Question 1

In the circular-flow diagram, in the markets for

Accepted Answer

A)  goods and services, households and firms are both sellers. 
B)  goods and services, households are buyers and firms are sellers. 
C)  the factors of production, households are buyers and firms are sellers. 
D)  the factors of production, households and firms are both buyers. 
A)  goods and services, households and firms are both sellers. 
B)  goods and services, households are buyers and firms are sellers. 
C)  the factors of production, households are buyers and firms are sellers. 
D)  the factors of production, households and firms are both buyers.

Question 2

Economists make assumptions to

Accepted Answer

A)  mimic the methodologies employed by other scientists. 
B)  minimize the number of experiments that yield no useful data. 
C)  minimize the likelihood that some aspect of the problem at hand is being overlooked. 
D)  focus their thinking on the essence of the problem at hand. 
A)  mimic the methodologies employed by other scientists. 
B)  minimize the number of experiments that yield no useful data. 
C)  minimize the likelihood that some aspect of the problem at hand is being overlooked. 
D)  focus their thinking on the essence of the problem at hand.

Question 3

Figure 2-4  
-Refer to Figure 2-4. Efficient production is represented by which point(s)?

Accepted Answer

A)  Q, R, U 
B)  R, T, U 
C)  R, U 
D)  S, T 
A)  Q, R, U 
B)  R, T, U 
C)  R, U 
D)  S, T

Question 4

Economists work both inside and outside the administrative branch of the U.S. government.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The institution that sets the nation's monetary policy is called the

Accepted Answer

The answer of The institution that sets the nation's monetary...

Question 7

Figure 2-22  
-Refer to Figure 2-22. Given that price is measured on the vertical axis, quantity is measured on the horizontal axis, and that the curves are downward-sloping, what type of curves are depicted here?

Accepted Answer

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

Question 8

Differences in scientific judgement between economists are similar to all of the following except

Accepted Answer

A)  astronomers debating whether the sun or earth was at the center of the solar system. 
B)  meteorologists debating the existence of global warming. 
C)  two politicians arguing about the fairness of the tax code. 
D)  explorers debating whether or not the earth was flat before the time of Christopher Columbus. 
A)  astronomers debating whether the sun or earth was at the center of the solar system. 
B)  meteorologists debating the existence of global warming. 
C)  two politicians arguing about the fairness of the tax code. 
D)  explorers debating whether or not the earth was flat before the time of Christopher Columbus.

Question 9

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense. 
A)  at which very few excel. 
B)  but not as easy as philosophy or the pure sciences. 
C)  which very few can enjoy. 
D)  which deals primarily with common sense.

Question 10

Figure 2-23  
-Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-5  
-Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

Accepted Answer

A)  it is not using all of its resources. 
B)  it is not using the most efficient production process. 
C)  it does not have the resources and technology to produce that level of output. 
D)  All of the above are correct. 
A)  it is not using all of its resources. 
B)  it is not using the most efficient production process. 
C)  it does not have the resources and technology to produce that level of output. 
D)  All of the above are correct.

Question 12

Which of the following is not correct?

Accepted Answer

A)  Evaluating statements about how the world should be involves values as well as facts. 
B)  Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C)  Normative statements can be judged using data alone. 
D)  Deciding what is good or bad policy is not just a matter of science. 
A)  Evaluating statements about how the world should be involves values as well as facts. 
B)  Positive statements can, in principle, be confirmed or refuted by examining evidence. 
C)  Normative statements can be judged using data alone. 
D)  Deciding what is good or bad policy is not just a matter of science.

Question 13

Economists, like mathematicians, physicists, and biologists,

Accepted Answer

A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct. 
A)  make use of the scientific method. 
B)  try to address their subject with a scientist's objectivity. 
C)  devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. 
D)  All of the above are correct.

Question 14

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

Accepted Answer

A)  shift to the right. 
B)  shift to the left. 
C)  not shift; instead, Martina will move along her demand curve downward and to the right. 
D)  not shift; instead, Martina will move along her demand curve upward and to the left. 
A)  shift to the right. 
B)  shift to the left. 
C)  not shift; instead, Martina will move along her demand curve downward and to the right. 
D)  not shift; instead, Martina will move along her demand curve upward and to the left.

Question 15

The x-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 16

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 17

Figure 2-23  
-Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Figure 2-16  
-Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

Accepted Answer

A)  a positive correlation. 
B)  a negative correlation. 
C)  a random correlation. 
D)  no correlation. 
A)  a positive correlation. 
B)  a negative correlation. 
C)  a random correlation. 
D)  no correlation.

Question 20

Economic models

Accepted Answer

A)  are people who act out the behavior of firms and households so that economists can study this behavior. 
B)  are usually detailed replications of reality. 
C)  incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality. 
D)  are useful to researchers but not to teachers because economic models omit many details of the real-world economy. 
A)  are people who act out the behavior of firms and households so that economists can study this behavior. 
B)  are usually detailed replications of reality. 
C)  incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality. 
D)  are useful to researchers but not to teachers because economic models omit many details of the real-world economy.

Exam 2: Thinking Like an Economist

In the circular-flow diagram, in the markets for

Economists make assumptions to

Figure 2-4 -Refer to Figure 2-4. Efficient production is represented by which point(s)?

Economists work both inside and outside the administrative branch of the U.S. government.

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

The institution that sets the nation's monetary policy is called the

Figure 2-22 -Refer to Figure 2-22. Given that price is measured on the vertical axis, quantity is measured on the horizontal axis, and that the curves are downward-sloping, what type of curves are depicted here?

Differences in scientific judgement between economists are similar to all of the following except

John Maynard Keynes referred to economics as an easy subject,

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Figure 2-5 -Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

Which of the following is not correct?

Economists, like mathematicians, physicists, and biologists,

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

The x-coordinate of an ordered pair specifies the

The circular-flow diagram

Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

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

Figure 2-16 -Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

Economic models

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

Filters