Question 1

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)  opinions and education. 
B)  opinions and values. 
C)  scientific judgments and education. 
D)  scientific judgments and values. 
A)  opinions and education. 
B)  opinions and values. 
C)  scientific judgments and education. 
D)  scientific judgments and values.

Question 2

Figure 2-13  
-Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Accepted Answer

A)  I, L 
B)  G, H 
C)  J, K 
D)  F, G 
A)  I, L 
B)  G, H 
C)  J, K 
D)  F, G

Question 3

Figure 2-8  
-Refer to Figure 2-8. To reach point L, the economy would have to

Accepted Answer

A)  acquire more resources or experience a technological advance. 
B)  begin using its available resources more efficiently than it is currently using them. 
C)  shift resources away from the production of nails and toward the production of hammers. 
D)  None of the above are correct; the economy will never be able to reach point L. 
A)  acquire more resources or experience a technological advance. 
B)  begin using its available resources more efficiently than it is currently using them. 
C)  shift resources away from the production of nails and toward the production of hammers. 
D)  None of the above are correct; the economy will never be able to reach point L.

Question 4

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)  there will be a movement along the curve. 
B)  the curve will rotate clockwise. 
C)  the curve will be unaffected since only the variables on the axis affect the curve. 
D)  the curve will shift. 
A)  there will be a movement along the curve. 
B)  the curve will rotate clockwise. 
C)  the curve will be unaffected since only the variables on the axis affect the curve. 
D)  the curve will shift.

Question 5

Figure 2-5  
-Refer to Figure 2-5. It is not possible for this economy to produce at point

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 6

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A)  all resources are scarce. 
B)  economic growth is always occurring. 
C)  the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing. 
D)  the only way to get more of one good is to get less of the other. 
A)  all resources are scarce. 
B)  economic growth is always occurring. 
C)  the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing. 
D)  the only way to get more of one good is to get less of the other.

Question 7

Figure 2-10
Panel a) Panel b)
    
-Refer to Figure 2-10, Panel a). Production at point Y is

Accepted Answer

A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient. 
A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient.

Question 8

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 9

Table 2-2
The following table contains some production possibilities for an economy for a given year:
  
-Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  6000. 
B)  5500. 
C)  5000. 
D)  4500. 
A)  6000. 
B)  5500. 
C)  5000. 
D)  4500.

Question 10

Figure 2-22  
-Refer to Figure 2-22. What are the coordinates of point C?

Accepted Answer

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

Question 11

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. Which points) on the graph isare) efficient production possibilities?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 12

An assumption an economist might make while studying international trade is

Accepted Answer

A)  there are only two countries. 
B)  countries only produce two goods. 
C)  technology does not change. 
D)  All of the above are possible assumptions. 
A)  there are only two countries. 
B)  countries only produce two goods. 
C)  technology does not change. 
D)  All of the above are possible assumptions.

Question 13

A demand curve shows the relationship between price and

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded. 
A)  income. 
B)  quantity demanded. 
C)  production. 
D)  income and quantity demanded.

Question 14

In the circular flow diagram, when Daphne purchases a new mobile phone, she participates in the markets for

Accepted Answer

The answer of In the circular flow diagram, when Daphne...

Question 15

Economic models

Accepted Answer

A)  are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models. 
B)  are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models. 
C)  are simplifications of reality, and in this respect economic models are no different from other scientific models. 
D)  are simplifications of reality, and in this respect economic models are very different from other scientific models. 
A)  are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models. 
B)  are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models. 
C)  are simplifications of reality, and in this respect economic models are no different from other scientific models. 
D)  are simplifications of reality, and in this respect economic models are very different from other scientific models.

Question 16

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Accepted Answer

A)  the $50 represents a cost of production for Denny's firm. 
B)  the $50 represents wages, rent, and profit to Denny's firm. 
C)  Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton. 
D)  Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton. 
A)  the $50 represents a cost of production for Denny's firm. 
B)  the $50 represents wages, rent, and profit to Denny's firm. 
C)  Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton. 
D)  Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.

Question 17

Figure 2-5  
-Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Accepted Answer

A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point C. 
A)  0 washers. 
B)  20 washers. 
C)  40 washers. 
D)  None of the above; the economy cannot move from point D to point C.

Question 18

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 19

Positive statements can be evaluated using data alone, but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 20

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Figure 2-13 -Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Figure 2-8 -Refer to Figure 2-8. To reach point L, the economy would have to

When a relevant variable that is not named on either axis changes,

Figure 2-5 -Refer to Figure 2-5. It is not possible for this economy to produce at point

The bowed shape of the production possibilities frontier can be explained by the fact that

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a). Production at point Y is

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Table 2-2 The following table contains some production possibilities for an economy for a given year: -Refer to Table 2-2. If the production possibilities frontier is bowed outward, then "?" could be

Figure 2-22 -Refer to Figure 2-22. What are the coordinates of point C?

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. Which points) on the graph isare) efficient production possibilities?

An assumption an economist might make while studying international trade is

A demand curve shows the relationship between price and

In the circular flow diagram, when Daphne purchases a new mobile phone, she participates in the markets for

Economic models

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Historical episodes are

Positive statements can be evaluated using data alone, but normative statements cannot.

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

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

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