on rents reduces the quantity and quality of housing available. 
B)  Fiscal policy has a significant stimulative impact on a less than fully employed economy. 
C)  The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. 
D)  The United States should implement universal health care for its citizens.

Question 7

With respect to how economists study the economy, which of the following statements is most accurate?

Accepted Answer

A)  Economists study the past, but they do not try to predict the future. 
B)  Economists use "rules of thumb" to predict the future. 
C)  Economists devise theories, collect data, and analyze the data to test the theories. 
D)  Economists use controlled experiments in much the same way that biologists and physicists do. 
A)  Economists study the past, but they do not try to predict the future. 
B)  Economists use "rules of thumb" to predict the future. 
C)  Economists devise theories, collect data, and analyze the data to test the theories. 
D)  Economists use controlled experiments in much the same way that biologists and physicists do.

Question 8

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)  households and firms are both buyers. 
B)  households and firms are both sellers. 
C)  households are buyers and firms are sellers. 
D)  households are sellers and firms are buyers. 
A)  households and firms are both buyers. 
B)  households and firms are both sellers. 
C)  households are buyers and firms are sellers. 
D)  households are sellers and firms are buyers.

Question 9

Figure 2-23  
-Refer to Figure 2-23. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Accepted Answer

A) True 
 B)False

Question 10

Positive statements are descriptive, while normative statements are prescriptive.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-23  
-Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Accepted Answer

A) True 
 B)False

Question 12

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good. 
A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good.

Question 13

Figure 2-7  
-Refer to Figure 2-7. Unemployment could cause this economy to produce at which points)?

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

Question 14

For economists, statements about the world are of two types:

Accepted Answer

A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements. 
A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements.

Question 15

Figure 2-11  
-Refer to Figure 2-11. Which of the following events would explain the shift of the production possibilities frontier from A to B?

Accepted Answer

A)  The economy's citizens developed an enhanced taste for books. 
B)  The economy experienced a technological advance in the production of books. 
C)  More capital became available in the economy. 
D)  More labor became available in the economy. 
A)  The economy's citizens developed an enhanced taste for books. 
B)  The economy experienced a technological advance in the production of books. 
C)  More capital became available in the economy. 
D)  More labor became available in the economy.

Question 16

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 17

The ordered pair that represents the origin on a graph is

Accepted Answer

A)  1, 1). 
B)  0, 0). 
C)  -1, -1). 
D)  ∞, ∞). 
A)  1, 1). 
B)  0, 0). 
C)  -1, -1). 
D)  ∞, ∞).

Question 18

Figure 2-23  
-Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 19

When two variables move in opposite directions, the curve relating them is

Accepted Answer

A)  upward sloping, and we say the variables are positively related. 
B)  upward sloping, and we say the variables are negatively related. 
C)  downward sloping, and we say the variables are positively related. 
D)  downward sloping, and we say the variables are negatively related. 
A)  upward sloping, and we say the variables are positively related. 
B)  upward sloping, and we say the variables are negatively related. 
C)  downward sloping, and we say the variables are positively related. 
D)  downward sloping, and we say the variables are negatively related.

Question 20

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.

Exam 2: Thinking Like an Economist

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

Figure 2-22 -Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a). The opportunity cost of one sofa is highest when the economy produces

Which of the following is an example of a normative, as opposed to positive, statement?

Which of the following is not an assumption of the productions possibilities frontier?

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

With respect to how economists study the economy, which of the following statements is most accurate?

In the markets for goods and services in the circular-flow diagram,

Figure 2-23 -Refer to Figure 2-23. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Positive statements are descriptive, while normative statements are prescriptive.

Figure 2-23 -Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Figure 2-7 -Refer to Figure 2-7. Unemployment could cause this economy to produce at which points)?

For economists, statements about the world are of two types:

Figure 2-11 -Refer to Figure 2-11. Which of the following events would explain the shift of the production possibilities frontier from A to B?

Just like other scientific models, economic models simplify reality using

The ordered pair that represents the origin on a graph is

Figure 2-23 -Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

When two variables move in opposite directions, the curve relating them is

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?

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 Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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