Question 1

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 C)
F) A) and D)

Question 2

Examples of graphs of a single variable include pie charts,bar graphs,and time-series graphs.

Accepted Answer

A) True 
 B)False

Question 3

According to economist John Maynard Keynes,a great economist must also be a(n)

Accepted Answer

A)   mathematician.
B)   historian.
C)   philosopher.
D)   All of the above are correct.E) B) and D)
F) A) and C)

Question 4

Figure 2-14 
-Refer to Figure 2-14.It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Accepted Answer

A) True 
 B)False

Question 5

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 6

When a production possibilities frontier is bowed outward,the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 7

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A)   performing an experiment in an economic system.
B)   applying mathematical methods to economic analysis.
C)   analyzing available data.
D)   formulating theories about economic events.E) None of the above
F) A) and D)

Question 8

When two variables have a negative 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 positive.E) B) and D)
F) All of the above

Question 9

Figure 2-14 
-Refer to Figure 2-14.It is possible for this economy to produce 75 doghouses.

Accepted Answer

A) True 
 B)False

Question 10

A circular-flow diagram is a model that

Accepted Answer

A)   helps to explain how participants in the economy interact with one another.
B)   helps to explain how the economy is organized.
C)   incorporates all aspects of the real economy.
D)   Both (a) and (b) are correct.E) All of the above
F) B) and C)

Question 11

In the circular-flow diagram,which of the following items does not flow from households to firms?

Accepted Answer

A)   revenue
B)   land,labor,and capital
C)   factors of production
D)   profitE) A) and B)
F) All of the above

Question 12

The effects of foreign competition on the U.S.textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a normative,as opposed to positive,statement?

Accepted Answer

A)   Universal health care would be good for U.S.citizens.
B)   An increase in the cigarette tax would cause a decrease in the number of smokers.
C)   A decrease in the minimum wage would decrease unemployment.
D)   A law requiring the federal government to balance its budget would increase economic growth.E) A) and B)
F) A) and C)

Question 14

Figure 2-5 
-Refer to Figure 2-5.If this economy devotes one-half of its available resources to the production of soccer balls and the other half to the production of sweaters,it could produce

Accepted Answer

A)   150 sweaters and 100 soccer balls.
B)   150 sweaters and 150 soccer balls.
C)   300 sweaters and 200 soccer balls.
D)   We would have to know the details of this economy's technology in order to determine this.E) A) and B)
F) A) and D)

Question 15

When a production possibilities frontier is bowed outward,the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 16

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Accepted Answer

A)   have no questions but hundreds of answers.
B)   have 100 questions and 3,000 answers.
C)   have 1,000 questions but no answers.
D)   never produce a winner.E) A) and C)
F) A) and D)

Question 17

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 18

In the circular-flow diagram,firms produce goods and services using the factors of production.

Accepted Answer

A) True 
 B)False

Question 19

The Federal Reserve

Accepted Answer

A)   designs tax policy.
B)   enforces the nation's antitrust laws.
C)   sets the nation's monetary policy.
D)   analyzes data on workers.E) A) and D)
F) All of the above

Question 20

Figure 2-12 
-Refer to Figure 2-12.One difference between points A and B is that

Accepted Answer

A)   Point B is unattainable with current resources,but point A is attainable.
B)   All resources are fully employed at point A but there is unemployment at point B.
C)   More output can be produced at point A but no additional output can be produced at point B.
D)   This economy produces more blankets at point B than at point A.E) B) and C)
F) A) and B)

Exam 2: Thinking Like an Economist

Which of the following is an example of a normative,as opposed to positive,statement?

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward,the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Correct AnswerverifiedShow Answer

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Correct AnswerverifiedShow Answer

When two variables have a negative correlation,

Correct AnswerverifiedShow Answer

A circular-flow diagram is a model that

Correct AnswerverifiedShow Answer

Economic growth causes a production possibilities frontier to shift outward.

Correct AnswerverifiedShow Answer

The Federal Reserve

Correct AnswerverifiedShow Answer

In the circular-flow diagram,firms produce goods and services using the factors of production.

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward,the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,which of the following items does not flow from households to firms?

Correct AnswerverifiedShow Answer

Examples of graphs of a single variable include pie charts,bar graphs,and time-series graphs.

Correct AnswerverifiedShow Answer

According to economist John Maynard Keynes,a great economist must also be a(n)

Correct AnswerverifiedShow Answer

A relatively flat demand curve indicates that

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Correct AnswerverifiedShow Answer

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Correct AnswerverifiedShow Answer

The effects of foreign competition on the U.S.textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

A circular-flow diagram is a visual model of the economy.

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5.If this economy devotes one-half of its available resources to the production of soccer balls and the other half to the production of sweaters,it could produce

Correct AnswerverifiedShow Answer

Figure 2-12 -Refer to Figure 2-12.One difference between points A and B is that

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 75 doghouses.

Correct AnswerverifiedShow Answer

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