Question 1

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

Accepted Answer

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

Question 2

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. If this society moves from point U to point V,

Accepted Answer

A)  it gives up 40 bushels of apples to get 80 sweaters. 
B)  it gives up 140 bushels of apples to get 80 sweaters. 
C)  it gives up 80 sweaters to get 140 bushels of apples. 
D)  it gives up 80 sweaters to get 40 bushels of apples. 
A)  it gives up 40 bushels of apples to get 80 sweaters. 
B)  it gives up 140 bushels of apples to get 80 sweaters. 
C)  it gives up 80 sweaters to get 140 bushels of apples. 
D)  it gives up 80 sweaters to get 40 bushels of apples.

Question 3

A production possibilities frontier can shift outward if

Accepted Answer

A)  government increases the amount of money in the economy. 
B)  there is a technological improvement. 
C)  resources are shifted from the production of one good to the production of the other good. 
D)  the economy abandons inefficient production methods in favor of efficient production methods. 
A)  government increases the amount of money in the economy. 
B)  there is a technological improvement. 
C)  resources are shifted from the production of one good to the production of the other good. 
D)  the economy abandons inefficient production methods in favor of efficient production methods.

Question 4

Figure 2-5  
-Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Accepted Answer

A)  The economy has insufficient resources to produce at a more desirable point. 
B)  The economy's available technology prevents it from producing at a more desirable point. 
C)  There is widespread unemployment in the economy. 
D)  Any of the above statements would be a legitimate explanation for this situation. 
A)  The economy has insufficient resources to produce at a more desirable point. 
B)  The economy's available technology prevents it from producing at a more desirable point. 
C)  There is widespread unemployment in the economy. 
D)  Any of the above statements would be a legitimate explanation for this situation.

Question 5

Which of the following is not correct?

Accepted Answer

A)  The slope of a line will be a small positive number for a fairly flat upward-sloping line. 
B)  The slope of a line will be a large positive number for a steep upward-sloping line. 
C)  The slope of a line will be a negative number for a downward-sloping line. 
D)  The slope of a line will be infinite for a horizontal line. 
A)  The slope of a line will be a small positive number for a fairly flat upward-sloping line. 
B)  The slope of a line will be a large positive number for a steep upward-sloping line. 
C)  The slope of a line will be a negative number for a downward-sloping line. 
D)  The slope of a line will be infinite for a horizontal line.

Question 6

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 7

Figure 2-13  
-Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Accepted Answer

A)  Point G is currently unattainable. 
B)  Point G is efficient. 
C)  At point G, more cakes are produced than cookies. 
D)  There is unemployment at point G. 
A)  Point G is currently unattainable. 
B)  Point G is efficient. 
C)  At point G, more cakes are produced than cookies. 
D)  There is unemployment at point G.

Question 8

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

Accepted Answer

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

Question 9

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)  A ceiling on rents reduces the quantity and quality of housing available. 
B)  Fiscal policy has a significant stimulative impact on a less than fully employed economy. 
C)  The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. 
D)  The United States should implement universal health care for its citizens. 
A)  A ceiling on rents reduces the quantity and quality of housing available. 
B)  Fiscal policy has a significant stimulative impact on a less than fully employed economy. 
C)  The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. 
D)  The United States should implement universal health care for its citizens.

Question 10

Because it is difficult for economists to use experiments to generate data, they generally must

Accepted Answer

A)  do without data. 
B)  substitute assumptions for data when data are unavailable. 
C)  rely upon hypothetical data that were previously concocted by other economists. 
D)  use whatever data the world gives them. 
A)  do without data. 
B)  substitute assumptions for data when data are unavailable. 
C)  rely upon hypothetical data that were previously concocted by other economists. 
D)  use whatever data the world gives them.

Question 11

Figure 2-9
Panel (a) Panel (b)    
-Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point M to point L is

Accepted Answer

A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee. 
A)  2 donuts. 
B)  2 donuts and 4 cups of coffee. 
C)  4 donuts. 
D)  4 cups of coffee.

Question 12

What type of statement is a prescriptive statement about how the world ought to be?

Accepted Answer

The answer of What type of statement is a prescriptive...

Question 13

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-22  
-Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Accepted Answer

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

Question 15

Figure 2-15  
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

Accepted Answer

A)  the slope of the production possibilities frontier. 
B)  3/2 sofas. 
C)  2/3 of a sofa. 
D)  Both a and b are correct. 
A)  the slope of the production possibilities frontier. 
B)  3/2 sofas. 
C)  2/3 of a sofa. 
D)  Both a and b are correct.

Question 16

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Accepted Answer

A)  spending. 
B)  revenue. 
C)  income. 
D)  wages, rent, and profit. 
A)  spending. 
B)  revenue. 
C)  income. 
D)  wages, rent, and profit.

Question 17

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Accepted Answer

A) True 
 B)False

Question 18

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

Accepted Answer

A)  800 bushels of corn 
B)  600 bushels of corn 
C)  400 bushels of corn 
D)  400 bushels of wheat 
A)  800 bushels of corn 
B)  600 bushels of corn 
C)  400 bushels of corn 
D)  400 bushels of wheat

Question 19

In conducting their research, economists often substitute historical events and historical episodes for

Accepted Answer

A)  theories and observations. 
B)  laboratory experiments. 
C)  models. 
D)  assumptions. 
A)  theories and observations. 
B)  laboratory experiments. 
C)  models. 
D)  assumptions.

Question 20

Figure 2-10
Panel (a) Panel (b)    
-Refer to Figure 2-10, Panel (a). Production is

Accepted Answer

A)  possible at points V, W, Y, and Z, but efficient only at points V, W, and Z. 
B)  possible at points V, W, Y, and Z, but efficient only at point Y. 
C)  possible at points U, V, W, and Z, but efficient only at points V, W, and Z. 
D)  possible at points U, V, W, and Z, but efficient only at point U. 
A)  possible at points V, W, Y, and Z, but efficient only at points V, W, and Z. 
B)  possible at points V, W, Y, and Z, but efficient only at point Y. 
C)  possible at points U, V, W, and Z, but efficient only at points V, W, and Z. 
D)  possible at points U, V, W, and Z, but efficient only at point U.

Exam 2: Thinking Like an Economist

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

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. If this society moves from point U to point V,

A production possibilities frontier can shift outward if

Figure 2-5 -Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Which of the following is not correct?

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 2-13 -Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

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

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?

Because it is difficult for economists to use experiments to generate data, they generally must

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point M to point L is

What type of statement is a prescriptive statement about how the world ought to be?

Points inside the production possibilities frontier represent feasible levels of production.

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

In conducting their research, economists often substitute historical events and historical episodes for

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). Production 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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