Question 1

Figure 2-7 
-Refer to Figure 2-7.Efficient production is represented by which point(s) ?

Accepted Answer

A)   J
B)   J,K
C)   J,K,L
D)   J,K,ME) C) and D)
F) A) and B)

Question 2

A relatively flat 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) A) and D)
F) A) and C)

Question 3

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-8

-Refer to Figure 2-8,Panel (a) .The opportunity cost of one cup of coffee is highest when the economy produces

Accepted Answer

A)   0 cups of coffee.
B)   2 cups of coffee.
C)   4 cups of coffee.
D)   6 cups of coffee.E) C) and D)
F) None of the above

Question 5

Who would be more likely to study the effects of foreign competition on the accounting industry,a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 6

Which of the following is not correct?

Accepted Answer

A)   The slope of a line will be a small positive number for a fairly flat upward-sloping line.
B)   The slope of a line will be a large positive number for a steep upward-sloping line.
C)   The slope of a line will be a negative number for a downward-sloping line.
D)   The slope of a line will be infinite for a horizontal line.E) A) and B)
F) A) and C)

Question 7

Figure 2-2 
-Refer to Figure 2-2.If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram,then

Accepted Answer

A)   the flow of factors of production is also part of what is represented by the inner loop.
B)   the flow of income paid to households is also part of what is represented by the inner loop.
C)   the flow of revenue to firms is also part of what is represented by the inner loop.
D)   households must be sellers of output.E) All of the above
F) B) and C)

Question 8

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

Question 9

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)   should produce.
B)   wants to produce.
C)   can produce.
D)   demands.E) C) and D)
F) A) and B)

Question 10

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 11

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

Question 12

"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 13

Economists hold many positions advising the president and Congress including

Accepted Answer

A)   being a member of the Council of Economic Advisers.
B)   helping to enforce antitrust laws at the Department of Justice.
C)   conducting research at the Congressional Budget Office.
D)   All of these are possible positions that economists hold.E) A) and C)
F) C) and D)

Question 14

Figure 2-4 
-Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

Accepted Answer

A)   0 notepads and 40 lamps.
B)   35 notepads and 20 lamps.
C)   70 notepads and 0 lamps.
D)   70 notepads and 40 lamps.E) A) and C)
F) All of the above

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) None of the above
F) A) and C)

Question 16

Which of the following statements about economic models is correct?

Accepted Answer

A)   Economic models are built to mirror reality exactly.
B)   Economic models are useful,but they should not be used for the purpose of improving public policies.
C)   Because economic models omit many details,they allow us to see what is truly important.
D)   Economic models seldom incorporate equations or diagrams.E) None of the above
F) All of the above

Question 17

"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 18

Figure 2-4 
-Refer to Figure 2-4.The opportunity cost of this economy moving from point Z to point Y is

Accepted Answer

A)   0 lamps.
B)   10 lamps.
C)   10 notepads.
D)   20 lamps.E) A) and B)
F) None of the above

Question 19

When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

Accepted Answer

A)   is asked to explain the cause of an economic event.
B)   is asked to recommend a policy to improve economic outcomes.
C)   is asked as a policy adviser.
D)   does not have enough information to respond.E) A) and C)
F) A) and B)

Question 20

Figure 2-17
Relationship Between Years of Education and Annual Income 
-Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Which of the following is not correct?

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The production possibilities frontier is a graph that shows the various combinations of output that an economy

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Two variables that have a negative correlation move in opposite directions.

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Figure 2-8 -Refer to Figure 2-8,Panel (a) .The opportunity cost of one cup of coffee is highest when the economy produces

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When studying the effects of public policy changes,economists

Correct AnswerverifiedShow Answer

When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

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Which of the following statements about economic models is correct?

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A relatively flat demand curve indicates that

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Figure 2-17 Relationship Between Years of Education and Annual Income -Economists try to address their subject with a scientist's objectivity.

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Figure 2-7 -Refer to Figure 2-7.Efficient production is represented by which point(s) ?

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Who would be more likely to study the effects of foreign competition on the accounting industry,a macroeconomist or a microeconomist?

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

Figure 2-4 -Refer to Figure 2-4.The opportunity cost of this economy moving from point Z to point Y is

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

Historical episodes allow economists to illustrate and evaluate current economic theories.

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Economists hold many positions advising the president and Congress including

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Which of these statements about economic models is correct?

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Figure 2-2 -Refer to Figure 2-2.If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram,then

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Economists build economic models by

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Figure 2-4 -Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

Correct AnswerverifiedShow Answer

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