Question 1

Use the following Figure to answer the question : Figure 2-5:  
-Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Accepted Answer

A)   20 dryers.
B)   20 washers.
C)   20 dryers and 20 washers.
D)   60 dryers.E) B) and C)
F) B) and D)

Question 2

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) C) and D)

Question 3

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A)   ask winners of the Nobel Prize in Economics to evaluate their theories.
B)   argue that data is impossible to collect in economics.
C)   gather data from historical episodes of economic change.
D)   assume that data would support their theories.E) None of the above
F) A) and D)

Question 4

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

Accepted Answer

A)   increases as more of the good is produced.
B)   decreases as more of the good is produced.
C)   does not change as more of the good is produced.
D)   may increase, decrease, or not change as more of the good is produced.E) A) and B)
F) B) and D)

Question 5

The slope of a line that passes through the points 5, 8)  and 12, 12)  is

Accepted Answer

A)   -7/4.
B)   -4/7.
C)   4/7.
D)   7/4.E) A) and D)
F) A) and B)

Question 6

Use the following Figure to answer the question : Figure 2-23 : 
-Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 7

Use the following Figure to answer the question : Figure 2-8 :

-Refer to Figure 2-8. Point K represents an outcome in which

Accepted Answer

A)   production is inefficient.
B)   some of the economy's resources are unemployed.
C)   the economy is using all of its resources to produce hammers.
D)   the economy is using all of its nails to produce hammers.E) A) and B)
F) All of the above

Question 8

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)   the effect of foreign direct investment on economic growth
B)   the effect of a sales tax on the cigarette industry
C)   the effect of an investment tax credit on the economy's capital stock
D)   the effect of a war on government spendingE) All of the above
F) B) and C)

Question 9

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 10

The language of economics is

Accepted Answer

A)   needlessly arcane.
B)   valuable because it provides a new and useful way of learning about the world.
C)   easy to learn within a day.
D)   unnecessary to learn for a thorough understanding of economics.E) B) and D)
F) A) and B)

Question 11

Use the following Figure to answer the question : Figure 2-6 
-Refer to Figure 2-6. A movement from point H to point K could be caused by

Accepted Answer

A)   unemployment.
B)   a decrease in society's preference for pillows.
C)   fewer resources available for production of pillows.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 12

Use the following Figure to answer the question : Figure 2-3 : 
-Refer to Figure 2-3. What do the rectangles represent in the figure?

Accepted Answer

The answer of Use the following Figure to answer the...

Question 13

Macroeconomics is the study of

Accepted Answer

A)   individual decision makers.
B)   international trade.
C)   economy-wide phenomena.
D)   markets for large products.E) A) and B)
F) B) and C)

Question 14

An economy's production of two goods is efficient if

Accepted Answer

A)   all members of society consume equal portions of the goods.
B)   the goods are produced using only some of society's available resources.
C)   it is impossible to produce more of one good without producing less of the other.
D)   the opportunity cost of producing more of one good is zero.E) A) and B)
F) None of the above

Question 15

When two variables move in opposite directions, the curve relating them is upward sloping, and we say the variables are positively related.

Accepted Answer

A) True 
 B)False

Question 16

For economists, historical episodes

Accepted Answer

A)   are not worthy of study because they offer few insights into current economic events and problems.
B)   are not worthy of study because laboratory experiments provide more reliable data.
C)   are worthy of study because economists rely entirely on observation, rather than on theory.
D)   are worthy of study because they serve as valuable substitutes for laboratory experiments.E) B) and C)
F) A) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Use the following Figure to answer the question : Figure 2-6 
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Accepted Answer

A)   zero.
B)   40 blankets.
C)   120 pillows.
D)   360 blankets.E) A) and B)
F) A) and C)

Question 19

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Question 20

The y-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 C)
F) None of the above

Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct AnswerverifiedShow Answer

The slope of a line that passes through the points 5, 8) and 12, 12) is

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Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What do the rectangles represent in the figure?

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Use the following Figure to answer the question : Figure 2-6 -Refer to Figure 2-6. A movement from point H to point K could be caused by

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When two variables move in opposite directions, the curve relating them is upward sloping, and we say the variables are positively related.

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-5: -Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Correct AnswerverifiedShow Answer

For economists, historical episodes

Correct AnswerverifiedShow Answer

An economy's production of two goods is efficient if

Correct AnswerverifiedShow Answer

The y-coordinate is the

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The President counts among his economic advisors the Congressional Budget Office.

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

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The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

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Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. Points A, B, and D represent efficient outcomes for this economy.

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When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

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Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. Point K represents an outcome in which

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The language of economics is

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Instead of conducting laboratory experiments to generate data to test their theories, economists often

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Macroeconomics is the study of

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Use the following Figure to answer the question : Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

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Economists build economic models by

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