Question 1

Figure 2-5  
-Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Accepted Answer

A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point C. 
A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point C.

Question 2

Albert Einstein once made the following observation about science:

Accepted Answer

A)  "The whole of science is nothing more than the refinement of everyday thinking." 
B)  "The whole of science is nothing more than an interesting intellectual exercise." 
C)  "In order to understand science, one must rely solely on abstraction." 
D)  "In order to understand science, one must transcend everyday thinking." 
A)  "The whole of science is nothing more than the refinement of everyday thinking." 
B)  "The whole of science is nothing more than an interesting intellectual exercise." 
C)  "In order to understand science, one must rely solely on abstraction." 
D)  "In order to understand science, one must transcend everyday thinking."

Question 3

Figure 2-19
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service  
-Refer to Figure 2-19. Which of the following conclusions should not be drawn from observing this graph?

Accepted Answer

A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers. 
A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers.

Question 4

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 5

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-13  
-Refer to Figure 2-13. One difference between points F and G is that

Accepted Answer

A)  Point G is unattainable with current resources, but point F is attainable. 
B)  All resources are fully employed at point F but there is unemployment at point G. 
C)  More output can be produced at point F but no additional output can be produced at point G. 
D)  This economy produces more cookies at point G than at point F. 
A)  Point G is unattainable with current resources, but point F is attainable. 
B)  All resources are fully employed at point F but there is unemployment at point G. 
C)  More output can be produced at point F but no additional output can be produced at point G. 
D)  This economy produces more cookies at point G than at point F.

Question 7

Figure 2-4  
-Refer to Figure 2-4. This economy cannot produce at which points)?

Accepted Answer

A)  Q 
B)  Q, S 
C)  Q, S, T 
D)  S 
A)  Q 
B)  Q, S 
C)  Q, S, T 
D)  S

Question 8

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 9

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. What is the opportunity cost of moving from point T to point R?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 10

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Accepted Answer

A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias. 
A)  sound logic. 
B)  reverse causality. 
C)  omitted variables. 
D)  bias.

Question 11

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Accepted Answer

A)  economists have not yet convinced the general public that the policies are undesirable. 
B)  economists engage in positive analysis, not normative analysis. 
C)  economists have values that are different from the values of most non-economists. 
D)  economists' theories are not easily confirmed or refuted in laboratory analysis. 
A)  economists have not yet convinced the general public that the policies are undesirable. 
B)  economists engage in positive analysis, not normative analysis. 
C)  economists have values that are different from the values of most non-economists. 
D)  economists' theories are not easily confirmed or refuted in laboratory analysis.

Question 12

Figure 2-11  
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A)  simultaneous technological advances in the book and DVD industries. 
B)  a reallocation of resources away from the production of DVDs and toward the production of books. 
C)  economic growth. 
D)  All of the above are correct. 
A)  simultaneous technological advances in the book and DVD industries. 
B)  a reallocation of resources away from the production of DVDs and toward the production of books. 
C)  economic growth. 
D)  All of the above are correct.

Question 13

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. The slope of the line containing points A and B is

Accepted Answer

A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2. 
A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2.

Question 14

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A)  enforce the nation's antitrust laws. 
B)  set the nation's monetary policy. 
C)  provide evidence that incumbent members of Congress are performing well in their jobs. 
D)  provide independent evaluations of policy proposals. 
A)  enforce the nation's antitrust laws. 
B)  set the nation's monetary policy. 
C)  provide evidence that incumbent members of Congress are performing well in their jobs. 
D)  provide independent evaluations of policy proposals.

Question 15

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense. 
A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense.

Question 16

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Accepted Answer

The answer of Suppose a war in the Middle East...

Question 17

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 18

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 19

In the circular-flow diagram, which of the following items flows from households to firms 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 20

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"

Exam 2: Thinking Like an Economist

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Albert Einstein once made the following observation about science:

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

The President counts among his economic advisors the Congressional Budget Office.

Figure 2-13 -Refer to Figure 2-13. One difference between points F and G is that

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which points)?

Economists believe that production possibilities frontiers rarely have a bowed shape.

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. What is the opportunity cost of moving from point T to point R?

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points A and B is

Congress relies on economists at the Congressional Budget Office to

John Maynard Keynes referred to economics as an easy subject,

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

The scientific method can be applied to the study of economics.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

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

Which of these terms are used interchangeably?

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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