Question 1

Which of the following is not correct?

Accepted Answer

A)  When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words. 
B)  Graphs are one way of expressing the relationships among variables. 
C)  When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects. 
D)  When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns. 
A)  When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words. 
B)  Graphs are one way of expressing the relationships among variables. 
C)  When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects. 
D)  When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns.

Question 2

Figure 2-10
Panel (a) Panel (b)    
-Refer to Figure 2-10, Panel (a) and Panel (b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a) to Panel (b)?

Accepted Answer

A)  The tradeoff between the production of tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production. 
A)  The tradeoff between the production of tractors and sofas changes. 
B)  Production of 2 tractors and 10 sofas becomes efficient. 
C)  Production of 6 tractors and 14 sofas becomes possible. 
D)  The opportunity cost of a sofa is higher at all levels of sofa production.

Question 3

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

Accepted Answer

A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient. 
A)  impossible and inefficient. 
B)  impossible but efficient. 
C)  possible but inefficient. 
D)  possible and efficient.

Question 4

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A)  income 
B)  price 
C)  preferences 
D)  the availability of alternative goods 
A)  income 
B)  price 
C)  preferences 
D)  the availability of alternative goods

Question 5

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. The opportunity cost of moving from point U to point R is

Accepted Answer

A)  60 bushels of apples. 
B)  80 bushels of apples. 
C)  80 sweaters. 
D)  160 sweaters. 
A)  60 bushels of apples. 
B)  80 bushels of apples. 
C)  80 sweaters. 
D)  160 sweaters.

Question 6

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 7

In the ordered pair (3, 6), 3 is the

Accepted Answer

A)  x-coordinate. 
B)  y-coordinate. 
C)  origin. 
D)  slope. 
A)  x-coordinate. 
B)  y-coordinate. 
C)  origin. 
D)  slope.

Question 8

In the markets for goods and services in the circular flow diagram, households act as

Accepted Answer

The answer of In the markets for goods and services...

Question 9

The x-coordinate is the

Accepted Answer

A)  first number of an ordered pair and represents the point's horizontal location. 
B)  second number of an ordered pair and represents the point's horizontal location. 
C)  first number of an ordered pair and represents the point's vertical location. 
D)  second number of an ordered pair and represents the point's vertical location. 
A)  first number of an ordered pair and represents the point's horizontal location. 
B)  second number of an ordered pair and represents the point's horizontal location. 
C)  first number of an ordered pair and represents the point's vertical location. 
D)  second number of an ordered pair and represents the point's vertical location.

Question 10

Table 2-6  
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Accepted Answer

The answer of Table 2-6  
-Refer to Table 2-6....

Question 11

Figure 2-9
Panel (a) Panel (b)    
-Refer to Figure 2-9, Panel (a). The movement from point M to point K could be caused by

Accepted Answer

A)  an advance in production technology. 
B)  an improvement in efficiency. 
C)  economic growth. 
D)  unemployment. 
A)  an advance in production technology. 
B)  an improvement in efficiency. 
C)  economic growth. 
D)  unemployment.

Question 12

When two variables have a negative correlation and the x-variable decreases,

Accepted Answer

A)  the y-variable increases. 
B)  the y-variable decreases. 
C)  the y-variable stays the same. 
D)  the x-variable can never be positive. 
A)  the y-variable increases. 
B)  the y-variable decreases. 
C)  the y-variable stays the same. 
D)  the x-variable can never be positive.

Question 13

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership. 
A)  the effects of rent control on housing in New York City. 
B)  the effects of foreign competition on the US auto industry. 
C)  the effects of borrowing by the federal government. 
D)  the effects of raising the gasoline tax on transit ridership.

Question 14

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)  would likely be made by an economist acting as a policy advisor. 
B)  would require values and data to be evaluated. 
C)  would require data but not values to be evaluated. 
D)  could not be evaluated by economists acting as scientists. 
A)  would likely be made by an economist acting as a policy advisor. 
B)  would require values and data to be evaluated. 
C)  would require data but not values to be evaluated. 
D)  could not be evaluated by economists acting as scientists.

Question 15

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Accepted Answer

A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit 
A)  goods and services 
B)  land, labor, and capital 
C)  dollars spent on goods and services 
D)  wages, rent, and profit

Question 16

Economists speaking like policy advisers make

Accepted Answer

A)  positive statements. 
B)  descriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be. 
A)  positive statements. 
B)  descriptive statements. 
C)  claims about how the world is. 
D)  claims about how the world should be.

Question 17

For economists, statements about the world are of two types:

Accepted Answer

A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements. 
A)  assumptions and theories. 
B)  true statements and false statements. 
C)  specific statements and general statements. 
D)  positive statements and normative statements.

Question 18

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 19

A statement describing how the world should be

Accepted Answer

A)  is a normative statement. 
B)  is a positive statement. 
C)  would only be made by an economist speaking as a scientist. 
D)  would only be made by an economist employed by the government. 
A)  is a normative statement. 
B)  is a positive statement. 
C)  would only be made by an economist speaking as a scientist. 
D)  would only be made by an economist employed by the government.

Question 20

Almost all economists agree that local and state governments should

Accepted Answer

A)  eliminate subsidies to professional sports franchises. 
B)  increase subsidies to professional sports franchises. 
C)  copy economic policy from Washington, D.C. 
D)  prevent companies from outsourcing work. 
A)  eliminate subsidies to professional sports franchises. 
B)  increase subsidies to professional sports franchises. 
C)  copy economic policy from Washington, D.C. 
D)  prevent companies from outsourcing work.

Exam 2: Thinking Like an Economist

Which of the following is not correct?

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) and Panel (b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a) to Panel (b)?

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

Which of the following is not held constant when looking at an individual's demand curve?

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. The opportunity cost of moving from point U to point R is

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

In the ordered pair (3, 6), 3 is the

In the markets for goods and services in the circular flow diagram, households act as

The x-coordinate is the

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The movement from point M to point K could be caused by

When two variables have a negative correlation and the x-variable decreases,

A macroeconomist - as opposed to a microeconomist - would study

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Economists speaking like policy advisers make

For economists, statements about the world are of two types:

Assumptions can simplify the complex world and make it easier to understand.

A statement describing how the world should be

Almost all economists agree that local and state governments should

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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