Question 1

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)  labor 
B)  land 
C)  capital 
D)  money 
A)  labor 
B)  land 
C)  capital 
D)  money

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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. The opportunity cost of moving from point U to point R is

Accepted Answer

A)  60 bushels of apples. 
B)  80 bushels of apples. 
C)  80 sweaters. 
D)  160 sweaters. 
A)  60 bushels of apples. 
B)  80 bushels of apples. 
C)  80 sweaters. 
D)  160 sweaters.

Question 4

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 5

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Figure 2-7  
-Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Accepted Answer

A)  0 engines and 40 tvs. 
B)  10 engines and 35 tvs. 
C)  40 engines and 0 tvs. 
D)  40 engines and 40 tvs. 
A)  0 engines and 40 tvs. 
B)  10 engines and 35 tvs. 
C)  40 engines and 0 tvs. 
D)  40 engines and 40 tvs.

Question 8

The institution that sets the nation's monetary policy is called the

Accepted Answer

The answer of The institution that sets the nation's monetary...

Question 9

In the simple circular-flow diagram, households

Accepted Answer

A)  are the only decision makers. 
B)  own the factors of production. 
C)  are buyers of inputs. 
D)  consume only some of the goods and services that firms produce. 
A)  are the only decision makers. 
B)  own the factors of production. 
C)  are buyers of inputs. 
D)  consume only some of the goods and services that firms produce.

Question 10

When economists make

Accepted Answer

A)  positive statements, they are speaking not as scientists but as policy advisers. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as scientists but as policy advisers. 
D)  normative statements, they are speaking not as policy advisers but as model-builders. 
A)  positive statements, they are speaking not as scientists but as policy advisers. 
B)  positive statements, they are speaking not as scientists but as forecasters. 
C)  normative statements, they are speaking not as scientists but as policy advisers. 
D)  normative statements, they are speaking not as policy advisers but as model-builders.

Question 11

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 12

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Question 13

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 14

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-10
Panel a) Panel b)
    
-Refer to Figure 2-10, Panel a) and Panel b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel a) to Panel b)?

Accepted Answer

A)  The tradeoff between the production of tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production. 
A)  The tradeoff between the production of tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production.

Question 16

Figure 2-2  
-Refer to Figure 2-2. If Box A of this circular-flow diagram represents firms, then which box represents households?

Accepted Answer

A)  Box B 
B)  Box C 
C)  Box D 
D)  Any one of the other boxes B, C, or 
D)  could represent households. 
A)  Box B 
B)  Box C 
C)  Box D 
D)  Any one of the other boxes B, C, or 
D)  could represent households.

Question 17

Figure 2-6  
-Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Accepted Answer

A)  120 pillows and 320 blankets. 
B)  180 pillows and 180 blankets. 
C)  240 pillows and 200 blankets. 
D)  We would have to know the details of this economy's technology in order to determine this. 
A)  120 pillows and 320 blankets. 
B)  180 pillows and 180 blankets. 
C)  240 pillows and 200 blankets. 
D)  We would have to know the details of this economy's technology in order to determine this.

Question 18

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. If this economy devotes all of its available resources to producing apples, then it will produce

Accepted Answer

A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters. 
A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters.

Question 19

Figure 2-9
Panel a) Panel b)
    
-Refer to Figure 2-9, Panel a). The opportunity cost of moving from point M to point L is

Accepted Answer

A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee. 
A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee.

Question 20

Which of the following statements is correct about the roles of economists?

Accepted Answer

A)  Economists are best viewed as policy advisers. 
B)  Economists are best viewed as scientists. 
C)  In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists. 
D)  In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers. 
A)  Economists are best viewed as policy advisers. 
B)  Economists are best viewed as scientists. 
C)  In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists. 
D)  In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers.

Exam 2: Thinking Like an Economist

In the circular-flow diagram, which of the following is not a factor of production?

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

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. The opportunity cost of moving from point U to point R is

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

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

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

Figure 2-7 -Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

The institution that sets the nation's monetary policy is called the

In the simple circular-flow diagram, households

When economists make

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

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

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a) and Panel b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel a) to Panel b)?

Figure 2-2 -Refer to Figure 2-2. If Box A of this circular-flow diagram represents firms, then which box represents households?

Figure 2-6 -Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

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. If this economy devotes all of its available resources to producing apples, then it will produce

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a). The opportunity cost of moving from point M to point L is

Which of the following statements is correct about the roles of economists?

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