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) All of the above
F) B) and C)

Question 2

The slope of a line passing through the points (15, 3)  and (10, 6)  is

Accepted Answer

A)   -3/5.
B)   3/5.
C)   -5/3.
D)   5/3.E) All of the above
F) A) and B)

Question 3

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 4

"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) B) and D)
F) A) and C)

Question 5

Positive statements are descriptive, while normative statements are prescriptive.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-23 
-Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

Accepted Answer

A) True 
 B)False

Question 7

An assumption an economist might make while studying international trade is

Accepted Answer

A)   there are only two countries.
B)   countries only produce two goods.
C)   technology does not change.
D)   All of the above are possible assumptions.E) None of the above
F) A) and D)

Question 8

Figure 2-23 
-Refer to Figure 2-23. Points A, B, and D represent feasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 9

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) B) and C)
F) A) and C)

Question 10

Which of the following allows you to provide information about the relationship between two variables?

Accepted Answer

A)   coordinate system.
B)   pie chart
C)   bar graph
D)   time-series graphE) None of the above
F) C) and D)

Question 11

Figure 2-2 
-Refer to Figure 2-2. Carla regularly buys fruits and vegetables at a grocery store. Roberto regularly pays a lawn- care company to mow his lawn. If the flow of fruits and vegetables from the grocery store to Carla is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Roberto to the lawn-care company is represented by an arrow

Accepted Answer

A)   from Box A to Box D.
B)   from Box B to Box C.
C)   from Box C to Box B.
D)   from Box D to Box A.E) None of the above
F) All of the above

Question 12

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

Question 13

In constructing models, economists

Accepted Answer

A)   leave out equations, since equations and models tend to contradict one another.
B)   ignore the long run, since models are useful only for short-run analysis.
C)   sometimes make assumptions that are contrary to features of the real world.
D)   try to include every feature of the economy.E) All of the above
F) A) and B)

Question 14

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Accepted Answer

A)   rotation of the curve.
B)   shift of the curve.
C)   movement along the curve.
D)   change in the slope of the curve.E) None of the above
F) A) and B)

Question 15

When studying the effects of public policy changes, economists

Accepted Answer

A)   always refrain from making assumptions.
B)   sometimes make different assumptions about the short run and the long run.
C)   consider only the direct effects of those policy changes and not the indirect effects.
D)   consider only the short-run effects of those policy changes and not the long-run effects.E) A) and D)
F) None of the above

Question 16

Economists build economic models by

Accepted Answer

A)   generating data.
B)   conducting controlled experiments in a lab.
C)   making assumptions.
D)   reviewing statistical forecasts.E) A) and B)
F) C) and D)

Question 17

The essence of science is

Accepted Answer

A)   the laboratory experiment.
B)   the scientific method.
C)   the study of nature, but not the study of society.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 18

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) B) and C)
F) All of the above

Question 19

The argument that purchases of minivans cause large families is an example of

Accepted Answer

A)   omitted variables.
B)   normative statements.
C)   reverse causality.
D)   bias.E) A) and B)
F) A) and C)

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

Economists build economic models by

Correct Answer
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In constructing models, economists

Correct Answer
verified

Positive statements are descriptive, while normative statements are prescriptive.

Correct Answer
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Figure 2-23 -Refer to Figure 2-23. Points A, B, and D represent feasible outcomes for this economy.

Correct Answer
verified

When studying the effects of public policy changes, economists

Correct Answer
verified

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct Answer
verified

The argument that purchases of minivans cause large families is an example of

Correct Answer
verified

An assumption an economist might make while studying international trade is

Correct Answer
verified

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 Answer
verified

Which of the following allows you to provide information about the relationship between two variables?

Correct Answer
verified

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Correct Answer
verified

The slope of a line passing through the points (15, 3) and (10, 6) is

Correct Answer
verified

The essence of science is

Correct Answer
verified

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

Correct Answer
verified

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

Correct Answer
verified

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

Correct Answer
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Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

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

Correct Answer
verified

The circular-flow diagram is an example of

Correct Answer
verified

Correct Answer
verified

Exam 2: Thinking Like an Economist

Economists build economic models by

Correct AnswerverifiedShow Answer

In constructing models, economists

Correct AnswerverifiedShow Answer

Positive statements are descriptive, while normative statements are prescriptive.

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. Points A, B, and D represent feasible outcomes for this economy.

Correct AnswerverifiedShow Answer

When studying the effects of public policy changes, economists

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct AnswerverifiedShow Answer

The argument that purchases of minivans cause large families is an example of

Correct AnswerverifiedShow Answer

An assumption an economist might make while studying international trade is

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

Which of the following allows you to provide information about the relationship between two variables?

Correct AnswerverifiedShow Answer

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Correct AnswerverifiedShow Answer

The slope of a line passing through the points (15, 3) and (10, 6) is

Correct AnswerverifiedShow Answer

The essence of science is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The circular-flow diagram is an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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