Question 1

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-11 
-Refer to Figure 2-11.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

A)   a decrease in unemployment
B)   a technological advance in the consumer goods industries
C)   a general technological advance
D)   an increase in the availability of capital-producing resourcesE) A) and B)
F) A) and C)

Question 3

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 4

Policies such as rent control and trade barriers persist

Accepted Answer

A)   because economists are about evenly divided as to the merits of those policies.
B)   because almost all economists agree that those policies have no discernible economic effects.
C)   because almost all economists agree that those policies are desirable.
D)   despite the fact that almost all economists agree that those policies are undesirable.E) A) and B)
F) C) and D)

Question 5

Which of the following statements is correct about environmental economists?

Accepted Answer

A)   They view economics as a framework for natural resource allocation.
B)   They work at government agencies as well as universities and advocacy groups.
C)   They use economic arguments and systems to persuade companies to clean up pollution and conserve natural resources.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 6

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 7

Table 2-3
Production Possibilities for Libraryland
 
-Refer to Table 2-3.What is the opportunity cost to Libraryland of increasing the production of books from 200 to 300?

Accepted Answer

A)   100 magazines
B)   150 magazines
C)   200 magazines
D)   350 magazinesE) None of the above
F) A) and B)

Question 8

A production possibilities frontier shifts outward when

Accepted Answer

A)   the economy experiences economic growth.
B)   the desires of the economy's citizens change.
C)   at least one of the basic principles of economics is violated.
D)   opportunity costs are lessened.E) A) and D)
F) None of the above

Question 9

Figure 2-8

-Refer to Figure 2-8,Panel (a) .The opportunity cost of moving from point M to point L is

Accepted Answer

A)   2 donuts.
B)   2 donuts and 4 cups of coffee.
C)   4 donuts.
D)   4 cups of coffee.E) C) and D)
F) A) and B)

Question 10

The circular-flow diagram is an example of

Accepted Answer

A)   a laboratory experiment.
B)   an economic model.
C)   a mathematical model.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of these terms are used interchangeably?

Accepted Answer

A)   "goods and services" and "inputs"
B)   "goods and services" and "factors of production"
C)   "inputs" and "factors of production"
D)   "land,labor,and capital" and "goods and services"E) None of the above
F) B) and D)

Question 13

In the markets for goods and services in the circular-flow diagram,households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-6 
-Refer to Figure 2-6.If this economy moved from point C to point F,then

Accepted Answer

A)   it still would not be producing efficiently.
B)   there would be no gain in either candles or clocks.
C)   it would be producing more candles and more clocks than at point C.
D)   It is not possible for this economy to move from point C to point F without additional resources.E) A) and C)
F) B) and C)

Question 16

Which of the following statements is (are) correct?

Accepted Answer

A)   Relative to some other scientists,economists find it more difficult to conduct experiments.
B)   Theory and observation are important in economics as well as in other sciences.
C)   To obtain data,economists often rely upon the natural experiments offered by history.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 17

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)   households and firms are both buyers.
B)   households and firms are both sellers.
C)   households are buyers and firms are sellers.
D)   households are sellers and firms are buyers.E) A) and C)
F) A) and B)

Question 18

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A)   income
B)   price
C)   preferences
D)   the availability of alternative goodsE) A) and D)
F) A) and B)

Question 19

The slope of a line that passes through the points (15,10) and (7,30) is

Accepted Answer

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

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

The slope of a line that passes through the points (15,10) and (7,30) is

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In the markets for goods and services in the circular-flow diagram,

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Figure 2-6 -Refer to Figure 2-6.If this economy moved from point C to point F,then

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In the markets for goods and services in the circular-flow diagram,households are buyers and firms are sellers.

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Macroeconomics is the study of economy-wide phenomena.

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Figure 2-8 -Refer to Figure 2-8,Panel (a) .The opportunity cost of moving from point M to point L is

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Policies such as rent control and trade barriers persist

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Which of the following statements is (are) correct?

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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.

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Unemployment causes production levels to be inefficient.

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

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Which of the following is not held constant when looking at an individual's demand curve?

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

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Which of these terms are used interchangeably?

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A production possibilities frontier shifts outward when

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Figure 2-11 -Refer to Figure 2-11.Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

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Which of the following statements is correct about environmental economists?

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Table 2-3 Production Possibilities for Libraryland -Refer to Table 2-3.What is the opportunity cost to Libraryland of increasing the production of books from 200 to 300?

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Good assumptions simplify a problem without substantially affecting the answer.

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The circular-flow diagram is an example of

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