Question 1

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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

Accepted Answer

Market for Goods and

Question 4

Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

Accepted Answer

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

Question 5

Table 2-6
  
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Accepted Answer

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

Question 6

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 7

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one sofa is

Accepted Answer

The answer of Figure 2-15  
-Refer to Figure 2-15....

Question 9

The circular-flow diagram is a

Accepted Answer

A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works. 
A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works.

Question 10

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 11

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 12

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Accepted Answer

A) True 
 B)False

Question 13

Figure 2-5  
-Refer to Figure 2-5. It is possible for this economy to produce

Accepted Answer

A)  60 dryers and 50 washers. 
B)  60 dryers and 60 washers. 
C)  80 dryers and 50 washers. 
D)  All of the above. 
A)  60 dryers and 50 washers. 
B)  60 dryers and 60 washers. 
C)  80 dryers and 50 washers. 
D)  All of the above.

Question 14

Table 2-5
  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Accepted Answer

A)  200 bushels of wheat 
B)  400 bushels of wheat 
C)  600 bushels of wheat 
D)  800 bushels of wheat 
A)  200 bushels of wheat 
B)  400 bushels of wheat 
C)  600 bushels of wheat 
D)  800 bushels of wheat

Question 15

In economics, capital refers to

Accepted Answer

A)  the finances necessary for firms to produce their products. 
B)  buildings and machines used in the production process. 
C)  the money households use to purchase firms' output. 
D)  stocks and bonds. 
A)  the finances necessary for firms to produce their products. 
B)  buildings and machines used in the production process. 
C)  the money households use to purchase firms' output. 
D)  stocks and bonds.

Question 16

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 17

A duty of economists at the Department of Labor is to

Accepted Answer

A)  analyze data on workers. 
B)  schedule federal holidays. 
C)  enforce the nation's antitrust laws. 
D)  All of the above are correct. 
A)  analyze data on workers. 
B)  schedule federal holidays. 
C)  enforce the nation's antitrust laws. 
D)  All of the above are correct.

Question 18

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 19

In the circular-flow diagram,

Accepted Answer

A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households. 
A)  firms are buyers in the markets for goods and services. 
B)  households are sellers in the markets for the factors of production. 
C)  firms are sellers in the markets for factors of production and in the markets for goods and services. 
D)  dollars that are spent on goods and services flow directly from firms to households.

Question 20

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Economic growth causes a production possibilities frontier to shift outward.

John Maynard Keynes referred to economics as an easy subject,

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

Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one sofa is

The circular-flow diagram is a

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Figure 2-5 -Refer to Figure 2-5. It is possible for this economy to produce

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

In economics, capital refers to

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

A duty of economists at the Department of Labor is to

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,

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

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

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters