Question 1

Figure 2-13 
-Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Accepted Answer

A)  Point G is currently unattainable.
B)  Point G is efficient.
C)  At point G, more cakes are produced than cookies.
D)  There is unemployment at point G.E) A) and B)
F) All of the above

Question 2

In the circular-flow diagram,

Accepted Answer

A)  profit flows from households to firms.
B)  labor flows from households to firms.
C)  services flow from households to firms.
D)  All of the above are correct.E) None of the above
F) A) and D)

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

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Accepted Answer

A)  The United States should not restrict employers from outsourcing work to foreign countries.
B)  The United States should withdraw from the North American Free Trade Agreement (NAFT
A)  .
C)  The United States should eliminate agricultural subsidies.
D)  Local and state governments should eliminate subsidies to professional sports franchises.E) B) and D)
F) None of the above

Question 5

The slope of a line passing through the points (15, 3)  and (10, 6)  is

Accepted Answer

A)  -3/5.
B)  3/5.
C)  -5/3.
D)  5/3.E) A) and D)
F) A) and C)

Question 6

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 society moves from point U to point V,

Accepted Answer

A)  it gives up 40 bushels of apples to get 80 sweaters.
B)  it gives up 140 bushels of apples to get 80 sweaters.
C)  it gives up 80 sweaters to get 140 bushels of apples.
D)  it gives up 80 sweaters to get 40 bushels of apples.E) C) and D)
F) All of the above

Question 7

Using the outline below, draw a circular-flow diagram representing the interactions between households and firms in a simple economy. Explain briefly the various parts of the diagram.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> This diagram should duplicate the essen...

Question 8

Table 2-3
Production Possibilities for Footville 
-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)  400 socks
B)  300 socks
C)  200 socks
D)  100 socksE) A) and B)
F) All of the above

Question 9

Macroeconomics is the study of

Accepted Answer

A)  individual decision makers.
B)  international trade.
C)  economy-wide phenomena.
D)  markets for large products.E) A) and C)
F) B) and D)

Question 10

Figure 2-2 
-Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

Accepted Answer

A)  households are represented by Box A.
B)  firms are represented by Box C.
C)  firms are represented by Box A.
D)  firms are sellers in Box B.E) A) and B)
F) B) and D)

Question 11

Which of the following is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)  The federal government should decrease coverage of unemployment benefits to stimulate the economy out of the recession.
B)  Congress should agree on lower government spending for the next fiscal year.
C)  The Federal Reserve Bank should increase interest rates in response to the higher-than-expected inflation in the economy.
D)  The unemployment rate last year was lower than any other year in the last century.E) A) and B)
F) A) and C)

Question 12

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)  a landowner leases land to a farmer
B)  a farmer hires a teenager to help with harvest
C)  a construction company rents trucks for its business
D)  a woman buys corn for dinnerE) B) and C)
F) A) and D)

Question 13

Evaluating normative statements involves values as well as facts.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-8 
-Refer to Figure 2-8. Point K represents an outcome in which

Accepted Answer

A)  production is inefficient.
B)  some of the economy's resources are unemployed.
C)  the economy is using all of its resources to produce hammers.
D)  the economy is using all of its nails to produce hammers.E) None of the above
F) A) and D)

Question 15

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 16

Economists speaking like scientists make

Accepted Answer

A)  positive statements.
B)  prescriptive statements.
C)  claims about how the world should be.
D)  More than one of the above is correct.E) C) and D)
F) A) and B)

Question 17

"Minimum wage laws result in unemployment" is a normative statement, while "the minimum wage should be higher" is a positive statement.

Accepted Answer

A) True 
 B)False

Question 18

Which types of models are built with assumptions?

Accepted Answer

A)  economic models, but not models in other disciplines such as physics and biology
B)  economic models as well as models in other disciplines such as physics and biology
C)  models that are built for teaching purposes but not for research purposes
D)  bad modelsE) A) and C)
F) B) and C)

Question 19

In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?

Accepted Answer

The answer of In the circular flow diagram, who owns...

Question 20

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Accepted Answer

A)  Dylan receives a salary for his work as a financial analyst for an investment firm.
B)  Kristin buys two business suits to wear to her job as a Chief Information Officer.
C)  Jim receives clean water in his home in exchange for paying his water bill.
D)  Caroline owns a nail salon and receives payments from her clients for her services.E) C) and D)
F) A) and D)

Exam 2: Thinking Like an Economist

Figure 2-8 -Refer to Figure 2-8. Point K represents an outcome in which

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The slope of a line passing through the points (15, 3) and (10, 6) is

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Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

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"Minimum wage laws result in unemployment" is a normative statement, while "the minimum wage should be higher" is a positive statement.

Correct AnswerverifiedShow Answer

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

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Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

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Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

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Using the outline below, draw a circular-flow diagram representing the interactions between households and firms in a simple economy. Explain briefly the various parts of the diagram.

Correct Answerverified This diagram should duplicate the essen...View AnswerShow Answer

Macroeconomics is the study of

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In the circular-flow diagram,

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Economists speaking like scientists make

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Which of the following is an example of a positive, as opposed to normative, statement?

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Figure 2-13 -Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

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

Correct AnswerverifiedShow Answer

In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?

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Which types of models are built with assumptions?

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Evaluating normative statements involves values as well as facts.

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A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

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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 society moves from point U to point V,

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Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

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This diagram should duplicate the essen...
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