Question 1

The nation's antitrust laws are enforced by economists at the Department of

Accepted Answer

A)   Labor.
B)   Health and Human Services.
C)   Justice.
D)   Treasury.E) None of the above
F) C) and D)

Question 2

Historical episodes allow economists to illustrate and evaluate economic theories of the present.

Accepted Answer

A) True 
 B)False

Question 3

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 4

"If all economists were laid end to end,they would not reach a conclusion." Who made this whimsical observation?

Accepted Answer

A)   Harry Truman
B)   George Bernard Shaw
C)   John Maynard Keynes
D)   Ronald ReaganE) B) and C)
F) B) and D)

Question 5

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 6

When two variables have a negative correlation,

Accepted Answer

A)   they tend to move in opposite directions.
B)   they tend to move in the same direction.
C)   one variable will move while the other remains constant.
D)   the variables' values are never positive.E) All of the above
F) None of the above

Question 7

The most common data for testing economic theories come from

Accepted Answer

A)   carefully controlled and conducted laboratory experiments.
B)   computer models of economies.
C)   historical episodes of economic change.
D)   centrally planned economies.E) All of the above
F) B) and C)

Question 8

Figure 2-13 
-Refer to Figure 2-10.The slope of the curve between points A and B is

Accepted Answer

A)   -5/2
B)   -2/5
C)   2/5
D)   5/2E) A) and B)
F) A) and D)

Question 9

Economists make assumptions in order to

Accepted Answer

A)   mimic the methodologies employed by other scientists.
B)   minimize the number of experiments that yield no useful data.
C)   minimize the likelihood that some aspect of the problem at hand is being overlooked.
D)   focus their thinking on the essence of the problem at hand.E) All of the above
F) A) and C)

Question 10

Microeconomics is the study of

Accepted Answer

A)   how money affects the economy.
B)   how individual households and firms make decisions.
C)   how government affects the economy.
D)   how the economy as a whole works.E) A) and D)
F) A) and C)

Question 11

For economists,substitutes for laboratory experiments often come in the form of

Accepted Answer

A)   natural experiments offered by history.
B)   untested theories.
C)   "rules of thumb" and other such conveniences.
D)   reliance upon the wisdom of elders in the economics profession.E) None of the above
F) A) and D)

Question 12

Figure 2-7 
-Refer to Figure 2-7.For this economy,as more and more books are produced,the opportunity cost of an additional book produced,in terms of ribeye steaks,

Accepted Answer

A)   remains constant.
B)   increases.
C)   decreases.
D)   This cannot be determined from the graph.E) A) and D)
F) B) and C)

Question 13

Figure 2-4 
-Refer to Figure 2-4.Efficient production is represented by which point(s) ?

Accepted Answer

A)   A,B
B)   A,B,C
C)   A,B,D
D)   CE) A) and D)
F) All of the above

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The production possibilities frontier provides an illustration of the principle that

Accepted Answer

A)   trade can make everyone better off.
B)   governments can sometimes improve market outcomes.
C)   people face trade-offs.
D)   people respond to incentives.E) A) and B)
F) A) and D)

Question 17

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) B) and C)
F) A) and D)

Question 18

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

Accepted Answer

A)   Income tax rates should not have been cut as they were a few years ago.
B)   The quantity of money has grown too slowly in recent years.
C)   When the quantity of money grows rapidly,inflation is a predictable consequence.
D)   All of the above are positive statements.E) All of the above
F) B) and D)

Question 19

The art in scientific thinking is

Accepted Answer

A)   finding the right problem to study.
B)   deciding which assumptions to make.
C)   the ability to make an abstract subject easy to understand.
D)   not something in which economists have to be skilled.E) A) and B)
F) None of the above

Question 20

In the circular-flow diagram,firms consume all the goods and services that they produce.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Figure 2-4 -Refer to Figure 2-4.Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the circular-flow diagram,firms consume all the goods and services that they produce.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For economists,substitutes for laboratory experiments often come in the form of

Correct AnswerverifiedShow Answer

The nation's antitrust laws are enforced by economists at the Department of

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7.For this economy,as more and more books are produced,the opportunity cost of an additional book produced,in terms of ribeye steaks,

Correct AnswerverifiedShow Answer

The art in scientific thinking is

Correct AnswerverifiedShow Answer

Economists make assumptions in order to

Correct AnswerverifiedShow Answer

When two variables have a negative correlation,

Correct AnswerverifiedShow Answer

The most common data for testing economic theories come from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The production possibilities frontier provides an illustration of the principle that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

"If all economists were laid end to end,they would not reach a conclusion." Who made this whimsical observation?

Correct AnswerverifiedShow Answer

Microeconomics is the study of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-13 -Refer to Figure 2-10.The slope of the curve between points A and B is

Correct AnswerverifiedShow Answer

Historical episodes allow economists to illustrate and evaluate economic theories of the present.

Correct AnswerverifiedShow Answer

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