Question 1

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels) , or a combination of the two.
-Refer to Figure 2-14. The opportunity cost of moving from point U to point R is

Accepted Answer

A)   60 bushels of apples.
B)   80 bushels of apples.
C)   80 sweaters.
D)   160 sweaters.E) C) and D)
F) A) and C)

Question 3

A normative economic statement such as "The minimum wage should be abolished"

Accepted Answer

A)   would likely be made by an economist acting as a scientist.
B)   would require values and data to be evaluated.
C)   would require data but not values to be evaluated.
D)   could not be evaluated by economists acting as policy advisers.E) A) and B)
F) None of the above

Question 4

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Accepted Answer

A) True 
 B)False

Question 5

A model that shows how dollars flow through markets among households and firms is called the

Accepted Answer

A)   production possibilities frontier.
B)   circular-flow diagram.
C)   demand and supply diagram.
D)   comparative advantage model.E) A) and B)
F) None of the above

Question 6

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Accepted Answer

A) True 
 B)False

Question 7

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Accepted Answer

A)   the $50 represents a cost of production for Denny's firm.
B)   the $50 represents wages, rent, and profit to Denny's firm.
C)   Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton.
D)   Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.E) A) and B)
F) All of the above

Question 8

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 9

For an economist, the idea of making assumptions is regarded generally as a

Accepted Answer

A)   bad idea, since doing so leads to the omission of important ideas and variables from economic models.
B)   bad idea, since doing so invariably leads to data-collection problems.
C)   good idea, since doing so helps to simplify the complex world and make it easier to understand.
D)   good idea, since economic analysis without assumptions leads to complicated results that the general public finds hard to understand.E) B) and D)
F) B) and C)

Question 10

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

Question 11

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Accepted Answer

A) True 
 B)False

Question 12

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Accepted Answer

The answer of Like biologists and physicists, economists use the...

Question 13

Almost all economists agree that tariffs and import quotas

Accepted Answer

A)   reduces general economic welfare.
B)   increases general economic welfare.
C)   have no effect on general economic welfare.
D)   stimulate a less than fully employed economy.E) A) and B)
F) B) and C)

Question 14

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 15

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

Accepted Answer

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

Question 16

In addition to advising the president, one duty of the Council of Economic Advisers is to

Accepted Answer

A)   prepare the federal budget.
B)   write government regulations.
C)   advise Congress on economic matters.
D)   write the annual Economic Report of the President.E) A) and D)
F) A) and C)

Question 17

Figure 2-5 
-Refer to Figure 2-5. Efficient production is represented by which point(s) ?

Accepted Answer

A)   A, B
B)   A, B, D
C)   A, B, C
D)   CE) B) and D)
F) A) and C)

Question 18

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

Accepted Answer

A)   society's preferences.
B)   the available production technology.
C)   a fair distribution of the output.
D)   the available demand for the output.E) A) and D)
F) All of the above

Question 19

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. Which of the following could result in a movement from point A to point B?

Accepted Answer

A)   a change in income
B)   a change in the cost of producing a restaurant meal
C)   a change in the price of restaurant meals
D)   a change in the price of moviesE) All of the above
F) C) and D)

Question 20

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

Correct AnswerverifiedShow Answer

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels) , or a combination of the two. -Refer to Figure 2-14. The opportunity cost of moving from point U to point R is

Correct AnswerverifiedShow Answer

Economists use some familiar terms in specialized ways

Correct AnswerverifiedShow Answer

A pie chart is a way to display information regarding two variables.

Correct AnswerverifiedShow Answer

For an economist, the idea of making assumptions is regarded generally as a

Correct AnswerverifiedShow Answer

Two variables that have a negative correlation move in opposite directions.

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Correct AnswerverifiedShow Answer

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Correct AnswerverifiedShow Answer

A model that shows how dollars flow through markets among households and firms is called the

Correct AnswerverifiedShow Answer

A normative economic statement such as "The minimum wage should be abolished"

Correct AnswerverifiedShow Answer

The scientific method can be applied to the study of economics.

Correct AnswerverifiedShow Answer

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Correct AnswerverifiedShow Answer

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. Which of the following could result in a movement from point A to point B?

Correct AnswerverifiedShow Answer

Almost all economists agree that tariffs and import quotas

Correct AnswerverifiedShow Answer

In addition to advising the president, one duty of the Council of Economic Advisers is to

Correct AnswerverifiedShow Answer

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

Correct AnswerverifiedShow Answer

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