Question 1

Figure 2-8 
-Refer to Figure 2-8. Inefficient production is represented by which points) ?

Accepted Answer

A)   K, M
B)   L
C)   L, M
D)   ME) A) and B)
F) A) and C)

Question 2

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A)   Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future.
B)   Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.
C)   Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation.
D)   Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.E) B) and D)
F) B) and C)

Question 3

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.E) A) and C)
F) All of the above

Question 4

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Accepted Answer

A)   interest
B)   capital
C)   spending by households on goods
D)   spending by households on servicesE) A) and D)
F) A) and C)

Question 5

When economists are trying to help improve the world, they are

Accepted Answer

A)   in the realm of positive economics rather than normative economics.
B)   in the realm of macroeconomics rather than microeconomics.
C)   scientists.
D)   policy advisers.E) B) and C)
F) A) and C)

Question 6

Figure 2-23 
-Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-7 
-Refer to Figure 2-7. If this economy moved from point P to point N, then

Accepted Answer

A)   it still would not be producing efficiently.
B)   there would be no gain in either engines or tvs.
C)   it would be producing more engines and more tvs than at point P.
D)   It is not possible for this economy to move from point P to point N without additional resources.E) B) and D)
F) A) and B)

Question 8

Historical episodes are not valuable to economists.

Accepted Answer

A) True 
 B)False

Question 9

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 10

Economic models

Accepted Answer

A)   cannot be useful if they are based on false assumptions.
B)   were once thought to be useful, but that is no longer true.
C)   must incorporate all aspects of the economy if they are to be useful.
D)   can be useful, even if they are not particularly realistic.E) C) and D)
F) A) and B)

Question 11

In the circular-flow diagram, firms produce

Accepted Answer

A)   goods and services using factors of production.
B)   output using inputs.
C)   factors of production using goods and services.
D)   Both a)  and b)  are correct.E) B) and D)
F) A) and D)

Question 12

The slope of a line passing through the points 15, 3)  and 10, 6)  is

Accepted Answer

A)   -3/5.
B)   3/5.
C)   -5/3.
D)   5/3.E) A) and B)
F) C) and D)

Question 13

Figure 2-23 
-Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 14

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.E) A) and D)
F) B) and C)

Question 15

Which of the following statements about economic models is correct?

Accepted Answer

A)   Economic models are built to mirror reality exactly.
B)   Economic models are useful, but they should not be used for the purpose of improving public policies.
C)   Because economic models omit many details, they allow us to see what is truly important.
D)   Economic models seldom incorporate equations or diagrams.E) None of the above
F) C) and D)

Question 16

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 17

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use an)

Accepted Answer

A)   pie chart.
B)   bar graph.
C)   time-series graph
D)   coordinate system.E) A) and D)
F) A) and C)

Question 18

Figure 2-4 
-Refer to Figure 2-4. This economy has the ability to produce at which points) ?

Accepted Answer

A)   Q, R, T, U
B)   R, T, U
C)   R, U
D)   TE) A) and B)
F) A) and C)

Question 19

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)   the effects of rent control on housing in New York City.
B)   the effects of foreign competition on the US auto industry.
C)   the effects of borrowing by the federal government.
D)   the effects of raising the gasoline tax on transit ridership.E) A) and D)
F) A) and C)

Question 20

Factors of production are

Accepted Answer

A)   the mathematical calculations firms make in determining their optimal production levels.
B)   social and political conditions that affect production.
C)   the physical relationships between economic inputs and outputs.
D)   inputs into the production process.E) C) and D)
F) A) and D)

Exam 2: Thinking Like an Economist

Correct Answer
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Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Correct Answer
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Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. This economy has the ability to produce at which points) ?

Correct Answer
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Factors of production are

Correct Answer
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Which of the following statements about economic models is correct?

Correct Answer
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When economists are trying to help improve the world, they are

Correct Answer
verified

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Correct Answer
verified

Figure 2-8 -Refer to Figure 2-8. Inefficient production is represented by which points) ?

Correct Answer
verified

Economic models

Correct Answer
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Historical episodes are not valuable to economists.

Correct Answer
verified

The slope of a line passing through the points 15, 3) and 10, 6) is

Correct Answer
verified

In the circular-flow diagram, firms produce

Correct Answer
verified

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use an)

Correct Answer
verified

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Correct Answer
verified

One way to characterize the difference between positive statements and normative statements is as follows:

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

Correct Answer
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In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Correct Answer
verified

Figure 2-23 -Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

Correct Answer
verified

A macroeconomist - as opposed to a microeconomist - would study

Correct Answer
verified

Exam 2: Thinking Like an Economist

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Correct AnswerverifiedShow Answer

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. This economy has the ability to produce at which points) ?

Correct AnswerverifiedShow Answer

Factors of production are

Correct AnswerverifiedShow Answer

Which of the following statements about economic models is correct?

Correct AnswerverifiedShow Answer

When economists are trying to help improve the world, they are

Correct AnswerverifiedShow Answer

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8. Inefficient production is represented by which points) ?

Correct AnswerverifiedShow Answer

Economic models

Correct AnswerverifiedShow Answer

Historical episodes are not valuable to economists.

Correct AnswerverifiedShow Answer

The slope of a line passing through the points 15, 3) and 10, 6) is

Correct AnswerverifiedShow Answer

In the circular-flow diagram, firms produce

Correct AnswerverifiedShow Answer

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use an)

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. If this economy moved from point P to point N, then

Correct AnswerverifiedShow Answer

One way to characterize the difference between positive statements and normative statements is as follows:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. Unemployment could cause this economy to produce at point B.

Correct AnswerverifiedShow Answer

A macroeconomist - as opposed to a microeconomist - would study

Correct AnswerverifiedShow Answer

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