Question 1

Figure 2-3 
-Refer to Figure 2-3.This economy has the ability to produce at which point(s) ?

Accepted Answer

A)   J,K,M,N
B)   K,M,N
C)   K,N
D)   ME) B) and C)
F) None of the above

Question 2

When a variable that is not named on either axis of a graph changes,we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

While the production possibilities frontier is a useful model,it cannot be used to illustrate economic growth.

Accepted Answer

A) True 
 B)False

Question 5

An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Accepted Answer

A) True 
 B)False

Question 6

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements,including which of the following?

Accepted Answer

A)   Tariffs and import quotas usually reduce general economic welfare.
B)   A large federal budget deficit has an adverse effect on the economy.
C)   A minimum wage increases unemployment among young and unskilled workers.
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 7

When studying the effects of public policy changes,economists

Accepted Answer

A)   always refrain from making assumptions.
B)   sometimes make different assumptions about the short run and the long run.
C)   consider only the direct effects of those policy changes and not the indirect effects.
D)   consider only the short-run effects of those policy changes and not the long-run effects.E) B) and C)
F) A) and D)

Question 8

Which of the following statements about the circular-flow diagram is correct?

Accepted Answer

A)   One must imagine that the economy operates without money in order to make sense of the diagram.
B)   The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
C)   The government cannot be excluded as a decision maker in a circular-flow diagram.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 9

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.E) C) and D)
F) A) and D)

Question 10

In a certain economy,peanuts and books are produced,and the economy currently operates on its production possibilities frontier.Which of the following events would allow the economy to produce more peanuts and more books,relative to the quantities of those goods that are being produced now?

Accepted Answer

A)   Unemployed labor is put to work producing peanuts and books.
B)   The economy puts its idle capital to work producing peanuts and books.
C)   The economy experiences economic growth.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 11

The Federal Reserve

Accepted Answer

A)   designs tax policy.
B)   enforces the nation's antitrust laws.
C)   sets the nation's monetary policy.
D)   analyzes data on workers.E) None of the above
F) C) and D)

Question 12

In economics,capital refers to

Accepted Answer

A)   the finances necessary for firms to produce their products.
B)   buildings and machines used in the production process.
C)   the money households use to purchase firms' output.
D)   stocks and bonds.E) B) and D)
F) All of the above

Question 13

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)   negative economic statement.
B)   positive economic statement.
C)   normative economic statement.
D)   statement that contradicts one of the basic principles of economics.E) B) and D)
F) A) and D)

Question 14

Figure 2-4 
-Refer to Figure 2-4.It is not possible for this economy to produce at point

Accepted Answer

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

Question 15

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Accepted Answer

A) True 
 B)False

Question 16

The x-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) All of the above
F) A) and D)

Question 17

Which of the following is not an example of a graph of a single variable?

Accepted Answer

A)   a pie chart
B)   a bar graph
C)   a time-series graph
D)   a scatterplotE) A) and C)
F) None of the above

Question 18

In constructing models,economists

Accepted Answer

A)   leave out equations,since equations and models tend to contradict one another.
B)   ignore the long run,since models are useful only for short-run analysis.
C)   make assumptions that are contrary to features of the real world.
D)   try to include every feature of the economy.E) None of the above
F) A) and C)

Question 19

Figure 2-14 
-Refer to Figure 2-14.The opportunity cost of moving from point B to point A is zero.

Accepted Answer

A) True 
 B)False

Question 20

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Figure 2-4 -Refer to Figure 2-4.It is not possible for this economy to produce at point

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The x-coordinate of an ordered pair specifies the

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While the production possibilities frontier is a useful model,it cannot be used to illustrate economic growth.

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Figure 2-3 -Refer to Figure 2-3.This economy has the ability to produce at which point(s) ?

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The Federal Reserve

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In economics,capital refers to

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When a variable that is not named on either axis of a graph changes,we read the change as a movement along the curve.

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"Prices rise when the quantity of money rises rapidly" is an example of a

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Which of the following is not an example of a graph of a single variable?

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In a certain economy,peanuts and books are produced,and the economy currently operates on its production possibilities frontier.Which of the following events would allow the economy to produce more peanuts and more books,relative to the quantities of those goods that are being produced now?

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

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A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements,including which of the following?

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Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point B to point A is zero.

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An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Correct AnswerverifiedShow Answer

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Correct AnswerverifiedShow Answer

When studying the effects of public policy changes,economists

Correct AnswerverifiedShow Answer

Which of the following statements about the circular-flow diagram is correct?

Correct AnswerverifiedShow Answer

Economists speaking like scientists make

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In constructing models,economists

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A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Correct AnswerverifiedShow Answer

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