Question 1

The production possibilities frontier provides an illustration of the principle that

Accepted Answer

A)   trade can make everyone better off.
B)   governments can sometimes improve market outcomes.
C)   people face trade-offs.
D)   people respond to incentives.

Question 2

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.

Question 3

When constructing a production possibilities frontier,which of the following assumptions is not made?

Accepted Answer

A)   The economy produces only two goods or two types of goods.
B)   Firms produce goods using factors of production.
C)   The technology available to firms is given.
D)   The quantities of the factors of production that are available are increasing over the relevant time period.

Question 4

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Accepted Answer

A)   Most people who study economics are not very bright.
B)   Good economists must possess a rare combination of gifts.
C)   Economics is quite boring;hence,people tend to lose interest in it before mastering it.
D)   Good thinkers become frustrated with economics because it does not make use of the scientific method.

Question 5

In the circular-flow diagram,one loop represents the flow of goods,services,and factors of production,and the other loop represents the corresponding flow of dollars.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Economic models omit many details to allow us to see what is truly important.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is correct?

Accepted Answer

A)   Few economic models incorporate assumptions.
B)   Different economic models employ different sets of assumptions.
C)   Good economic models attempt to mimic reality as closely as possible.
D)   Economic models,to be accepted,must be tested by conducting experiments.

Question 9

Figure 2-14 
-Refer to Figure 2-14.This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Accepted Answer

A) True 
 B)False

Question 10

Positive statements are not

Accepted Answer

A)   descriptive.
B)   prescriptive.
C)   claims about how the world is.
D)   made by economists speaking as scientists.

Question 11

In the early 19th century,the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic.The villagers noticed that wherever doctors appeared,people died.Therefore,many doctors were chased away from villages,and some were even killed.This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A)   omitted variables.
B)   reverse causality.
C)   government propaganda.
D)   medical incompetence.

Question 12

The second number in any ordered pair is

Accepted Answer

A)   the x-coordinate.
B)   the y-coordinate.
C)   the horizontal location of the point.
D)   the slope.

Question 13

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-1 
-Refer to Figure 2-1.Which arrow represents the flow of land,labor,and capital?

Accepted Answer

A)   A
B)   B
C)   C
D)   D

Question 15

Figure 2-6 
-Refer to Figure 2-6.This economy cannot produce at which point(s) ?

Accepted Answer

A)   A,B,D
B)   C,D,F,G
C)   C,F,G
D)   D

Question 16

Almost all economists agree that local and state governments should

Accepted Answer

A)   eliminate subsidies to professional sports franchises.
B)   increase subsidies to professional sports franchises.
C)   copy economic policy from Washington,D.C.
D)   prevent companies from outsourcing work.

Question 17

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Accepted Answer

A) True 
 B)False

Question 18

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)   a landowner leases land to a farmer
B)   a farmer hires a teenager to help with harvest
C)   a construction company rents trucks for its business
D)   a woman buys corn for dinner

Exam 2: Thinking Like an Economist

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

Correct Answer
verified

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Correct Answer
verified

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Correct Answer
verified

Figure 2-6 -Refer to Figure 2-6.This economy cannot produce at which point(s) ?

Correct Answer
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Positive statements are not

Correct Answer
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When constructing a production possibilities frontier,which of the following assumptions is not made?

Correct Answer
verified

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

Correct Answer
verified

The production possibilities frontier provides an illustration of the principle that

Correct Answer
verified

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of land,labor,and capital?

Correct Answer
verified

In the circular-flow diagram,one loop represents the flow of goods,services,and factors of production,and the other loop represents the corresponding flow of dollars.

Correct Answer
verified

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Correct Answer
verified

Almost all economists agree that local and state governments should

Correct Answer
verified

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14.This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Correct Answer
verified

Correct Answer
verified

Economic models omit many details to allow us to see what is truly important.

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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The second number in any ordered pair is

Correct Answer
verified

Exam 2: Thinking Like an Economist

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

Correct AnswerverifiedShow Answer

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Correct AnswerverifiedShow Answer

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6.This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

Positive statements are not

Correct AnswerverifiedShow Answer

When constructing a production possibilities frontier,which of the following assumptions is not made?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The production possibilities frontier provides an illustration of the principle that

Correct AnswerverifiedShow Answer

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of land,labor,and capital?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,one loop represents the flow of goods,services,and factors of production,and the other loop represents the corresponding flow of dollars.

Correct AnswerverifiedShow Answer

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Correct AnswerverifiedShow Answer

Almost all economists agree that local and state governments should

Correct AnswerverifiedShow Answer

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economic models omit many details to allow us to see what is truly important.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The second number in any ordered pair is

Correct AnswerverifiedShow Answer

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