Question 1

Table 2-5
 
-Refer to Table 2-5.Table 2-5 shows one set of production possibilities.What is the opportunity cost of increasing the production of cookies from 200 dozen to 400 dozen?

Accepted Answer

A)   100 pounds of coffee
B)   200 pounds of coffee
C)   300 pounds of coffee
D)   400 pounds of coffeeE) None of the above
F) A) and B)

Question 2

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)   The United States should not restrict employers from outsourcing work to foreign countries.
B)   The United States should withdraw from the North American Free Trade Agreement (NAFT
A)  .
C)   The United States should eliminate agricultural subsidies.
D)   Local and state governments should eliminate subsidies to professional sports franchises.E) B) and D)
F) A) and D)

Question 3

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

Question 4

The field of economics is traditionally divided into two broad subfields,

Accepted Answer

A)   national economics and international economics.
B)   consumer economics and producer economics.
C)   private sector economics and public sector economics.
D)   microeconomics and macroeconomics.E) B) and C)
F) A) and D)

Question 5

In the circular-flow diagram,which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land,labor,and capital
C)   dollars spent on goods and services
D)   wages,rent,and profitE) B) and C)
F) C) and D)

Question 6

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) None of the above
F) All of the above

Question 7

Figure 2-2 
-Refer to Figure 2-2.If the outer loop of this circular-flow diagram represents flows of dollars,then the inner loop includes

Accepted Answer

A)   flows of goods and services from households to firms.
B)   flows of inputs from households to firms.
C)   flows of rent payments paid to owners of land.
D)   flows of wages and salaries paid to workers.E) A) and D)
F) A) and C)

Question 8

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

Accepted Answer

A)   The price of gasoline came down sharply during the second half of 2006.
B)   If the government were to set a maximum legal price on gasoline,then there would be a shortage of gasoline.
C)   Income taxes should be reduced.
D)   The federal government obtains much of its revenue from income taxes.E) All of the above
F) A) and C)

Question 9

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-9
 
-Refer to Figure 2-9,Panel (a) .Production at point B is

Accepted Answer

A)   impossible and inefficient.
B)   impossible but efficient.
C)   possible but inefficient.
D)   possible and efficient.E) A) and B)
F) A) and C)

Question 11

Figure 2-5 
-Refer to Figure 2-5.The opportunity cost of this economy moving from point A to point C is

Accepted Answer

A)   75 soccer balls.
B)   125 soccer balls.
C)   125 soccer balls and 240 sweaters.
D)   240 sweaters.E) C) and D)
F) A) and B)

Question 12

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 13

While the scientific method is applicable to studying natural sciences,it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not an example of a positive,as opposed to normative,statement?

Accepted Answer

A)   Higher gasoline prices will reduce gasoline consumption.
B)   Equality is more important than efficiency.
C)   Trade restrictions lower our standard of living.
D)   If a nation wants to avoid inflation,it will restrict the growth rate of the quantity of money.E) A) and C)
F) A) and B)

Question 15

The production possibilities frontier illustrates

Accepted Answer

A)   the trade-off between efficiency and equality.
B)   the combination of output that an economy should produce.
C)   the combination of output that each member of society should consume.
D)   None of the above is correct.E) All of the above
F) A) and C)

Question 16

When two variables move in the same direction,the curve relating them is

Accepted Answer

A)   upward sloping,and we say the variables are positively related.
B)   upward sloping,and we say the variables are negatively related.
C)   downward sloping,and we say the variables are positively related.
D)   downward sloping,and we say the variables are negatively related.E) A) and B)
F) A) and C)

Question 17

In the circular-flow diagram,firms produce

Accepted Answer

A)   goods and services using factors of production.
B)   output using inputs.
C)   factors of production using goods and services.
D)   Both (a) and (b) are correct.E) All of the above
F) A) and D)

Question 18

The slope of an upward-sloping line is positive,and the slope of a downward-sloping line is negative.

Accepted Answer

A) True 
 B)False

Question 19

Different values are not a reason for disagreement among economists.

Accepted Answer

A) True 
 B)False

Question 20

Figure 2-14 
-Refer to Figure 2-14.Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

The slope of an upward-sloping line is positive,and the slope of a downward-sloping line is negative.

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Figure 2-9 -Refer to Figure 2-9,Panel (a) .Production at point B is

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Figure 2-2 -Refer to Figure 2-2.If the outer loop of this circular-flow diagram represents flows of dollars,then the inner loop includes

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Which of the following is not an example of a positive,as opposed to normative,statement?

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The field of economics is traditionally divided into two broad subfields,

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Figure 2-14 -Refer to Figure 2-14.Unemployment could cause this economy to produce at point B.

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Unemployment causes production levels to be inefficient.

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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?

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In the circular-flow diagram,which of the following items flows from households to firms through the markets for the factors of production?

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The trade-off between the production of one good and the production of another good can change over time because of technological advances.

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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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Table 2-5 -Refer to Table 2-5.Table 2-5 shows one set of production possibilities.What is the opportunity cost of increasing the production of cookies from 200 dozen to 400 dozen?

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Different values are not a reason for disagreement among economists.

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The essence of science is

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The production possibilities frontier illustrates

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Figure 2-5 -Refer to Figure 2-5.The opportunity cost of this economy moving from point A to point C is

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In the circular-flow diagram,firms produce

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When two variables move in the same direction,the curve relating them is

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While the scientific method is applicable to studying natural sciences,it is not applicable to studying a nation's economy.

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

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