Question 1

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-14
 
-Refer to Figure 2-14.The movement from point A to point B is a(n)

Accepted Answer

A)   shift of the demand curve.
B)   indication of a change in preferences for grapes.
C)   movement along the demand curve.
D)   indication of an increase in income.E) C) and D)
F) None of the above

Question 3

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 4

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)   the effects of rent control on housing in New York City.
B)   the effects of foreign competition on the US auto industry.
C)   the effects of borrowing by the federal government.
D)   the effects of raising the gasoline tax on transit ridership.E) B) and D)
F) A) and C)

Question 5

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)   would likely be made by an economist acting as a policy advisor.
B)   would require values and data in order to be evaluated.
C)   would require data but not values in order to be evaluated.
D)   could not be evaluated by economists acting as scientists.E) A) and D)
F) A) and C)

Question 6

"Other things equal,an increase in supply causes a decrease in price" is a normative statement,not a positive statement.

Accepted Answer

A) True 
 B)False

Question 7

The slope of a steep 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) B) and D)
F) B) and C)

Question 8

Alfonso has noticed that increases in unemployment insurance claims are associated with recessions,and therefore he advocates limits on unemployment insurance so as to prevent recessions.Mary has noticed that most drug addicts once attended schools,and therefore she advocates getting rid of schools so as to prevent drug addiction.

Accepted Answer

A)   The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
B)   The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
C)   Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
D)   Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.E) A) and C)
F) All of the above

Question 9

If an economy can produce more of one good without giving up any of another good,then the economy's current production point is inefficient.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-7
 
-Refer to Figure 2-7.For this economy,as more and more hammers are produced,the opportunity cost of an additional hammers produced,in terms of nails,

Accepted Answer

A)   remains constant.
B)   increases.
C)   decreases.
D)   This cannot be determined from the graph.E) A) and B)
F) A) and C)

Question 11

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A)   all resources are scarce.
B)   economic growth is always occurring.
C)   the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.
D)   the only way to get more of one good is to get less of the other.E) B) and C)
F) A) and C)

Question 12

Which of these statements about economic models is correct?

Accepted Answer

A)   For economists, economic models provide insights about the world.
B)   Economic models are built with assumptions.
C)   Economic models are often composed of equations and diagrams.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 13

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 14

Who said,"The whole of science is nothing more than the refinement of everyday thinking"?

Accepted Answer

A)   Isaac Newton
B)   Albert Einstein
C)   Adam Smith
D)   Benjamin FranklinE) A) and D)
F) C) and D)

Question 15

In the circular-flow diagram,

Accepted Answer

A)   factors of production flow from government to firms.
B)   goods and services flow from households to firms.
C)   income paid to the factors of production flows from firms to households.
D)   spending on goods and services flows from firms to households.E) A) and B)
F) B) and D)

Question 16

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) A) and D)
F) A) and B)

Question 17

Figure 2-14
 
-Refer to Figure 2-14.Points A,B,and D represent efficient outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 18

Because it is difficult for economists to use experiments to generate data,they generally must

Accepted Answer

A)   do without data.
B)   substitute assumptions for data when data are unavailable.
C)   rely upon hypothetical data that were previously concocted by other economists.
D)   use whatever data the world gives them.E) B) and D)
F) None of the above

Question 19

In the simple circular-flow diagram,households

Accepted Answer

A)   are the only decision makers.
B)   own the factors of production.
C)   are buyers of inputs.
D)   consume only some of the goods and services that firms produce.E) C) and D)
F) B) and D)

Question 20

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist.

The bowed shape of the production possibilities frontier can be explained by the fact that

Correct Answer
verified

Figure 2-7 -Refer to Figure 2-7.For this economy,as more and more hammers are produced,the opportunity cost of an additional hammers produced,in terms of nails,

Correct Answer
verified

The slope of a steep upward-sloping line will be a

Correct Answer
verified

If an economy can produce more of one good without giving up any of another good,then the economy's current production point is inefficient.

Correct Answer
verified

Good assumptions simplify a problem without substantially affecting the answer.

Correct Answer
verified

Because it is difficult for economists to use experiments to generate data,they generally must

Correct Answer
verified

Which of these statements about economic models is correct?

Correct Answer
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The x-coordinate is the

Correct Answer
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Figure 2-14 -Refer to Figure 2-14.Points A,B,and D represent efficient outcomes for this economy.

Correct Answer
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"Other things equal,an increase in supply causes a decrease in price" is a normative statement,not a positive statement.

Correct Answer
verified

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Correct Answer
verified

A macroeconomist - as opposed to a microeconomist - would study

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Correct Answer
verified

Who said,"The whole of science is nothing more than the refinement of everyday thinking"?

Correct Answer
verified

Correct Answer
verified

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct Answer
verified

In the simple circular-flow diagram,households

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14.The movement from point A to point B is a(n)

Correct Answer
verified

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

Correct Answer
verified

Exam 2: Thinking Like an Economist.

The bowed shape of the production possibilities frontier can be explained by the fact that

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7.For this economy,as more and more hammers are produced,the opportunity cost of an additional hammers produced,in terms of nails,

Correct AnswerverifiedShow Answer

The slope of a steep upward-sloping line will be a

Correct AnswerverifiedShow Answer

If an economy can produce more of one good without giving up any of another good,then the economy's current production point is inefficient.

Correct AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

Because it is difficult for economists to use experiments to generate data,they generally must

Correct AnswerverifiedShow Answer

Which of these statements about economic models is correct?

Correct AnswerverifiedShow Answer

The x-coordinate is the

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.Points A,B,and D represent efficient outcomes for this economy.

Correct AnswerverifiedShow Answer

"Other things equal,an increase in supply causes a decrease in price" is a normative statement,not a positive statement.

Correct AnswerverifiedShow Answer

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Correct AnswerverifiedShow Answer

A macroeconomist - as opposed to a microeconomist - would study

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Correct AnswerverifiedShow Answer

Who said,"The whole of science is nothing more than the refinement of everyday thinking"?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram,households

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.The movement from point A to point B is a(n)

Correct AnswerverifiedShow Answer

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

Correct AnswerverifiedShow Answer

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