Question 1

Which of the following is correct?

Accepted Answer

A)   A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)   A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)   A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)   A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) B) and C)
F) A) and B)

Question 2

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 3

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)   One economist believes the North American Free Trade Agreement NAFT
A)   has led to a loss of American jobs; another economist disputes this claim.
B)   One economist believes that when income taxes are cut, people will increase their spending; another economist believes that when income taxes are cut, people will increase their saving.
C)   One economist advises against increases in sales taxes because she thinks such increases are unfair to low- income people; another economist disputes the idea that increases in sales taxes are unfair to low-income people.
D)   One economist believes that, prior to the Civil War, slavery contributed to economic growth in the South; another economist believes that slavery held back the South's economic growth.E) All of the above
F) A) and C)

Question 4

Figure 2-22 
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively...

Question 5

Which of the following statements about models is correct?

Accepted Answer

A)   The more details a model includes, the better the model.
B)   Models assume away irrelevant details.
C)   Models cannot be used to explain how the economy functions.
D)   Models cannot be used to make predictions.E) None of the above
F) B) and C)

Question 6

Table 2-3
Production Possibilities for Footville
 
-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)   400 socks
B)   300 socks
C)   200 socks
D)   100 socksE) B) and C)
F) A) and D)

Question 7

Figure 2-22 
-Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Accepted Answer

The answer of Figure 2-22 
-Refer to Figure 2-22. What...

Question 8

The field of economics is traditionally divided into two broad subfields,

Accepted Answer

A)   national economics and international economics.
B)   consumer economics and producer economics.
C)   private sector economics and public sector economics.
D)   microeconomics and macroeconomics.E) A) and D)
F) B) and C)

Question 9

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 10

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Accepted Answer

A)   the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing
B)   the tradeoff between production of jewelry and production of clothing
C)   the opportunity cost of clothing in terms of jewelry
D)   the effect of economic growth on production possibilities involving jewelry and clothingE) None of the above
F) B) and C)

Question 11

Figure 2-3 
-Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Accepted Answer

A)   produce and sell goods and services
B)   hire and use factors of production
C)   own and sell factors of production
D)   exchange goods and services between firms and householdsE) All of the above
F) None of the above

Question 12

When two variables have a positive correlation,

Accepted Answer

A)   they tend to move in opposite directions.
B)   they tend to move in the same direction.
C)   one variable will move while the other remains constant.
D)   the variables' values are never negative.E) A) and B)
F) None of the above

Question 13

The most common data for testing economic theories come from

Accepted Answer

A)   carefully controlled and conducted laboratory experiments.
B)   computer models of economies.
C)   historical episodes of economic change.
D)   centrally planned economies.E) A) and B)
F) A) and C)

Question 14

The scientific method is

Accepted Answer

A)   the use of modern technology to understand the way the world works.
B)   the use of controlled laboratory experiments to understand the way the world works.
C)   the dispassionate development and testing of theories about how the world works.
D)   the search for evidence to support preconceived theories about how the world works.E) B) and D)
F) A) and D)

Question 15

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

Accepted Answer

land, labo...

Question 16

Figure 2-17 
-Refer to Figure 2-17. The movement from point B to point C is an)

Accepted Answer

A)   shift of the demand curve.
B)   movement along the demand curve.
C)   indication that the price of grapes has changed.
D)   indication that the costs incurred by firms that produce grapes have changed.E) None of the above
F) C) and D)

Question 17

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 18

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 19

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)   the nation is producing beyond its capacity, so inflation will occur.
B)   the nation is not using all available resources or is using inferior technology or both.
C)   the nation is producing an efficient combination of goods.
D)   there will be a large opportunity cost if the nation tries to increase production of any good.E) B) and D)
F) All of the above

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Which of the following is correct?

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Correct AnswerverifiedShow Answer

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

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

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Correct Answerverifiednegatively...View AnswerShow Answer

Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most common data for testing economic theories come from

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Correct AnswerverifiedShow Answer

The scientific method is

Correct AnswerverifiedShow Answer

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Correct AnswerverifiedShow Answer

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

Correct AnswerverifiedShow Answer

Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C is an)

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Correct AnswerverifiedShow Answer

Which of the following statements about models is correct?

Correct AnswerverifiedShow Answer

The field of economics is traditionally divided into two broad subfields,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
land, labo...
View Answer

Correct Answer
verified

Correct Answer
verified
negatively...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified