Question 1

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-10
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-Refer to Figure 2-10. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 3

Normative statements are

Accepted Answer

A)  descriptive.
B)  claims about how the world is.
C)  made by economists speaking as policy advisers.
D)  claims about how variables in the economy normally behave.

Question 4

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Accepted Answer

A) True 
 B)False

Question 5

From which of the following agencies does the President not receive economic policy advice from economists?

Accepted Answer

A)  The Council of Economic Advisers
B)  The Department of the Treasury
C)  The Congressional Budget Office
D)  The Department of Labor

Question 6

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 7

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-12
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-Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Figure 2-12
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-Just like other scientific...

Question 9

Figure 2-8
 
-Refer to Figure 2-8. The slope of the curve between points A and B is

Accepted Answer

A)  -2.
B)  2.
C)    −12- \frac { 1 } { 2 }−21​  .
D)    12\frac { 1 } { 2 }21​  .

Question 10

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 11

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 12

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Accepted Answer

The answer of Is the following a positive or normative...

Question 13

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)  there will be a movement along the curve.
B)  the curve will rotate clockwise.
C)  the curve will be unaffected since only the variables on the axis affect the curve.
D)  the curve will shift.

Question 14

A circular-flow diagram is a model that

Accepted Answer

A)  helps to explain how consumers and the government interact with one another.
B)  explains how countries trade with each other.
C)  incorporates all aspects of the real economy.
D)  helps to explain how the economy is organized.

Question 15

An economy's production of two goods is efficient if

Accepted Answer

A)  the goods are produced using only some of society's available resources.
B)  the economy is producing at a point inside the production possibilities frontier.
C)  it is impossible to produce more of one good without producing less of the other.
D)  it is possible to produce more of one good without producing less of another good.

Question 16

Figure 2-3
 
-Refer to Figure 2-3. The opportunity cost of this economy moving from point A to point B is

Accepted Answer

A)  60 knives.
B)  20 forks.
C)  20 forks and 20 knives.
D)  20 knives.

Question 17

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 18

Figure 2-12
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-Refer to Figure 2-12. What do the outer arrows represent in the figure?

Accepted Answer

The answer of Figure 2-12
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-Refer to Figure 2-12....

Question 19

What type of statement is a prescriptive statement about how the world ought to be?

Accepted Answer

The answer of What type of statement is a prescriptive...

Question 20

Figure 2-4
Graph (a) 
Graph (b) 
  
-Refer to Figure 2-4, Graph (a)  and Graph (b) . A shift of the economy's production possibilities frontier from Graph (a)  to Graph (b)  could be caused by

Accepted Answer

A)  unemployment.
B)  an improvement in DVD production technology.
C)  an improvement in book production technology.
D)  an improvement in both DVD and book production technology.

Exam 2: Thinking Like an Economist

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Correct AnswerverifiedShow Answer

What type of statement is a prescriptive statement about how the world ought to be?

Correct AnswerverifiedShow Answer

An economy's production of two goods is efficient if

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Figure 2-3 -Refer to Figure 2-3. The opportunity cost of this economy moving from point A to point B is

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Figure 2-12 ​ ​ ​ ​ ​ ​ -Refer to Figure 2-12. What do the outer arrows represent in the figure?

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Correct AnswerverifiedShow Answer

Normative statements are

Correct AnswerverifiedShow Answer

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Correct AnswerverifiedShow Answer

Figure 2-4 Graph (a) Graph (b) -Refer to Figure 2-4, Graph (a) and Graph (b) . A shift of the economy's production possibilities frontier from Graph (a) to Graph (b) could be caused by

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A circular-flow diagram is a model that

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8. The slope of the curve between points A and B is

Correct AnswerverifiedShow Answer

From which of the following agencies does the President not receive economic policy advice from economists?

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct AnswerverifiedShow Answer

Figure 2-10 ​ ​ ​ ​ ​ -Refer to Figure 2-10. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Correct AnswerverifiedShow Answer

Figure 2-12 ​ ​ ​ ​ ​ ​ -Just like other scientific models, economic models simplify reality using

Correct AnswerverifiedShow Answer

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Correct AnswerverifiedShow Answer

When a relevant variable that is not named on either axis changes,

Correct AnswerverifiedShow Answer

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Correct AnswerverifiedShow Answer

A circular-flow diagram is a visual model of the economy.

Correct AnswerverifiedShow Answer

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Figure 2-12 -Refer to Figure 2-12. What do the outer arrows represent in the figure?

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Figure 2-8 $Figure 2-8 -Refer to Figure 2-8. The slope of the curve between points A and B is A) -2. B) 2. C) - \frac { 1 } { 2 } . D) \frac { 1 } { 2 } .$ -Refer to Figure 2-8. The slope of the curve between points A and B is

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Figure 2-10 -Refer to Figure 2-10. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

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Figure 2-12 -Just like other scientific models, economic models simplify reality using

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