Question 1

The circular-flow diagram is an example of

Accepted Answer

A)  a laboratory experiment. 
B)  an economic model. 
C)  a mathematical model. 
D)  All of the above are correct. 
A)  a laboratory experiment. 
B)  an economic model. 
C)  a mathematical model. 
D)  All of the above are correct.

Question 2

Figure 2-23  
-Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 3

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 4

Table 2-6
  
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Accepted Answer

The answer of Table 2-6
  
-Refer to Table 2-6....

Question 5

Figure 2-5  
-Refer to Figure 2-5. Inefficient production is represented by which points)?

Accepted Answer

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

Question 6

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Accepted Answer

A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology. 
A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology.

Question 7

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. In the ordered pair 8, 24)

Accepted Answer

A)  the x-coordinate is 8 and the y-coordinate is 24. 
B)  the x-coordinate is 24 and the y-coordinate is 8. 
C)  the numbers tell the location of the origin. 
D)  the 8 represents the price and the 24 represents the number of restaurant meals. 
A)  the x-coordinate is 8 and the y-coordinate is 24. 
B)  the x-coordinate is 24 and the y-coordinate is 8. 
C)  the numbers tell the location of the origin. 
D)  the 8 represents the price and the 24 represents the number of restaurant meals.

Question 8

When an economy is operating at a point on its production possibilities frontier, then

Accepted Answer

A)  consumers are content with the mix of goods and services that is being produced. 
B)  there is no way to produce more of one good without producing less of the other. 
C)  equal amounts of the two goods are being produced. 
D)  All of the above are correct. 
A)  consumers are content with the mix of goods and services that is being produced. 
B)  there is no way to produce more of one good without producing less of the other. 
C)  equal amounts of the two goods are being produced. 
D)  All of the above are correct.

Question 9

Figure 2-4  
-Refer to Figure 2-4. Unemployment could cause this economy to produce at which points)?

Accepted Answer

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

Question 10

Economists at the Department of Justice

Accepted Answer

A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget. 
A)  track the behavior of the nation's money supply. 
B)  advise Congress on economic matters. 
C)  help enforce the nation's antitrust laws. 
D)  prepare the federal budget.

Question 11

The decision of which assumptions to make is

Accepted Answer

A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method. 
A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method.

Question 12

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

Accepted Answer

A)  households provide firms with savings for investment. 
B)  households provide firms with labor, land, and capital. 
C)  firms provide households with output. 
D)  firms provide households with profit. 
A)  households provide firms with savings for investment. 
B)  households provide firms with labor, land, and capital. 
C)  firms provide households with output. 
D)  firms provide households with profit.

Question 13

Economists acting as scientists make positive statements, while economists acting as policy advisers make normative statements.

Accepted Answer

A) True 
 B)False

Question 14

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-2  
-Refer to Figure 2-2. Boxes A and B of this circular-flow diagram represent

Accepted Answer

A)  firms and households. 
B)  households and government. 
C)  the markets for goods and services and the markets for financial assets. 
D)  the markets for goods and the markets for services. 
A)  firms and households. 
B)  households and government. 
C)  the markets for goods and services and the markets for financial assets. 
D)  the markets for goods and the markets for services.

Question 16

In the circular-flow diagram, households and firms are the decision makers.

Accepted Answer

A) True 
 B)False

Question 17

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Accepted Answer

A) True 
 B)False

Question 18

Economists speaking like scientists make

Accepted Answer

A)  normative statements. 
B)  prescriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be. 
A)  normative statements. 
B)  prescriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be.

Question 19

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

Accepted Answer

A)  society's preferences. 
B)  the available production technology. 
C)  a fair distribution of the output. 
D)  the available demand for the output. 
A)  society's preferences. 
B)  the available production technology. 
C)  a fair distribution of the output. 
D)  the available demand for the output.

Question 20

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

Accepted Answer

A)  wages 
B)  income 
C)  capital 
D)  rent 
A)  wages 
B)  income 
C)  capital 
D)  rent

Exam 2: Thinking Like an Economist

The circular-flow diagram is an example of

Figure 2-23 -Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Figure 2-5 -Refer to Figure 2-5. Inefficient production is represented by which points)?

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair 8, 24)

When an economy is operating at a point on its production possibilities frontier, then

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which points)?

Economists at the Department of Justice

The decision of which assumptions to make is

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

Economists acting as scientists make positive statements, while economists acting as policy advisers make normative statements.

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Figure 2-2 -Refer to Figure 2-2. Boxes A and B of this circular-flow diagram represent

In the circular-flow diagram, households and firms are the decision makers.

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Economists speaking like scientists make

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

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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