Question 1

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Accepted Answer

A)  Home experienced increased unemployment.
B)  Home experienced a decline in pear-producing technology.
C)  Home experienced an improvement in cellular phone-making technology.
D)  Home experienced a reduction in resources.E) A) and B)
F) A) and C)

Question 2

In the circular-flow diagram,factors of production include land,labor,and capital.

Accepted Answer

A) True 
 B)False

Question 3

In the circular-flow diagram,

Accepted Answer

A)  taxes flow from households to firms,and transfer payments flow from firms to households.
B)  income payments flow from firms to households,and sales revenue flows from households to firms.
C)  resources flow from firms to households,and goods and services flow from households to firms.
D)  inputs and outputs flow in the same direction as the flow of dollars,from firms to households.E) All of the above
F) B) and D)

Question 4

A model can be accurately described as a

Accepted Answer

A)  theoretical abstraction with very little value.
B)  device that is useful only to the people who created it.
C)  realistic and carefully constructed theory.
D)  simplification of reality.E) None of the above
F) A) and D)

Question 5

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Accepted Answer

A)  Most people who study economics are not very bright.
B)  Good economists must possess a rare combination of gifts.
C)  Economics is quite boring; hence,people tend to lose interest in it before mastering it.
D)  Good thinkers become frustrated with economics because it does not make use of the scientific method.E) A) and B)
F) B) and D)

Question 6

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Accepted Answer

A) True 
 B)False  False

Question 7

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Accepted Answer

A) True 
 B)False

Question 8

"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 9

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Accepted Answer

A) True 
 B)False

Question 10

Another term for factors of production is

Accepted Answer

A)  inputs.
B)  output.
C)  goods.
D)  services.E) All of the above
F) A) and B)

Question 11

John Maynard Keynes observed that during rare times of deep financial and economic crisis,when the "invisible hand" has temporarily ceased to function,

Accepted Answer

A)  there is a more urgent need for government to play an active role in restoring markets to their healthy function.
B)  government should avoid intervening in the market and wait patiently for proper market function to return.
C)  economists need to re-evaluate all of their basic principles.
D)  the economy can rely on entrepreneurs to take creative actions to end the crisis.E) All of the above
F) B) and C)

Question 12

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)  a controlled experiment that lead to the formulation of a scientific theory.
B)  being in the right place at the right time.
C)  an idea whose time had come.
D)  the interplay between observation and theory in science.E) A) and C)
F) C) and D)

Question 13

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)  similar opinions about the validity of economic theories
B)  significant differences in education
C)  differences in personal values
D)  a reliance on normative statement for research theoriesE) All of the above
F) B) and C)

Question 15

For economists,statements about the world are of two types:

Accepted Answer

A)  assumptions and theories.
B)  true statements and false statements.
C)  specific statements and general statements.
D)  positive statements and normative statements.E) A) and B)
F) A) and C)

Question 16

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

This diagram should duplicate the essential characteristics of the diagram in the text,with an explanation of the meaning of each flow and each market.It is important that the student understands that the inner loop represents the flow of real goods and services and that the outer loop represents the corresponding flow of payments.

Question 17

The scientific method is applicable to studying

Accepted Answer

A)  natural sciences,but not social sciences.
B)  social sciences,but not natural sciences.
C)  both natural sciences and social sciences.
D)  None of the above is correct.E) All of the above
F) B) and C)

Question 18

Figure 2-3 
-Refer to Figure 2-3.At which point is this economy producing its maximum possible quantity of pans?

Accepted Answer

A)  J
B)  L
C)  M
D)  NE) A) and C)
F) B) and C)

Question 19

Figure 2-2 
-Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

Accepted Answer

A)  firms and households.
B)  households and government.
C)  the markets for goods and services and the markets for financial assets.
D)  the markets for goods and the markets for services.E) None of the above
F) A) and B) A

Question 20

Figure 2-1 
-Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Accepted Answer

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

Exam 2: Thinking Like an Economist

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Correct Answer
verified

In the circular-flow diagram,factors of production include land,labor,and capital.

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

A model can be accurately described as a

Correct Answer
verified

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Correct Answer
verified

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Correct Answer
verified
False

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Correct Answer
verified

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

Correct Answer
verified

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Correct Answer
verified

Another term for factors of production is

Correct Answer
verified

John Maynard Keynes observed that during rare times of deep financial and economic crisis,when the "invisible hand" has temporarily ceased to function,

Correct Answer
verified

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct Answer
verified

Trade-offs are involved in most policy decisions.

Correct Answer
verified

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct Answer
verified

For economists,statements about the world are of two types:

Correct Answer
verified

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.

The scientific method is applicable to studying

Correct Answer
verified

Figure 2-3 -Refer to Figure 2-3.At which point is this economy producing its maximum possible quantity of pans?

Correct Answer
verified

Figure 2-2 -Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

Correct Answer
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A

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Correct Answer
verified

Exam 2: Thinking Like an Economist

Home is a country that produces two goods,pears and cellular phones.Last year,Home produced 450 bushels of pears and 1050 cellular phones.This year it produced 450 bushels of pears and 2000 cellular phones.Given no other information,which of the following events could explain this change?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,factors of production include land,labor,and capital.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

A model can be accurately described as a

Correct AnswerverifiedShow Answer

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Correct AnswerverifiedShow Answer

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Correct AnswerverifiedFalse

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Correct AnswerverifiedShow Answer

Another term for factors of production is

Correct AnswerverifiedShow Answer

John Maynard Keynes observed that during rare times of deep financial and economic crisis,when the "invisible hand" has temporarily ceased to function,

Correct AnswerverifiedShow Answer

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct AnswerverifiedShow Answer

Trade-offs are involved in most policy decisions.

Correct AnswerverifiedShow Answer

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct AnswerverifiedShow Answer

For economists,statements about the world are of two types:

Correct AnswerverifiedShow Answer

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.

The scientific method is applicable to studying

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3.At which point is this economy producing its maximum possible quantity of pans?

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

Correct AnswerverifiedA

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Correct AnswerverifiedShow Answer

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False

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A

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