Question 1

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

Accepted Answer

A)   Universal health care would be good for U.S. citizens.
B)   An increase in the cigarette tax would cause a decrease in the number of smokers.
C)   A decrease in the minimum wage would decrease unemployment.
D)   A law requiring the federal government to balance its budget would increase economic growth.E) C) and D)
F) B) and C)

Question 2

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 D)

Question 3

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Accepted Answer

A)   A ceiling on rents reduces the quantity and quality of housing available.
B)   Fiscal policy has a significant stimulative impact on a less than fully employed economy.
C)   The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged.
D)   The United States should implement universal health care for its citizens.E) B) and C)
F) All of the above

Question 4

Figure 2-8
 
-Refer to Figure 2-8, 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 C)
F) A) and B)

Question 5

The x-coordinate is the

Accepted Answer

A)   first number of an ordered pair and represents the point's horizontal location.
B)   second number of an ordered pair and represents the point's horizontal location.
C)   first number of an ordered pair and represents the point's vertical location.
D)   second number of an ordered pair and represents the point's vertical location.E) C) and D)
F) None of the above

Question 6

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 7

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-16
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service
 
-Refer to Figure 2-16. A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars. You warn the policymaker about making a reverse causality mistake with which of the following statements?

Accepted Answer

A)   Higher gas prices are causing more people to choose the commuter rail over driving.
B)   The service frequency was increased in response to an increase in the number of passengers per hour.
C)   There is a positive relationship between frequency of stops and number of passengers.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 9

Economists make assumptions to

Accepted Answer

A)   provide issues for political discussion.
B)   make a complex world easier to understand.
C)   make it easier to teach economic concepts and analysis.
D)   create policy alternatives that are incomplete or subject to criticism.E) B) and C)
F) A) and D)

Question 10

Table 2-3
Production Possibilities for Libraryland
 
-Refer to Table 2-3. Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of an additional 100 books is constant at 50 magazines.
B)   The opportunity cost of an additional 100 books is constant at 100 magazines.
C)   Libraryland's production possibilities frontier is a straight, downward-sloping line.
D)   The opportunity cost of an additional 100 books increases as more books are produced.E) C) and D)
F) All of the above

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)   using all of the scarce resources it has available.
B)   conserving on resources, rather than using all available resources.
C)   getting all it can get from the scarce resources it has available.
D)   able to produce more than what is currently being produced without additional resources.E) C) and D)
F) A) and C)

Question 13

"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 14

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

Accepted Answer

A)   contradiction in economic theory.
B)   positive economic statement.
C)   negative economic statement.
D)   normative economic statement.E) C) and D)
F) All of the above

Question 15

When two variables move in opposite directions, the curve relating them is upward sloping, and we say the variables are positively related.

Accepted Answer

A) True 
 B)False

Question 16

A relatively steep demand curve indicates that

Accepted Answer

A)   quantity demanded will adjust only slightly to a price change.
B)   quantity demanded will adjust significantly to a price change.
C)   quantity demanded will not adjust to a price change.
D)   the change in quantity demanded will exactly equal a change in price.E) B) and C)
F) A) and D)

Question 17

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Accepted Answer

A)   the impact of minimum-wage laws on employment in the fast food industry
B)   the effect of changes in household saving rates on the growth rate of national income
C)   the impact of faster money growth on the rate of inflation
D)   a comparison of alternative tax policies and their respective impacts on the rate of the nation's economic growthE) All of the above
F) B) and C)

Question 18

The country of Aceland produces two goods, televisions and computers. Last year, it produced 200 televisions and 500 computers. This year, it produced 250 televisions and 600 computers. Given no other information, which of the following events could not explain this change?

Accepted Answer

A)   Aceland experienced a reduction in unemployment.
B)   Aceland experienced an improvement in computer-making technology.
C)   Aceland acquired more resources.
D)   Any of these events could, in fact, explain the change.E) A) and D)
F) A) and C)

Question 19

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 20

When studying the effects of changes in public policy, economists believe that

Accepted Answer

A)   it is important to distinguish between the short run and the long run.
B)   the assumptions used in studying those effects should be the same for the short run as for the long run.
C)   the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)   the long-run effects of those changes are always more beneficial to society than are the short-run effects.E) None of the above
F) All of the above

Exam 2: Thinking Like an Economist

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Correct Answer
verified

Unemployment causes production levels to be inefficient.

Correct Answer
verified

Economists make assumptions to

Correct Answer
verified

The country of Aceland produces two goods, televisions and computers. Last year, it produced 200 televisions and 500 computers. This year, it produced 250 televisions and 600 computers. Given no other information, which of the following events could not explain this change?

Correct Answer
verified

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct Answer
verified

A relatively steep demand curve indicates that

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Correct Answer
verified

When studying the effects of changes in public policy, economists believe that

Correct Answer
verified

An economic outcome is said to be efficient if the economy is

Correct Answer
verified

The x-coordinate is the

Correct Answer
verified

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

Correct Answer
verified

Table 2-3 Production Possibilities for Libraryland -Refer to Table 2-3. Which of the following statements is correct?

Correct Answer
verified

When two variables move in opposite directions, the curve relating them is upward sloping, and we say the variables are positively related.

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

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 2: Thinking Like an Economist

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Correct AnswerverifiedShow Answer

Unemployment causes production levels to be inefficient.

Correct AnswerverifiedShow Answer

Economists make assumptions to

Correct AnswerverifiedShow Answer

The country of Aceland produces two goods, televisions and computers. Last year, it produced 200 televisions and 500 computers. This year, it produced 250 televisions and 600 computers. Given no other information, which of the following events could not explain this change?

Correct AnswerverifiedShow Answer

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct AnswerverifiedShow Answer

A relatively steep demand curve indicates that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Correct AnswerverifiedShow Answer

When studying the effects of changes in public policy, economists believe that

Correct AnswerverifiedShow Answer

An economic outcome is said to be efficient if the economy is

Correct AnswerverifiedShow Answer

The x-coordinate is the

Correct AnswerverifiedShow Answer

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

Correct AnswerverifiedShow Answer

Table 2-3 Production Possibilities for Libraryland -Refer to Table 2-3. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

When two variables move in opposite directions, the curve relating them is upward sloping, and we say the variables are positively related.

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

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

Correct AnswerverifiedShow Answer

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

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

Correct Answer
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