Question 1

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)   the respondents were almost equally divided on the propositions.
B)   the respondents favored the propositions by a slight margin.
C)   the respondents disagreed with the propositions by a slight margin.
D)   there was overwhelming endorsement of the propositions among the respondents.E) B) and C)
F) B) and D)

Question 2

Figure 2-2 
-Refer to Figure 2-2.If households are buyers in the markets represented by Box C of this circular-flow diagram,then

Accepted Answer

A)   Box C must represent the markets for the factors of production.
B)   Box D must represent the markets for goods and services.
C)   firms are sellers in the markets represented by Box C.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 3

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-2 
-Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

Accepted Answer

A)   households and government.
B)   firms and government.
C)   the markets for goods and services and the markets for financial assets.
D)   the markets for goods and services and the markets for factors of production.E) All of the above
F) A) and D)

Question 5

Figure 2-14 
-Refer to Figure 2-14.Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to Figure 2-3.What is the slope of the line?

Accepted Answer

The answer of 
-Refer to Figure 2-3.What is the slope...

Question 7

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-14 
-Refer to Figure 2-14.The movement from point B to point C could have been caused by

Accepted Answer

A)   inflation.
B)   a change in income.
C)   a change in the price of grapes.
D)   a change in the cost of producing grapes.E) All of the above
F) A) and D)

Question 9

A circular-flow model and production possibilities frontier are similar in that

Accepted Answer

A)   neither allows economic analysis to occur.
B)   neither can be represented visually on a graph.
C)   both make use of assumptions.
D)   both make use of complex equations to arrive at solutions.E) All of the above
F) B) and D)

Question 10

The two loops in the circular-flow diagram represent

Accepted Answer

A)   the flow of goods and the flow of services.
B)   the flow of dollars and the flow of financial assets.
C)   the flow of inputs into production processes and the flow of outputs from production processes.
D)   the flows of inputs and outputs and the flow of dollars.E) All of the above
F) C) and D)

Question 11

Suppose price is measured along the vertical axis on a graph.When price changes,there will be a

Accepted Answer

A)   rotation of the curve.
B)   shift of the curve.
C)   movement along the curve.
D)   change in the slope of the curve.E) A) and B)
F) B) and C)

Question 12

Figure 2-7 
-Refer to Figure 2-7.Which point on the graph best represents the fact that,because resources are scarce,not every conceivable outcome is feasible?

Accepted Answer

A)   point J
B)   point K
C)   point L
D)   point ME) A) and D)
F) B) and C)

Question 13

Economists may disagree about the validity of alternative positive theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 14

When two variables move in the same direction,the curve relating them is downward sloping,and we say the variables are negatively related.

Accepted Answer

A) True 
 B)False

Question 15

The slope of a line that passes through the points (10,15) and (20,7) is

Accepted Answer

A)   -5/4.
B)   -4/5.
C)   4/5.
D)   5/4.E) A) and D)
F) B) and C)

Question 16

In the circular-flow diagram,which of the following items does not flow from firms to households?

Accepted Answer

A)   goods
B)   services
C)   capital
D)   profitE) A) and B)
F) A) and C)

Question 17

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.E) None of the above
F) B) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies,probably because

Accepted Answer

A)   economists have not yet convinced the general public that the policies are undesirable.
B)   economists engage in positive analysis,not normative analysis.
C)   economists have values that are different from the values of most non-economists.
D)   economists' theories are not easily confirmed or refuted in laboratory analysis.E) A) and B)
F) A) and C)

Question 20

A macroeconomist - as opposed to a microeconomist - might study

Accepted Answer

A)   the effect of agricultural price support programs on the cotton industry
B)   the effect on U.S.steel producers of an import quota imposed on foreign steel
C)   the effect of an increasing inflation rate on national living standards
D)   the effect of an increase in the price of imported coffee beans on the U.S.coffee industryE) B) and D)
F) A) and B)

Exam 2: Thinking Like an Economist

Figure 2-2 -Refer to Figure 2-2.If households are buyers in the markets represented by Box C of this circular-flow diagram,then

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In the circular-flow diagram,which of the following items does not flow from firms to households?

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

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Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies,probably because

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When two variables move in the same direction,the curve relating them is downward sloping,and we say the variables are negatively related.

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The two loops in the circular-flow diagram represent

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The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

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Suppose price is measured along the vertical axis on a graph.When price changes,there will be a

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A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

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Economists believe that production possibilities frontiers rarely have a bowed shape.

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Economists may disagree about the validity of alternative positive theories about how the world works.

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Figure 2-14 -Refer to Figure 2-14.Unemployment could cause this economy to produce at point B.

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-Refer to Figure 2-3.What is the slope of the line?

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Figure 2-7 -Refer to Figure 2-7.Which point on the graph best represents the fact that,because resources are scarce,not every conceivable outcome is feasible?

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A macroeconomist - as opposed to a microeconomist - would study

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A macroeconomist - as opposed to a microeconomist - might study

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Figure 2-2 -Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

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A circular-flow model and production possibilities frontier are similar in that

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The slope of a line that passes through the points (10,15) and (20,7) is

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Figure 2-14 -Refer to Figure 2-14.The movement from point B to point C could have been caused by

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