Question 1

Historical episodes are

Accepted Answer

A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again. 
A)  valuable to economists because they allow economists to see how the science of economics has evolved. 
B)  valuable to economists because they allow economists to evaluate economic theories. 
C)  not of concern to economists because economics is about predicting the future, not dwelling on the past. 
D)  not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again.

Question 2

The Economic Report of the President

Accepted Answer

A)  discusses recent developments in the economy and presents analysis of current policy issues. 
B)  is written by the Council of Economic Advisers. 
C)  is the responsibility of the economists at the Office of Management and Budget. 
D)  Both a and b are correct. 
A)  discusses recent developments in the economy and presents analysis of current policy issues. 
B)  is written by the Council of Economic Advisers. 
C)  is the responsibility of the economists at the Office of Management and Budget. 
D)  Both a and b are correct.

Question 3

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 4

Microeconomics is the study of

Accepted Answer

A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works. 
A)  how money affects the economy. 
B)  how individual households and firms make decisions. 
C)  how government affects the economy. 
D)  how the economy as a whole works.

Question 5

Figure 2-7  
-Refer to Figure 2-7. This economy cannot 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 6

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Accepted Answer

The answer of Is the following a positive or normative...

Question 7

Figure 2-6  
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A)  This economy has moved from a point of inefficient production to a point of efficient production. 
B)  This economy has experienced economic growth. 
C)  This economy has experienced an increase in employment. 
D)  None of the above is correct. 
A)  This economy has moved from a point of inefficient production to a point of efficient production. 
B)  This economy has experienced economic growth. 
C)  This economy has experienced an increase in employment. 
D)  None of the above is correct.

Question 8

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 9

Another term for factors of production is

Accepted Answer

A)  inputs. 
B)  output. 
C)  goods. 
D)  services. 
A)  inputs. 
B)  output. 
C)  goods. 
D)  services.

Question 10

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 11

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-3  
-Refer to Figure 2-3. What do the rectangles represent in the figure?

Accepted Answer

The answer of Figure 2-3  
-Refer to Figure 2-3....

Question 13

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 14

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

The answer of Is the following a positive or normative...

Question 15

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Accepted Answer

A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate 
A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate

Question 16

When two variables have a positive correlation,

Accepted Answer

A)  when the x-variable increases, the y-variable decreases. 
B)  when the x-variable decreases, the y-variable increases. 
C)  when the x-variable increases, the y-variable increases. 
D)  More than one of the above is correct. 
A)  when the x-variable increases, the y-variable decreases. 
B)  when the x-variable decreases, the y-variable increases. 
C)  when the x-variable increases, the y-variable increases. 
D)  More than one of the above is correct.

Question 17

The slope of a fairly flat upward-sloping line will be a

Accepted Answer

A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number. 
A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number.

Question 18

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)  negative economic statement. 
B)  positive economic statement. 
C)  normative economic statement. 
D)  statement that contradicts one of the basic principles of economics. 
A)  negative economic statement. 
B)  positive economic statement. 
C)  normative economic statement. 
D)  statement that contradicts one of the basic principles of economics.

Question 19

Production possibilities frontiers are usually bowed outward. This is because

Accepted Answer

A)  the more resources a society uses to produce one good, the fewer resources it has available to produce another good. 
B)  the opportunity cost of producing a good decreases as more and more of that good is produced. 
C)  of the effects of technological change. 
D)  resources are specialized; that is, some are better at producing particular goods rather than other goods. 
A)  the more resources a society uses to produce one good, the fewer resources it has available to produce another good. 
B)  the opportunity cost of producing a good decreases as more and more of that good is produced. 
C)  of the effects of technological change. 
D)  resources are specialized; that is, some are better at producing particular goods rather than other goods.

Question 20

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Historical episodes are

The Economic Report of the President

When a variable that is named on an axis of a graph changes, the curve shifts.

Microeconomics is the study of

Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which points)?

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Another term for factors of production is

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Figure 2-3 -Refer to Figure 2-3. What do the rectangles represent in the figure?

Points inside the production possibilities frontier represent feasible levels of production.

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

When two variables have a positive correlation,

The slope of a fairly flat upward-sloping line will be a

"Prices rise when the quantity of money rises rapidly" is an example of a

Production possibilities frontiers are usually bowed outward. This is because

Microeconomics and macroeconomics are closely intertwined.

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

Filters