Question 1

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership. 
A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership.

Question 2

Economic models

Accepted Answer

A)  cannot be useful if they are based on false assumptions. 
B)  were once thought to be useful, but that is no longer true. 
C)  must incorporate all aspects of the economy if they are to be useful. 
D)  can be useful, even if they are not particularly realistic. 
A)  cannot be useful if they are based on false assumptions. 
B)  were once thought to be useful, but that is no longer true. 
C)  must incorporate all aspects of the economy if they are to be useful. 
D)  can be useful, even if they are not particularly realistic.

Question 3

Figure 2-8  
-Refer to Figure 2-8. Inefficient production is represented by which points)?

Accepted Answer

A)  K, M 
B)  L 
C)  L, M 
D)  M 
A)  K, M 
B)  L 
C)  L, M 
D)  M

Question 4

In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A)  omitted variables. 
B)  reverse causality. 
C)  government propaganda. 
D)  medical incompetence. 
A)  omitted variables. 
B)  reverse causality. 
C)  government propaganda. 
D)  medical incompetence.

Question 5

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Accepted Answer

A)  interest 
B)  capital 
C)  spending by households on goods 
D)  spending by households on services 
A)  interest 
B)  capital 
C)  spending by households on goods 
D)  spending by households on services

Question 6

Historical episodes are not valuable to economists.

Accepted Answer

A) True 
 B)False

Question 7

In the circular-flow diagram, firms produce

Accepted Answer

A)  goods and services using factors of production. 
B)  output using inputs. 
C)  factors of production using goods and services. 
D)  Both a) and b) are correct. 
A)  goods and services using factors of production. 
B)  output using inputs. 
C)  factors of production using goods and services. 
D)  Both a) and b) are correct.

Question 8

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use an)

Accepted Answer

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

Question 9

The slope of a line passing through the points 15, 3) and 10, 6) is

Accepted Answer

A)  -3/5. 
B)  3/5. 
C)  -5/3. 
D)  5/3. 
A)  -3/5. 
B)  3/5. 
C)  -5/3. 
D)  5/3.

Question 10

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-23  
-Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-4  
-Refer to Figure 2-4. This economy has the ability to produce at which points)?

Accepted Answer

A)  Q, R, T, U 
B)  R, T, U 
C)  R, U 
D)  T 
A)  Q, R, T, U 
B)  R, T, U 
C)  R, U 
D)  T

Question 13

When economists are trying to help improve the world, they are

Accepted Answer

A)  in the realm of positive economics rather than normative economics. 
B)  in the realm of macroeconomics rather than microeconomics. 
C)  scientists. 
D)  policy advisers. 
A)  in the realm of positive economics rather than normative economics. 
B)  in the realm of macroeconomics rather than microeconomics. 
C)  scientists. 
D)  policy advisers.

Question 14

Figure 2-7  
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources. 
A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources.

Question 15

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 16

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A)  Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future. 
B)  Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be. 
C)  Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation. 
D)  Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements. 
A)  Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future. 
B)  Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be. 
C)  Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation. 
D)  Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.

Question 17

Which of the following statements about economic models is correct?

Accepted Answer

A)  Economic models are built to mirror reality exactly. 
B)  Economic models are useful, but they should not be used for the purpose of improving public policies. 
C)  Because economic models omit many details, they allow us to see what is truly important. 
D)  Economic models seldom incorporate equations or diagrams. 
A)  Economic models are built to mirror reality exactly. 
B)  Economic models are useful, but they should not be used for the purpose of improving public policies. 
C)  Because economic models omit many details, they allow us to see what is truly important. 
D)  Economic models seldom incorporate equations or diagrams.

Question 18

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 19

Factors of production are

Accepted Answer

A)  the mathematical calculations firms make in determining their optimal production levels. 
B)  social and political conditions that affect production. 
C)  the physical relationships between economic inputs and outputs. 
D)  inputs into the production process. 
A)  the mathematical calculations firms make in determining their optimal production levels. 
B)  social and political conditions that affect production. 
C)  the physical relationships between economic inputs and outputs. 
D)  inputs into the production process.

Question 20

Figure 2-23  
-Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

A macroeconomist - as opposed to a microeconomist - would study

Economic models

Figure 2-8 -Refer to Figure 2-8. Inefficient production is represented by which points)?

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Historical episodes are not valuable to economists.

In the circular-flow diagram, firms produce

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use an)

The slope of a line passing through the points 15, 3) and 10, 6) is

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Figure 2-4 -Refer to Figure 2-4. This economy has the ability to produce at which points)?

When economists are trying to help improve the world, they are

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

One way to characterize the difference between positive statements and normative statements is as follows:

Which of the following statements about economic models is correct?

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

Factors of production are

Figure 2-23 -Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

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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