Question 1

Figure 2-23  
-Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Accepted Answer

A) True 
 B)False

Question 2

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Accepted Answer

A) True 
 B)False

Question 3

Positive statements can be evaluated using data alone, but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 4

The use of the coordinate system allows

Accepted Answer

A)  for the display of the flows of dollars, goods and services, and factors of production in an economic system. 
B)  for the display of how labor and other resources are organized in the production process. 
C)  for the display of two variables on a single graph. 
D)  for the creation of pie charts and bar graphs. 
A)  for the display of the flows of dollars, goods and services, and factors of production in an economic system. 
B)  for the display of how labor and other resources are organized in the production process. 
C)  for the display of two variables on a single graph. 
D)  for the creation of pie charts and bar graphs.

Question 5

Figure 2-19
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service  
-Refer to Figure 2-19. Which of the following conclusions should not be drawn from observing this graph?

Accepted Answer

A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers. 
A)  There is a positive correlation between the frequency of service and the number of passengers. 
B)  When there are 5 stops per hour, there are approximately 200 passengers. 
C)  More stops per hour is associated with more passengers per hour. 
D)  No other factors besides the frequency of service affect the number of passengers.

Question 6

Figure 2-23  
-Refer to Figure 2-23. The opportunity cost of moving from point A to point D is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-7  
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources. 
A)  it still would not be producing efficiently. 
B)  there would be no gain in either engines or tvs. 
C)  it would be producing more engines and more tvs than at point P. 
D)  It is not possible for this economy to move from point P to point N without additional resources.

Question 8

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A)  There is a great deal of agreement among economists on virtually every economic issue. 
B)  There is a great deal of agreement among economists on many important economic issues. 
C)  All disagreements among economists are attributable to differences in their values. 
D)  All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories. 
A)  There is a great deal of agreement among economists on virtually every economic issue. 
B)  There is a great deal of agreement among economists on many important economic issues. 
C)  All disagreements among economists are attributable to differences in their values. 
D)  All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.

Question 10

Figure 2-1  
-Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Accepted Answer

A)  A only 
B)  A and B 
C)  C only 
D)  C and D 
A)  A only 
B)  A and B 
C)  C only 
D)  C and D

Question 11

Figure 2-13  
-Refer to Figure 2-13. One difference between points F and G is that

Accepted Answer

A)  Point G is unattainable with current resources, but point F is attainable. 
B)  All resources are fully employed at point F but there is unemployment at point G. 
C)  More output can be produced at point F but no additional output can be produced at point G. 
D)  This economy produces more cookies at point G than at point F. 
A)  Point G is unattainable with current resources, but point F is attainable. 
B)  All resources are fully employed at point F but there is unemployment at point G. 
C)  More output can be produced at point F but no additional output can be produced at point G. 
D)  This economy produces more cookies at point G than at point F.

Question 12

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

Accepted Answer

A)  wages 
B)  income 
C)  capital 
D)  rent 
A)  wages 
B)  income 
C)  capital 
D)  rent

Question 13

Figure 2-23  
-Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-6  
-Refer to Figure 2-6. A movement from point H to point K could be caused by

Accepted Answer

A)  unemployment. 
B)  a decrease in society's preference for pillows. 
C)  fewer resources available for production of pillows. 
D)  All of the above are correct. 
A)  unemployment. 
B)  a decrease in society's preference for pillows. 
C)  fewer resources available for production of pillows. 
D)  All of the above are correct.

Question 15

The design of tax policy is one of the responsibilities of economists who work at the

Accepted Answer

A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office. 
A)  Council of Economic Advisers. 
B)  Federal Reserve. 
C)  Department of the Treasury. 
D)  Congressional Budget Office.

Question 16

When economists make positive statements, they are

Accepted Answer

A)  speaking as scientists. 
B)  speaking as policy advisers. 
C)  making claims about how the world should be. 
D)  revealing that they are very conservative in their views of how the world works. 
A)  speaking as scientists. 
B)  speaking as policy advisers. 
C)  making claims about how the world should be. 
D)  revealing that they are very conservative in their views of how the world works.

Question 17

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 economy devotes all of its available resources to producing apples, then it will produce

Accepted Answer

A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters. 
A)  0 bushels of apples and 200 sweaters. 
B)  80 bushels of apples and 160 sweaters 
C)  180 bushels of apples and 200 sweaters. 
D)  180 bushels of apples and 0 sweaters.

Question 18

When two variables have a positive correlation,

Accepted Answer

A)  when the x-variable increases, 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 increases, 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 19

Figure 2-10
Panel (a) Panel (b)    
-Refer to Figure 2-10, Panel (a) and Panel (b). A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Accepted Answer

A)  unemployment. 
B)  an improvement in sofa production technology. 
C)  an improvement in tractor production technology. 
D)  an improvement in both sofa and tractor production technology. 
A)  unemployment. 
B)  an improvement in sofa production technology. 
C)  an improvement in tractor production technology. 
D)  an improvement in both sofa and tractor production technology.

Question 20

Economic models are most often composed of diagrams and equations.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Positive statements can be evaluated using data alone, but normative statements cannot.

The use of the coordinate system allows

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point A to point D is 10 dishwashers.

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

Which of the following statements is correct about the extent of disagreement among economists?

Figure 2-1 -Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Figure 2-13 -Refer to Figure 2-13. One difference between points F and G is that

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

Figure 2-23 -Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Figure 2-6 -Refer to Figure 2-6. A movement from point H to point K could be caused by

The design of tax policy is one of the responsibilities of economists who work at the

When economists make positive statements, they are

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 economy devotes all of its available resources to producing apples, then it will produce

When two variables have a positive correlation,

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) and Panel (b). A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Economic models are most often composed of diagrams and equations.

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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