Question 1

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

Accepted Answer

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

Question 2

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Accepted Answer

A)  The United States should not restrict employers from outsourcing work to foreign countries. 
B)  The United States should withdraw from the North American Free Trade Agreement (NAFT
A) . 
C)  The United States should eliminate agricultural subsidies. 
D)  Local and state governments should eliminate subsidies to professional sports franchises. 
A)  The United States should not restrict employers from outsourcing work to foreign countries. 
B)  The United States should withdraw from the North American Free Trade Agreement (NAFT
A) . 
C)  The United States should eliminate agricultural subsidies. 
D)  Local and state governments should eliminate subsidies to professional sports franchises.

Question 3

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Accepted Answer

A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology. 
A)  will never be able to produce. 
B)  can produce using all available resources and technology. 
C)  can produce using some portion, but not all, of its resources and technology. 
D)  may be able to produce in the future with more resources and/or superior technology.

Question 4

Figure 2-11  
-Refer to Figure 2-11. Which of the following events would explain the shift of the production possibilities frontier from A to B?

Accepted Answer

A)  The economy's citizens developed an enhanced taste for books. 
B)  The economy experienced a technological advance in the production of books. 
C)  More capital became available in the economy. 
D)  More labor became available in the economy. 
A)  The economy's citizens developed an enhanced taste for books. 
B)  The economy experienced a technological advance in the production of books. 
C)  More capital became available in the economy. 
D)  More labor became available in the economy.

Question 5

When two variables have a negative correlation,

Accepted Answer

A)  when the x-variable decreases, the y-variable decreases. 
B)  when the x-variable decreases, the y-variable increases. 
C)  when the x-variable increases, the y-variable increases. 
D)  More than one of the above is correct. 
A)  when the x-variable decreases, the y-variable decreases. 
B)  when the x-variable decreases, the y-variable increases. 
C)  when the x-variable increases, the y-variable increases. 
D)  More than one of the above is correct.

Question 6

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Accepted Answer

A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists. 
A)  This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. 
B)  This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. 
C)  This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. 
D)  This would never happen. Policymakers always follow the advice of economists.

Question 7

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A)  less than 0. 
B)  between zero and 1. 
C)  between one and infinity. 
D)  undefined. 
A)  less than 0. 
B)  between zero and 1. 
C)  between one and infinity. 
D)  undefined.

Question 8

Figure 2-23  
-Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 9

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Federal Reserve. 
B)  Department of Justice. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 10

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 11

Figure 2-23  
-Refer to Figure 2-23. The opportunity cost of moving from point B to point A is zero.

Accepted Answer

A) True 
 B)False

Question 12

In the circular-flow diagram,

Accepted Answer

A)  factors of production flow from government to firms. 
B)  goods and services flow from households to firms. 
C)  income paid to the factors of production flows from firms to households. 
D)  spending on goods and services flows from firms to households. 
A)  factors of production flow from government to firms. 
B)  goods and services flow from households to firms. 
C)  income paid to the factors of production flows from firms to households. 
D)  spending on goods and services flows from firms to households.

Question 13

Figure 2-23  
-Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Economists at which administrative department help formulate spending plans and regulatory policies?

Accepted Answer

Office of

Question 16

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Accepted Answer

Council of

Question 17

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 1050 units of food and 47 machines. Which of the following statements is correct?

Accepted Answer

A)  Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 47. 
B)  Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry. 
C)  In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies. 
D)  The technological advance reduced the amount of resources needed to produce 47 machines, so these resources could be used to produce more food. 
A)  Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 47. 
B)  Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry. 
C)  In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies. 
D)  The technological advance reduced the amount of resources needed to produce 47 machines, so these resources could be used to produce more food.

Question 20

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

Accepted Answer

The answer of Which type of statement - positive or...

Exam 2: Thinking Like an Economist

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

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Figure 2-11 -Refer to Figure 2-11. Which of the following events would explain the shift of the production possibilities frontier from A to B?

When two variables have a negative correlation,

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Figure 2-23 -Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

The president of the United States receives tax policy advice from economists in the

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

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point B to point A is zero.

In the circular-flow diagram,

Figure 2-23 -Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

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

Economists at which administrative department help formulate spending plans and regulatory policies?

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

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

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

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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