Question 1

Economists use some familiar terms in specialized ways

Accepted Answer

A)   to make the subject sound more complex than it is.
B)   because every respectable field of study has its own language.
C)   to provide a new and useful way of thinking about the world.
D)   because it was too difficult to come up with new terms.E) B) and C)
F) None of the above

Question 2

Table 2-3
Production Possibilities for Libraryland
 
-Refer to Table 2-3. What is the opportunity cost to Libraryland of increasing the production of books from 200 to 300?

Accepted Answer

A)   100 magazines
B)   150 magazines
C)   200 magazines
D)   350 magazinesE) All of the above
F) A) and B)

Question 3

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

Question 4

Figure 2-9
 
-Refer to Figure 2-9, Panel (a) . The opportunity cost of one computer is highest when the economy produces

Accepted Answer

A)   0 computers.
B)   6 computers.
C)   10 computers.
D)   12 computers.E) A) and D)
F) A) and C)

Question 5

Figure 2-2
 
-Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

Accepted Answer

A)   the flow of factors of production is also part of what is represented by the inner loop.
B)   the flow of income paid to households is also part of what is represented by the inner loop.
C)   the flow of revenue to firms is also part of what is represented by the inner loop.
D)   households must be sellers of output.E) A) and B)
F) A) and C)

Question 6

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-14
 
-Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Accepted Answer

A) True 
 B)False

Question 8

The use of the coordinate system allows

Accepted Answer

A)   for the display of the flows of dollars, goods and services, and factors of production in an economic system.
B)   for the display of how labor and other resources are organized in the production process.
C)   for the display of two variables on a single graph.
D)   for the creation of pie charts and bar graphs.E) C) and D)
F) A) and D)

Question 9

Philip wants to create a graph containing the prices of apples and the corresponding quantities of apples demanded by customers. He should use a(n)

Accepted Answer

A)   pie chart.
B)   bar graph.
C)   time-series graph
D)   coordinate system.E) None of the above
F) B) and D)

Question 10

If a line passes through the points (20,5) and (10,10), then the slope of the line is -2.

Accepted Answer

A) True 
 B)False

Question 11

In the ordered pair (17, 75) , 17 is the

Accepted Answer

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

Question 12

In the circular-flow diagram,

Accepted Answer

A)   factors of production flow from government to firms.
B)   goods and services flow from households to firms.
C)   income paid to the factors of production flows from firms to households.
D)   spending on goods and services flows from firms to households.E) A) and B)
F) A) and D)

Question 13

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)   households provide firms with savings for investment.
B)   households provide firms with labor, land, and capital.
C)   firms provide households with output.
D)   firms provide households with profit.E) A) and C)
F) A) and D)

Question 14

Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.

Accepted Answer

A) True 
 B)False

Question 15

The x-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) B) and C)
F) All of the above

Question 16

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)   similar opinions about the validity of economic theories
B)   significant differences in education
C)   differences in personal values
D)   a reliance on normative statement for research theoriesE) B) and C)
F) A) and C)

Question 17

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A)   if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption
B)   once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other
C)   for an economy to consume more of one good, it must stop consuming the other good entirely
D)   for an economy to produce and consume goods, it must sacrifice environmental qualityE) None of the above
F) A) and D)

Question 18

An assumption an economist might make while studying international trade is

Accepted Answer

A)   there are only two countries.
B)   countries only produce two goods.
C)   technology does not change.
D)   All of the above are possible assumptions.E) None of the above
F) A) and D)

Question 19

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 D)
F) C) and D)

Question 20

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A)   enforce the nation's antitrust laws.
B)   set the nation's monetary policy.
C)   provide evidence that incumbent members of Congress are performing well in their jobs.
D)   provide independent evaluations of policy proposals.E) A) and C)
F) B) and C)

Exam 2: Thinking Like an Economist

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

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The x-coordinate of an ordered pair specifies the

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Table 2-3 Production Possibilities for Libraryland -Refer to Table 2-3. What is the opportunity cost to Libraryland of increasing the production of books from 200 to 300?

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If a line passes through the points (20,5) and (10,10), then the slope of the line is -2.

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Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct AnswerverifiedShow Answer

Which of the following trade-offs does the production possibilities frontier illustrate?

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Congress relies on economists at the Congressional Budget Office to

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An assumption an economist might make while studying international trade is

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Figure 2-9 -Refer to Figure 2-9, Panel (a) . The opportunity cost of one computer is highest when the economy produces

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Figure 2-14 -Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Correct AnswerverifiedShow Answer

In the markets for goods and services in the circular-flow diagram,

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In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Correct AnswerverifiedShow Answer

The use of the coordinate system allows

Correct AnswerverifiedShow Answer

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

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Figure 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

Economists use some familiar terms in specialized ways

Correct AnswerverifiedShow Answer

Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

In the ordered pair (17, 75) , 17 is the

Correct AnswerverifiedShow Answer

Philip wants to create a graph containing the prices of apples and the corresponding quantities of apples demanded by customers. He should use a(n)

Correct AnswerverifiedShow Answer

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