Question 1

The x-coordinate is the

Accepted Answer

A)   first number of an ordered pair and represents the point's horizontal location.
B)   second number of an ordered pair and represents the point's horizontal location.
C)   first number of an ordered pair and represents the point's vertical location.
D)   second number of an ordered pair and represents the point's vertical location.E) A) and B)
F) A) and C)

Question 2

In constructing models,economists

Accepted Answer

A)   leave out equations,since equations and models tend to contradict one another.
B)   ignore the long run,since models are useful only for short-run analysis.
C)   sometimes make assumptions that are contrary to features of the real world.
D)   try to include every feature of the economy.E) None of the above
F) A) and D)

Question 3

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 4

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 C)
F) B) and D) B

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Economic models can help us understand reality only when they include all details of the economy.

Accepted Answer

A) True 
 B)False

Question 7

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 8

The opportunity cost of something is what you give up to get it.

Accepted Answer

A) True 
 B)False

Question 9

Figure 2-5 
-Refer to Figure 2-5.A movement from point C to point D could be caused by

Accepted Answer

A)   unemployment.
B)   a decrease in society's preference for sweaters.
C)   fewer resources available for production of sweaters.
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 10

Figure 2-7 
-Refer to Figure 2-7.Which point on the graph best represents the fact that,because resources are scarce,not every conceivable outcome is feasible?

Accepted Answer

A)   point J
B)   point K
C)   point L
D)   point ME) C) and D)
F) B) and C)

Question 11

Production possibilities frontiers can be used to illustrate scarcity,trade-offs,opportunity cost,efficiency,unemployment,technological advances,and economic growth.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not correct?

Accepted Answer

A)   The slope of a line will be a small positive number for a fairly flat upward-sloping line.
B)   The slope of a line will be a large positive number for a steep upward-sloping line.
C)   The slope of a line will be a negative number for a downward-sloping line.
D)   The slope of a line will be infinite for a horizontal line.E) A) and B)
F) A) and C)

Question 13

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) C) and D) C

Question 14

Table 2-3
Production Possibilities for Libraryland
 
-Refer to Table 2-3.Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of an additional 100 books is constant at 50 magazines.
B)   The opportunity cost of an additional 100 books is constant at 100 magazines.
C)   Libraryland's production possibilities frontier is a straight,downward-sloping line.
D)   The opportunity cost of an additional 100 books increases as more books are produced.E) A) and B)
F) A) and C)

Question 15

Figure 2-14 
-Refer to Figure 2-14.Point B represents an inefficient outcome for this economy.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-3 
-Refer to Figure 2-3.Efficient production is represented by which point(s) ?

Accepted Answer

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

Question 17

The ordered pair that represents the origin on a graph is

Accepted Answer

A)   (1,1) .
B)   (0,0) .
C)   (-1,-1) .
D)   () .E) B) and D)
F) A) and D)

Question 18

Which of the following is a correct statement about production possibilities frontiers?

Accepted Answer

A)   An economy can produce only on the production possibilities frontier.
B)   An economy can produce at any point inside or outside a production possibilities frontier.
C)   An economy can produce at any point on or inside the production possibilities frontier,but not outside the frontier.
D)   An economy can produce at any point inside the production possibilities frontier,but not on or outside the frontier.E) B) and C)
F) A) and D)

Question 19

Points on the production possibilities frontier represent efficient levels of production.

Accepted Answer

A) True 
 B)False  True

Question 20

Figure 2-2 
-Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

Accepted Answer

A)   firms and households.
B)   households and government.
C)   the markets for goods and services and the markets for financial assets.
D)   the markets for goods and the markets for services.E) None of the above
F) B) and C)

Exam 2: Thinking Like an Economist

The x-coordinate is the

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In constructing models,economists

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When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

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

Correct AnswerverifiedB

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

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Economic models can help us understand reality only when they include all details of the economy.

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Assumptions can simplify the complex world and make it easier to understand.

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The opportunity cost of something is what you give up to get it.

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Figure 2-5 -Refer to Figure 2-5.A movement from point C to point D could be caused by

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Figure 2-7 -Refer to Figure 2-7.Which point on the graph best represents the fact that,because resources are scarce,not every conceivable outcome is feasible?

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Production possibilities frontiers can be used to illustrate scarcity,trade-offs,opportunity cost,efficiency,unemployment,technological advances,and economic growth.

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Which of the following is not correct?

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A macroeconomist - as opposed to a microeconomist - would study

Correct AnswerverifiedC

Table 2-3 Production Possibilities for Libraryland -Refer to Table 2-3.Which of the following statements is correct?

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Figure 2-14 -Refer to Figure 2-14.Point B represents an inefficient outcome for this economy.

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Figure 2-3 -Refer to Figure 2-3.Efficient production is represented by which point(s) ?

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The ordered pair that represents the origin on a graph is

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Which of the following is a correct statement about production possibilities frontiers?

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Points on the production possibilities frontier represent efficient levels of production.

Correct AnswerverifiedTrue

Figure 2-2 -Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

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B

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C

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True

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