Question 1

Which of the following is correct?

Accepted Answer

A)  A horizontal line has an infinite slope, and a vertical line has a zero slope. 
B)  A horizontal line has a slope of 1, and a vertical line has a slope of -1. 
C)  A horizontal line has a zero slope, and a vertical line has an infinite slope. 
D)  A horizontal line has a slope of -1, and a vertical line has a slope of 1. 
A)  A horizontal line has an infinite slope, and a vertical line has a zero slope. 
B)  A horizontal line has a slope of 1, and a vertical line has a slope of -1. 
C)  A horizontal line has a zero slope, and a vertical line has an infinite slope. 
D)  A horizontal line has a slope of -1, and a vertical line has a slope of 1.

Question 2

The scientific method is

Accepted Answer

A)  the use of modern technology to understand the way the world works. 
B)  the use of controlled laboratory experiments to understand the way the world works. 
C)  the dispassionate development and testing of theories about how the world works. 
D)  the search for evidence to support preconceived theories about how the world works. 
A)  the use of modern technology to understand the way the world works. 
B)  the use of controlled laboratory experiments to understand the way the world works. 
C)  the dispassionate development and testing of theories about how the world works. 
D)  the search for evidence to support preconceived theories about how the world works.

Question 3

When two variables have a positive correlation,

Accepted Answer

A)  they tend to move in opposite directions. 
B)  they tend to move in the same direction. 
C)  one variable will move while the other remains constant. 
D)  the variables' values are never negative. 
A)  they tend to move in opposite directions. 
B)  they tend to move in the same direction. 
C)  one variable will move while the other remains constant. 
D)  the variables' values are never negative.

Question 4

Figure 2-17  
-Refer to Figure 2-17. The movement from point B to point C is an)

Accepted Answer

A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed. 
A)  shift of the demand curve. 
B)  movement along the demand curve. 
C)  indication that the price of grapes has changed. 
D)  indication that the costs incurred by firms that produce grapes have changed.

Question 5

Figure 2-22  
-Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Accepted Answer

The answer of Figure 2-22  
-Refer to Figure 2-22....

Question 6

Figure 2-3  
-Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Accepted Answer

A)  produce and sell goods and services 
B)  hire and use factors of production 
C)  own and sell factors of production 
D)  exchange goods and services between firms and households 
A)  produce and sell goods and services 
B)  hire and use factors of production 
C)  own and sell factors of production 
D)  exchange goods and services between firms and households

Question 7

Table 2-3
Production Possibilities for Footville
  
-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)  400 socks 
B)  300 socks 
C)  200 socks 
D)  100 socks 
A)  400 socks 
B)  300 socks 
C)  200 socks 
D)  100 socks

Question 8

The most common data for testing economic theories come from

Accepted Answer

A)  carefully controlled and conducted laboratory experiments. 
B)  computer models of economies. 
C)  historical episodes of economic change. 
D)  centrally planned economies. 
A)  carefully controlled and conducted laboratory experiments. 
B)  computer models of economies. 
C)  historical episodes of economic change. 
D)  centrally planned economies.

Question 9

The field of economics is traditionally divided into two broad subfields,

Accepted Answer

A)  national economics and international economics. 
B)  consumer economics and producer economics. 
C)  private sector economics and public sector economics. 
D)  microeconomics and macroeconomics. 
A)  national economics and international economics. 
B)  consumer economics and producer economics. 
C)  private sector economics and public sector economics. 
D)  microeconomics and macroeconomics.

Question 10

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Accepted Answer

A)  the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B)  the tradeoff between production of jewelry and production of clothing 
C)  the opportunity cost of clothing in terms of jewelry 
D)  the effect of economic growth on production possibilities involving jewelry and clothing 
A)  the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing 
B)  the tradeoff between production of jewelry and production of clothing 
C)  the opportunity cost of clothing in terms of jewelry 
D)  the effect of economic growth on production possibilities involving jewelry and clothing

Question 11

Which of the following statements about models is correct?

Accepted Answer

A)  The more details a model includes, the better the model. 
B)  Models assume away irrelevant details. 
C)  Models cannot be used to explain how the economy functions. 
D)  Models cannot be used to make predictions. 
A)  The more details a model includes, the better the model. 
B)  Models assume away irrelevant details. 
C)  Models cannot be used to explain how the economy functions. 
D)  Models cannot be used to make predictions.

Question 12

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 13

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 14

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)  One economist believes the North American Free Trade Agreement NAFT
A)  has led to a loss of American jobs; another economist disputes this claim. 
B)  One economist believes that when income taxes are cut, people will increase their spending; another economist believes that when income taxes are cut, people will increase their saving. 
C)  One economist advises against increases in sales taxes because she thinks such increases are unfair to low- income people; another economist disputes the idea that increases in sales taxes are unfair to low-income people. 
D)  One economist believes that, prior to the Civil War, slavery contributed to economic growth in the South; another economist believes that slavery held back the South's economic growth. 
A)  One economist believes the North American Free Trade Agreement NAFT
A)  has led to a loss of American jobs; another economist disputes this claim. 
B)  One economist believes that when income taxes are cut, people will increase their spending; another economist believes that when income taxes are cut, people will increase their saving. 
C)  One economist advises against increases in sales taxes because she thinks such increases are unfair to low- income people; another economist disputes the idea that increases in sales taxes are unfair to low-income people. 
D)  One economist believes that, prior to the Civil War, slavery contributed to economic growth in the South; another economist believes that slavery held back the South's economic growth.

Question 15

Figure 2-22  
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively

Question 16

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 17

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good. 
A)  the nation is producing beyond its capacity, so inflation will occur. 
B)  the nation is not using all available resources or is using inferior technology or both. 
C)  the nation is producing an efficient combination of goods. 
D)  there will be a large opportunity cost if the nation tries to increase production of any good.

Question 20

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Accepted Answer

land, labo

Exam 2: Thinking Like an Economist

Which of the following is correct?

The scientific method is

When two variables have a positive correlation,

Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C is an)

Figure 2-22 -Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

The most common data for testing economic theories come from

The field of economics is traditionally divided into two broad subfields,

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Which of the following statements about models is correct?

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

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

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

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