Question 1

You know an economist has crossed the line from scientist to policy adviser when he or she

Accepted Answer

A)  claims that the problem at hand is widely misunderstood by non-economists. 
B)  talks about the evidence. 
C)  makes normative statements. 
D)  makes a claim about how the world is. 
A)  claims that the problem at hand is widely misunderstood by non-economists. 
B)  talks about the evidence. 
C)  makes normative statements. 
D)  makes a claim about how the world is.

Question 2

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

Accepted Answer

A)  When the minimum wage is increased, unemployment is a predictable consequence. 
B)  The income tax rate should be increased to offset the budget deficit. 
C)  Increasing government spending is the best way to help the economy move out of a recession. 
D)  More than one of the above are positive statements. 
A)  When the minimum wage is increased, unemployment is a predictable consequence. 
B)  The income tax rate should be increased to offset the budget deficit. 
C)  Increasing government spending is the best way to help the economy move out of a recession. 
D)  More than one of the above are positive statements.

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. Which combination of points show production possibilities only achievable with improvements in technology or increases in resources?

Accepted Answer

A)  Q, R, U, and V 
B)  S and X 
C)  T and W 
D)  None of the above is correct. 
A)  Q, R, U, and V 
B)  S and X 
C)  T and W 
D)  None of the above is correct.

Question 4

In the circular-flow diagram, which of the following items does not flow from households to firms?

Accepted Answer

A)  revenue 
B)  land, labor, and capital 
C)  factors of production 
D)  profit 
A)  revenue 
B)  land, labor, and capital 
C)  factors of production 
D)  profit

Question 5

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 6

The President receives economic policy advice from economists at each of the following except

Accepted Answer

A)  the Council of Economic Advisors. 
B)  the Department of the Treasury. 
C)  the Congressional Budget office. 
D)  the Department of Labor. 
A)  the Council of Economic Advisors. 
B)  the Department of the Treasury. 
C)  the Congressional Budget office. 
D)  the Department of Labor.

Question 7

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Accepted Answer

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

Question 8

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

Accepted Answer

The answer of Figure 2-3  
-Refer to Figure 2-3....

Question 9

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 10

The decision of which assumptions to make is

Accepted Answer

A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method. 
A)  an easy decision for an economist, but a difficult decision for a physicist or a chemist. 
B)  not a particularly important decision for an economist. 
C)  usually regarded as an art in scientific thinking. 
D)  usually regarded as the easiest part of the scientific method.

Question 11

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

Accepted Answer

A)  An economist must also be a mathematician, historian, statesman, and philosopher in some degree. 
B)  An economist must understand symbols and speak in words. 
C)  An economist must be purposeful and disinterested in a simultaneous mood. 
D)  An economist must understand environmental science, regulation, and political science. 
A)  An economist must also be a mathematician, historian, statesman, and philosopher in some degree. 
B)  An economist must understand symbols and speak in words. 
C)  An economist must be purposeful and disinterested in a simultaneous mood. 
D)  An economist must understand environmental science, regulation, and political science.

Question 12

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

Accepted Answer

A)  The opportunity cost of a bushel of corn does not depend on how many bushels of wheat are being produced. 
B)  The opportunity cost of a bushel of corn increases as more corn is produced. 
C)  The opportunity cost of a bushel of corn decreases as more corn is produced. 
D)  The opportunity cost of a bushel of wheat decreases as more wheat is produced. 
A)  The opportunity cost of a bushel of corn does not depend on how many bushels of wheat are being produced. 
B)  The opportunity cost of a bushel of corn increases as more corn is produced. 
C)  The opportunity cost of a bushel of corn decreases as more corn is produced. 
D)  The opportunity cost of a bushel of wheat decreases as more wheat is produced.

Question 13

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 14

In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now?

Accepted Answer

A)  Unemployed labor is put to work producing jam and bread. 
B)  The economy puts its idle capital to work producing jam and bread. 
C)  The economy experiences economic growth. 
D)  All of the above are correct. 
A)  Unemployed labor is put to work producing jam and bread. 
B)  The economy puts its idle capital to work producing jam and bread. 
C)  The economy experiences economic growth. 
D)  All of the above are correct.

Question 15

Economists speaking like scientists make

Accepted Answer

A)  positive statements. 
B)  prescriptive statements. 
C)  claims about how the world should be. 
D)  More than one of the above is correct. 
A)  positive statements. 
B)  prescriptive statements. 
C)  claims about how the world should be. 
D)  More than one of the above is correct.

Question 16

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 17

The art in scientific thinking is

Accepted Answer

A)  finding the right problem to study. 
B)  deciding which assumptions to make. 
C)  the ability to make an abstract subject easy to understand. 
D)  not something in which economists have to be skilled. 
A)  finding the right problem to study. 
B)  deciding which assumptions to make. 
C)  the ability to make an abstract subject easy to understand. 
D)  not something in which economists have to be skilled.

Question 18

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 19

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 20

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.

Exam 2: Thinking Like an Economist

You know an economist has crossed the line from scientist to policy adviser when he or she

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

In the circular-flow diagram, which of the following items does not flow from households to firms?

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

The President receives economic policy advice from economists at each of the following except

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

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

Economists try to address their subject with a scientist's objectivity.

The decision of which assumptions to make is

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

The scientific method can be applied to the study of economics.

In a certain economy, jam and bread are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more jam and more bread, relative to the quantities of those goods that are being produced now?

Economists speaking like scientists make

A duty of economists at the Department of Labor is to

The art in scientific thinking is

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

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

The scientific method is

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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