Question 1

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Accepted Answer

A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin 
A)  Isaac Newton 
B)  Albert Einstein 
C)  Adam Smith 
D)  Benjamin Franklin

Question 2

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Accepted Answer

A)  households 
B)  firms 
C)  government 
D)  markets for factors of production 
A)  households 
B)  firms 
C)  government 
D)  markets for factors of production

Question 3

The y-coordinate of an ordered pair specifies the

Accepted Answer

A)  diagonal location of the point. 
B)  vertical location of the point. 
C)  horizontal location of the point. 
D)  quadrant location in which the point is located. 
A)  diagonal location of the point. 
B)  vertical location of the point. 
C)  horizontal location of the point. 
D)  quadrant location in which the point is located.

Question 4

If a line passes through the points 20,5) and 10,10), then the slope of the line is -2.

Accepted Answer

A) True 
 B)False

Question 5

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 6

The circular-flow diagram

Accepted Answer

A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs, outputs, and dollars. 
D)  All of the above are correct. 
A)  is an economic model. 
B)  incorporates two types of decision makers: households and firms. 
C)  represents the flows of inputs, outputs, and dollars. 
D)  All of the above are correct.

Question 7

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

Accepted Answer

A)  Harry Truman 
B)  George Bernard Shaw 
C)  John Maynard Keynes 
D)  Ronald Reagan 
A)  Harry Truman 
B)  George Bernard Shaw 
C)  John Maynard Keynes 
D)  Ronald Reagan

Question 8

Figure 2-10
Panel a) Panel b)
    
-Refer to Figure 2-10, Panel a). The opportunity cost of one sofa is highest when the economy produces

Accepted Answer

A)  0 sofas. 
B)  12 sofas. 
C)  20 sofas. 
D)  24 sofas. 
A)  0 sofas. 
B)  12 sofas. 
C)  20 sofas. 
D)  24 sofas.

Question 9

Figure 2-22  
-Refer to Figure 2-22. What is the x-coordinate of point R?

Accepted Answer

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

Question 10

Figure 2-18
Relationship between Price and Restaurant Meals  
-Refer to Figure 2-18. The slope of the line containing points A and B is

Accepted Answer

A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2. 
A)  -1/2. 
B)  -2. 
C)  1/2. 
D)  2.

Question 11

Between the two ordered pairs 3, 6) and 7, 18), the slope is

Accepted Answer

A)  1/3 
B)  -1/3. 
C)  3. 
D)  -3. 
A)  1/3 
B)  -1/3. 
C)  3. 
D)  -3.

Question 12

The slope of a line that passes through the points 5, 8) and 12, 12) is

Accepted Answer

A)  -7/4. 
B)  -4/7. 
C)  4/7. 
D)  7/4. 
A)  -7/4. 
B)  -4/7. 
C)  4/7. 
D)  7/4.

Question 13

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods.

Question 14

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A)  Gasoline prices ought to be lower than they are now. 
B)  The federal government should raise taxes on wealthy people. 
C)  The social security system is a good system and it deserves to be preserved as it is. 
D)  All of the above are normative statements. 
A)  Gasoline prices ought to be lower than they are now. 
B)  The federal government should raise taxes on wealthy people. 
C)  The social security system is a good system and it deserves to be preserved as it is. 
D)  All of the above are normative statements.

Question 15

Figure 2-2  
-Refer to Figure 2-2. Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular­flow diagram, then Juan's income is represented by a flow of dollars

Accepted Answer

A)  from Box A to Box C. 
B)  from Box C to Box A. 
C)  from Box B to Box D. 
D)  from Box D to Box B. 
A)  from Box A to Box C. 
B)  from Box C to Box A. 
C)  from Box B to Box D. 
D)  from Box D to Box B.

Question 16

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 17

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 18

For an economist, the idea of making assumptions is regarded generally as a

Accepted Answer

A)  bad idea, since doing so leads to the omission of important ideas and variables from economic models. 
B)  bad idea, since doing so invariably leads to data-collection problems. 
C)  good idea, since doing so helps to simplify the complex world and make it easier to understand. 
D)  good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand. 
A)  bad idea, since doing so leads to the omission of important ideas and variables from economic models. 
B)  bad idea, since doing so invariably leads to data-collection problems. 
C)  good idea, since doing so helps to simplify the complex world and make it easier to understand. 
D)  good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand.

Question 19

Which of the following is not correct?

Accepted Answer

A)  Economists use some familiar words in specialized ways. 
B)  Economics has its own language and its own way of thinking, but few other fields of study do. 
C)  Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D)  The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live. 
A)  Economists use some familiar words in specialized ways. 
B)  Economics has its own language and its own way of thinking, but few other fields of study do. 
C)  Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D)  The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.

Question 20

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. What is the opportunity cost of moving from point T to point R?

Accepted Answer

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

Exam 2: Thinking Like an Economist

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

The y-coordinate of an ordered pair specifies the

If a line passes through the points 20,5) and 10,10), then the slope of the line is -2.

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

The circular-flow diagram

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a). The opportunity cost of one sofa is highest when the economy produces

Figure 2-22 -Refer to Figure 2-22. What is the x-coordinate of point R?

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points A and B is

Between the two ordered pairs 3, 6) and 7, 18), the slope is

The slope of a line that passes through the points 5, 8) and 12, 12) is

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Which of the following is an example of a normative, as opposed to positive, statement?

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Points outside the production possibilities frontier represent infeasible levels of production.

For an economist, the idea of making assumptions is regarded generally as a

Which of the following is not correct?

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. What is the opportunity cost of moving from point T to point R?

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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