Question 1

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A)  If an economy wants to increase efficiency in production, then it must sacrifice equality in consumption.
B)  Once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other.
C)  For an economy to consume more of one good, it must stop consuming the other good entirely.
D)  For an economy to produce and consume goods, it must sacrifice environmental quality.E) A) and D)
F) All of the above

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-6 
-Refer to Figure 2-6. A movement from point H to point K could be caused by

Accepted Answer

A)  unemployment.
B)  a decrease in society's preference for pillows.
C)  fewer resources available for production of pillows.
D)  All of the above are correct.E) None of the above
F) B) and C)

Question 4

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Accepted Answer

land, labo...

Question 5

Figure 2-21 
-Refer to Figure 2-21. According to the graph, snowstorms

Accepted Answer

A)  and snowblowers sold are positively correlated.
B)  and snowblowers sold are negatively correlated
C)  and snowblowers sold are uncorrelated.
D)  are caused by more snowblowers being sold.E) B) and D)
F) All of the above

Question 6

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

Question 7

When economists disagree about whether a policy is fair, they are expressing a difference in

Accepted Answer

The answer of When economists disagree about whether a policy...

Question 8

In conducting their research, economists often substitute historical events and historical episodes for

Accepted Answer

A)  theories and observations.
B)  laboratory experiments.
C)  models.
D)  assumptions.E) None of the above
F) A) and C)

Question 9

Economists speaking like policy advisers make

Accepted Answer

A)  positive statements.
B)  descriptive statements.
C)  claims about how the world is.
D)  claims about how the world should be.E) C) and D)
F) None of the above

Question 10

In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often impractical to

Accepted Answer

A)  make use of theory and observation.
B)  rely upon the scientific method.
C)  conduct laboratory experiments.
D)  find articles or books that were written before 1900.E) B) and C)
F) A) and C)

Question 11

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a) . The opportunity cost of moving from point K to point L is

Accepted Answer

A)  0 cups of coffee.
B)  1 donut.
C)  2 donuts.
D)  4 cups of coffee.E) B) and D)
F) C) and D)

Question 12

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) None of the above
F) A) and B)

Question 13

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-7 
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

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

Question 15

The slope of a fairly flat upward-sloping line will be a

Accepted Answer

A)  small positive number.
B)  large positive number.
C)  small negative number.
D)  large negative number.E) C) and D)
F) B) and C)

Question 16

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A)  performing an experiment in an economic system.
B)  applying mathematical methods to economic analysis.
C)  analyzing available data.
D)  formulating theories about economic events.E) A) and B)
F) C) and D)

Question 17

"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) A) and B)
F) None of the above

Question 18

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) A) and C)
F) None of the above

Question 19

Figure 2-3 
-Refer to Figure 2-3. What do the rectangles represent in the figure?

Accepted Answer

The answer of Figure 2-3 
-Refer to Figure 2-3. What...

Question 20

Economic models are most often composed of diagrams and equations.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often impractical to

Correct AnswerverifiedShow Answer

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Correct AnswerverifiedShow Answer

In conducting their research, economists often substitute historical events and historical episodes for

Correct AnswerverifiedShow Answer

Policies such as rent control and trade barriers persist

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. A movement from point H to point K could be caused by

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of moving from point K to point L is

Correct AnswerverifiedShow Answer

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Correct Answerverifiedland, labo...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Economic models are most often composed of diagrams and equations.

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Correct AnswerverifiedShow Answer

When economists disagree about whether a policy is fair, they are expressing a difference in

Correct AnswerverifiedShow Answer

The slope of a fairly flat upward-sloping line will be a

Correct AnswerverifiedShow Answer

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Correct AnswerverifiedShow Answer

Economists speaking like policy advisers make

Correct AnswerverifiedShow Answer

The x-coordinate of an ordered pair specifies the

Correct AnswerverifiedShow Answer

Figure 2-21 -Refer to Figure 2-21. According to the graph, snowstorms

Correct AnswerverifiedShow Answer

The two loops in the circular-flow diagram represent

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. What do the rectangles represent in the figure?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following trade-offs does the production possibilities frontier illustrate?

Correct AnswerverifiedShow Answer

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land, labo...
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