Question 1

Economists make use of assumptions, some of which are unrealistic, for the purpose of

Accepted Answer

A)  teaching economics to people who have never before studied economics. 
B)  advancing their political agendas. 
C)  developing models when the scientific method cannot be used. 
D)  focusing their thinking. 
A)  teaching economics to people who have never before studied economics. 
B)  advancing their political agendas. 
C)  developing models when the scientific method cannot be used. 
D)  focusing their thinking.

Question 2

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-6  
-Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Accepted Answer

A)  120 pillows and 320 blankets. 
B)  180 pillows and 180 blankets. 
C)  240 pillows and 200 blankets. 
D)  We would have to know the details of this economy's technology in order to determine this. 
A)  120 pillows and 320 blankets. 
B)  180 pillows and 180 blankets. 
C)  240 pillows and 200 blankets. 
D)  We would have to know the details of this economy's technology in order to determine this.

Question 4

Figure 2-3  
-Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

Accepted Answer

A)  revenue 
B)  goods and services sold 
C)  factors of production 
D)  labor, land, and capital 
A)  revenue 
B)  goods and services sold 
C)  factors of production 
D)  labor, land, and capital

Question 5

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)  labor 
B)  land 
C)  capital 
D)  money 
A)  labor 
B)  land 
C)  capital 
D)  money

Question 6

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 7

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Accepted Answer

A)  the Federal Reserve 
B)  the Congressional Budget Office 
C)  the Department of the Treasury 
D)  the Department of Commerce 
A)  the Federal Reserve 
B)  the Congressional Budget Office 
C)  the Department of the Treasury 
D)  the Department of Commerce

Question 8

"The US should not restrict employers from outsourcing work to foreign countries" is a normative statement.

Accepted Answer

A) True 
 B)False

Question 9

The first number in any ordered pair is

Accepted Answer

A)  the x-coordinate. 
B)  the y-coordinate. 
C)  the vertical location of the point. 
D)  the slope. 
A)  the x-coordinate. 
B)  the y-coordinate. 
C)  the vertical location of the point. 
D)  the slope.

Question 10

Another term for factors of production is

Accepted Answer

A)  inputs. 
B)  output. 
C)  goods. 
D)  services. 
A)  inputs. 
B)  output. 
C)  goods. 
D)  services.

Question 11

Factors of production are

Accepted Answer

A)  used to produce goods and services. 
B)  also called output. 
C)  abundant in most economies. 
D)  assumed to be owned by firms in the circular-flow diagram. 
A)  used to produce goods and services. 
B)  also called output. 
C)  abundant in most economies. 
D)  assumed to be owned by firms in the circular-flow diagram.

Question 12

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 13

Table 2-5  
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Accepted Answer

A)  bowed outward indicating increasing opportunity costs. 
B)  bowed outward indicating decreasing opportunity costs. 
C)  a straight line indicating constant opportunity costs. 
D)  bowed inward indicating increasing opportunity costs. 
A)  bowed outward indicating increasing opportunity costs. 
B)  bowed outward indicating decreasing opportunity costs. 
C)  a straight line indicating constant opportunity costs. 
D)  bowed inward indicating increasing opportunity costs.

Question 14

Which of the following is an example of a capital input?

Accepted Answer

A)  a computer 
B)  a share of stock 
C)  an hour of a worker's time 
D)  $50,000 
A)  a computer 
B)  a share of stock 
C)  an hour of a worker's time 
D)  $50,000

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 one car is

Accepted Answer

The answer of Figure 2-15  
-Refer to Figure 2-15....

Question 16

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Accepted Answer

A) True 
 B)False

Question 17

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Accepted Answer

A) True 
 B)False

Question 18

As a substitute for laboratory experiments, economists use evidence available through history's

Accepted Answer

natural ex

Question 19

In the simple circular-flow diagram, the participants in the economy are

Accepted Answer

A)  firms and government. 
B)  households and firms. 
C)  households and government. 
D)  households, firms, and government. 
A)  firms and government. 
B)  households and firms. 
C)  households and government. 
D)  households, firms, and government.

Question 20

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Economists make use of assumptions, some of which are unrealistic, for the purpose of

When a variable that is named on an axis of a graph changes, the curve shifts.

Figure 2-6 -Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Figure 2-3 -Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

In the circular-flow diagram, which of the following is not a factor of production?

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

"The US should not restrict employers from outsourcing work to foreign countries" is a normative statement.

The first number in any ordered pair is

Another term for factors of production is

Factors of production are

A pie chart is a way to display information regarding two variables.

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Which of the following is an example of a capital input?

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 one car is

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

As a substitute for laboratory experiments, economists use evidence available through history's

In the simple circular-flow diagram, the participants in the economy are

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

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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