Question 1

Use the following graph to answer the following questions.
a. How would point J be represented as an ordered pair?
b. What type of curve is this?
c. Does this curve show a positive or negative correlation between price and quantity?
d. Compute the slope of D1 between points J and L.
e. What is the slope of D1 between points L and N? Why would you not have to calculate this answer?
f. What is it called if we move from D1 to D2?
g. How do you know that the slope of D2 is the same as the slope of D1?

Accepted Answer

a. 20,24)
b. a demand curve
c. a negativ...

Question 2

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 B)
F) B) and D)

Question 3

Figure 2-2 
-Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

Accepted Answer

A)   households are represented by Box A.
B)   firms are represented by Box C.
C)   firms are represented by Box A.
D)   firms are sellers in Box B.E) A) and B)
F) A) and C)

Question 4

The first number in any ordered pair is

Accepted Answer

A)   the x-coordinate.
B)   the y-coordinate.
C)   the vertical location of the point.
D)   the slope.E) None of the above
F) All of the above

Question 5

Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction.

Accepted Answer

A)   The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
B)   The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
C)   Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
D)   Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.E) None of the above
F) A) and B)

Question 6

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Accepted Answer

A)   This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons.
B)   This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy.
C)   This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies.
D)   This would never happen. Policymakers always follow the advice of economists.E) C) and D)
F) A) and B)

Question 7

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Accepted Answer

A)   Transit ridership increased in Atlanta following an increase in gas prices.
B)   Federal tax revenue increased following a decrease in the tax rate.
C)   Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances.
D)   Following the imposition of austerity measures, the growth rate of the economy in Greece slowed.E) B) and C)
F) A) and D)

Question 8

When income increases the slope of an individual's demand curve, the demand curve

Accepted Answer

A)   turns positive.
B)   becomes undefined.
C)   remains negative.
D)   becomes infinite.E) A) and C)
F) B) and C)

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) A) and D)
F) C) and D)

Question 10

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 11

In the circular-flow diagram,

Accepted Answer

A)   taxes flow from households to firms, and transfer payments flow from firms to households.
B)   income payments flow from firms to households, and sales revenue flows from households to firms.
C)   resources flow from firms to households, and goods and services flow from households to firms.
D)   inputs and outputs flow in the same direction as the flow of dollars, from firms to households.E) C) and D)
F) A) and D)

Question 12

Figure 2-9
Panel a)  Panel b) 
  
-Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point J to point L is

Accepted Answer

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

Question 13

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

Question 14

Figure 2-21 
-Refer to Figure 2-21. According to the graph, snowstorms

Accepted Answer

A)   and snowblowers sold are positively correlated.
B)   and snowblowers sold are negatively correlated
C)   and snowblowers sold are uncorrelated.
D)   are caused by more snowblowers being sold.E) B) and C)
F) A) and C)

Question 15

In the ordered pair 3, 6) , 3 is the

Accepted Answer

A)   x-coordinate.
B)   y-coordinate.
C)   origin.
D)   slope.E) B) and C)
F) A) and B)

Question 16

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Accepted Answer

A)   sound logic.
B)   reverse causality.
C)   omitted variables.
D)   bias.E) C) and D)
F) A) and D)

Question 17

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a. On the graph, identify the area of feasible outcomes and the area of infeasible outcomes.
b. On the graph, label a point that is efficient and a point that is inefficient.
c. On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy.
d. On a second graph, illustrate the effect of a new computerized assembly line in the production of hammers on this economy.

Accepted Answer

The answer of Draw a production possibilities frontier showing increasing...

Question 18

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Accepted Answer

A)   Tariffs and import quotas usually reduce general economic welfare.
B)   A large federal budget deficit has an adverse effect on the economy.
C)   Minimum wage increases unemployment among young and unskilled workers.
D)   All of the above are correct.E) None of the above
F) C) and D)

Question 19

Policymaking in a representative democracy

Accepted Answer

A)   is straightforward and does not involve any disagreement.
B)   benefits from the input of economists, even if their advice is not always followed.
C)   is conducted without the input of economists.
D)   is always based exclusively on the results of economic analysis.E) C) and D)
F) B) and C)

Question 20

In the simple circular-flow diagram, the participants in the economy are

Accepted Answer

A)   firms and government.
B)   households and firms.
C)   households and government.
D)   households, firms, and government.E) None of the above
F) C) and D)

Exam 2: Thinking Like an Economist

When income increases the slope of an individual's demand curve, the demand curve

Correct Answer
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Correct Answer
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a. 20,24)
b. a demand curve
c. a negativ...
View Answer

Figure 2-21 -Refer to Figure 2-21. According to the graph, snowstorms

Correct Answer
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In the simple circular-flow diagram, the participants in the economy are

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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A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Correct Answer
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In the circular-flow diagram,

Correct Answer
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The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Correct Answer
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The first number in any ordered pair is

Correct Answer
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Policymaking in a representative democracy

Correct Answer
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In the ordered pair 3, 6) , 3 is the

Correct Answer
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Economists hold many positions advising the president and Congress including

Correct Answer
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Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

Correct Answer
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Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Correct Answer
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Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Correct Answer
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Correct Answer
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Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

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

Correct Answer
verified

Correct Answer
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Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point J to point L is

Correct Answer
verified

Exam 2: Thinking Like an Economist

When income increases the slope of an individual's demand curve, the demand curve

Correct AnswerverifiedShow Answer

Correct Answerverifieda. 20,24)b. a demand curvec. a negativ...View AnswerShow Answer

Figure 2-21 -Refer to Figure 2-21. According to the graph, snowstorms

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram, the participants in the economy are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Correct AnswerverifiedShow Answer

The first number in any ordered pair is

Correct AnswerverifiedShow Answer

Policymaking in a representative democracy

Correct AnswerverifiedShow Answer

In the ordered pair 3, 6) , 3 is the

Correct AnswerverifiedShow Answer

Economists hold many positions advising the president and Congress including

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Correct AnswerverifiedShow Answer

Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point J to point L is

Correct AnswerverifiedShow Answer

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a. 20,24)
b. a demand curve
c. a negativ...
View Answer

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