Question 1

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 2

Production possibilities frontiers are usually bowed outward. This is because

Accepted Answer

A)  the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
B)  it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced.
C)  of the effects of technological change.
D)  resources are specialized; that is, some are better at producing particular goods rather than other goods.E) None of the above
F) A) and B)

Question 3

Table 2-1
The following table contains some production possibilities for an economy for a given month.   Tables  Chairs 530010?15100\begin{array} { | c | c | } \hline 	ext { Tables } & 	ext { Chairs } \\hline 5 & 300 \\hline 10 & ? \\hline 15 & 100 \\hline\end{array} Tables 51015​ Chairs 300?100​​ 
-Refer to Table 2-1. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)   100.
B)   150.
C)   200.
D)   250. E) All of the above
F) B) and D)

Question 4

Table 2-5
   Cooki=s (in dazens)   Caffe (inguund)  10000800350600650400800200100001150\begin{array} { | c | c | } \hline 	ext { Cooki=s (in dazens)  } & 	ext { Caffe (inguund)  } \\hline 1000 & 0 \\hline 800 & 350 \\hline 600 & 650 \\hline 400 & 800 \\hline 200 & 1000 \\hline 0 & 1150 \\hline\end{array} Cooki=s (in dazens)  10008006004002000​ Caffe (inguund)  035065080010001150​​ 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Accepted Answer

A)  bowed outward indicating increasing opportunity costs.
B)  bowed outward indicating decreasing opportunity costs.
C)  a straight line indicating constant opportunity costs.
D)  bowed inward indicating decreasing opportunity costs. E) B) and D)
F) C) and D)

Question 5

Figure 2-15
Relationship between Price and Cups of Coffee 
-Refer to Figure 2-15. The slope of the line containing points A and B is

Accepted Answer

A)  -1/2.
B)  -2.
C)  1/2.
D)  2.E) A) and B)
F) All of the above

Question 6

When an economy is operating inside its production possibilities frontier, we know that

Accepted Answer

A)  there are unused resources or inefficiencies in the economy.
B)  all of the economy's resources are fully employed.
C)  economic growth would have to occur in order for the economy to move to a point on the frontier.
D)  in order to produce more of one good, the economy would have to give up some of the other good.E) All of the above
F) B) and C)

Question 7

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)  a controlled experiment that lead to the formulation of a scientific theory.
B)  being in the right place at the right time.
C)  an idea whose time had come.
D)  the interplay between observation and theory in science.E) B) and D)
F) A) and D)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The scientific method is applicable to studying

Accepted Answer

A)  natural sciences, but not social sciences.
B)  social sciences, but not natural sciences.
C)  both natural sciences and social sciences.
D)  None of the above is correct.E) A) and C)
F) A) and B)

Question 10

Albert Einstein once made the following observation about science:

Accepted Answer

A)  "The whole of science is nothing more than the refinement of everyday thinking."
B)  "The whole of science is nothing more than an interesting intellectual exercise."
C)  "In order to understand science, one must rely solely on abstraction."
D)  "In order to understand science, one must transcend everyday thinking."E) All of the above
F) C) and D)

Question 11

Identify each of the following topics as being part of microeconomics or macroeconomics:
a.the impact of a change in consumer income on the purchase of luxury automobiles
b.the effect of a change in the price of Coke on the purchase of Pepsi
c.the impact of a war in the Middle East on the rate of inflation in the United States
d.factors influencing the rate of economic growth
e.factors influencing the demand for tractors
f. the impact of tax policy on national saving
g. the effect of pollution taxes on the U.S. copper industry
h. the degree of competition in the cable television industry
i. the effect of a balanced-budget amendment on economic stability
j. the impact of deregulation on the savings and loan industry

Accepted Answer

a, b, e, g, h, and j...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Normative conclusions

Accepted Answer

A)  come from positive analysis alone.
B)  are based on ignorance of positive analysis.
C)  involve value judgments.
D)  reflect the economist's role as scientist.E) None of the above
F) A) and B)

Question 14

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 D)
F) None of the above

Question 15

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)  labor
B)  land
C)  capital
D)  moneyE) B) and C)
F) A) and D)

Question 16

Figure 2-3 
-Refer to Figure 2-3. Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

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

Question 17

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A)  less than 0.
B)  between zero and 1.
C)  between one and infinity.
D)  undefined.E) C) and D)
F) B) and C)

Question 18

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

Question 19

Economists use one standard set of assumptions to answer all economic questions.

Accepted Answer

A) True 
 B)False

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

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

Correct Answer
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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

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. The slope of the line containing points A and B is

Correct Answer
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The scientific method is applicable to studying

Correct Answer
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Correct Answer
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Correct Answer
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a, b, e, g, h, and j...
View 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 Answer
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Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of goods and services?

Correct Answer
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When an economy is operating inside its production possibilities frontier, we know that

Correct Answer
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Normative conclusions

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

Correct Answer
verified

Production possibilities frontiers are usually bowed outward. This is because

Correct Answer
verified

Albert Einstein once made the following observation about science:

Correct Answer
verified

In the circular-flow diagram, which of the following is not a factor of production?

Correct Answer
verified

Economists use one standard set of assumptions to answer all economic questions.

Correct Answer
verified

Figure 2-3 -Refer to Figure 2-3. Unemployment could cause this economy to produce at which point(s) ?

Correct Answer
verified

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Correct Answer
verified

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct Answer
verified

The scientific method can be applied to the study of economics.

Correct Answer
verified

Exam 2: Thinking Like an Economist

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

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

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. The slope of the line containing points A and B is

Correct AnswerverifiedShow Answer

The scientific method is applicable to studying

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverifieda, b, e, g, h, and j...View AnswerShow 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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When an economy is operating inside its production possibilities frontier, we know that

Correct AnswerverifiedShow Answer

Normative conclusions

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Production possibilities frontiers are usually bowed outward. This is because

Correct AnswerverifiedShow Answer

Albert Einstein once made the following observation about science:

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following is not a factor of production?

Correct AnswerverifiedShow Answer

Economists use one standard set of assumptions to answer all economic questions.

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. Unemployment could cause this economy to produce at which point(s) ?

Correct AnswerverifiedShow Answer

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Correct AnswerverifiedShow Answer

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct AnswerverifiedShow Answer

The scientific method can be applied to the study of economics.

Correct AnswerverifiedShow Answer

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a, b, e, g, h, and j...
View Answer

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