Question 1

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods. 
A)  is useless, since the real world has many countries trading many goods. 
B)  can be useful only in situations involving two countries and two goods. 
C)  can be useful in the classroom, but is useless in the real world. 
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods.

Question 2

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)  households and firms are both buyers. 
B)  households and firms are both sellers. 
C)  households are buyers and firms are sellers. 
D)  households are sellers and firms are buyers. 
A)  households and firms are both buyers. 
B)  households and firms are both sellers. 
C)  households are buyers and firms are sellers. 
D)  households are sellers and firms are buyers.

Question 3

Who would be more likely to study the effects of rent control on housing in New York City, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 4

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 5

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 6

Table 2-4
Production Possibilities for Picnicland  
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Accepted Answer

A)  150 hotdogs 
B)  225 hotdogs 
C)  300 hotdogs 
D)  450 hotdogs 
A)  150 hotdogs 
B)  225 hotdogs 
C)  300 hotdogs 
D)  450 hotdogs

Question 7

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Accepted Answer

A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate 
A)  the effects of rent control on the availability of housing in New York City 
B)  the economic impact of tornadoes on cities and towns in Oklahoma 
C)  how tariffs on shoes affects the shoe industry 
D)  the effect on the economy of changes in the nation's unemployment rate

Question 8

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Accepted Answer

A) True 
 B)False

Question 9

Economists at which administrative department help design tax policy?

Accepted Answer

Department

Question 10

Figure 2-6  
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Accepted Answer

A)  zero. 
B)  40 blankets. 
C)  120 pillows. 
D)  360 blankets. 
A)  zero. 
B)  40 blankets. 
C)  120 pillows. 
D)  360 blankets.

Question 11

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

The answer of Is the following a positive or normative...

Question 12

Which of the following statements is (are) correct?

Accepted Answer

A)  Relative to some other scientists, economists find it more difficult to conduct experiments. 
B)  Theory and observation are important in economics as well as in other sciences. 
C)  To obtain data, economists often rely upon the natural experiments offered by history. 
D)  All of the above are correct. 
A)  Relative to some other scientists, economists find it more difficult to conduct experiments. 
B)  Theory and observation are important in economics as well as in other sciences. 
C)  To obtain data, economists often rely upon the natural experiments offered by history. 
D)  All of the above are correct.

Question 13

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 14

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Accepted Answer

A) True 
 B)False

Question 15

The slope of a steep upward-sloping line will be a

Accepted Answer

A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number. 
A)  small positive number. 
B)  large positive number. 
C)  small negative number. 
D)  large negative number.

Question 16

In the circular-flow diagram, another name for goods and services produced by firms is

Accepted Answer

A)  factors of production. 
B)  output. 
C)  inputs. 
D)  resources. 
A)  factors of production. 
B)  output. 
C)  inputs. 
D)  resources.

Question 17

Figure 2-6  
-Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

Accepted Answer

A)  0 blankets and 360 pillows. 
B)  200 blankets and 240 pillows. 
C)  320 blankets and 120 pillows. 
D)  360 blankets and 0 pillows. 
A)  0 blankets and 360 pillows. 
B)  200 blankets and 240 pillows. 
C)  320 blankets and 120 pillows. 
D)  360 blankets and 0 pillows.

Question 18

Figure 2-7  
-Refer to Figure 2-7. This economy has the ability to produce at which point(s)?

Accepted Answer

A)  N, O, P 
B)  L, M 
C)  L, M, N, O, P 
D)  L, M, Q 
A)  N, O, P 
B)  L, M 
C)  L, M, N, O, P 
D)  L, M, Q

Question 19

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. Which point(s) on the graph is(are) unattainable given current resources and technology?

Accepted Answer

The answer of Figure 2-14   Consider the production...

Question 20

The circular-flow diagram is a

Accepted Answer

A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works. 
A)  visual model of the economy. 
B)  visual model of the relationships among money, prices, and businesses. 
C)  model that shows the effects of government on the economy. 
D)  mathematical model of how the economy works.

Exam 2: Thinking Like an Economist

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

In the markets for goods and services in the circular-flow diagram,

Who would be more likely to study the effects of rent control on housing in New York City, a macroeconomist or a microeconomist?

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Economists at which administrative department help design tax policy?

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Which of the following statements is (are) correct?

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

The slope of a steep upward-sloping line will be a

In the circular-flow diagram, another name for goods and services produced by firms is

Figure 2-6 -Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s)?

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. Which point(s) on the graph is(are) unattainable given current resources and technology?

The circular-flow diagram is a

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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