Question 1

Which of the following statements is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)   Americans deserve a cleaner environment.
B)   Reducing emissions reduces days missed from school due to asthma.
C)   All Americans are entitled to quality health care.
D)   Economic policies should focus on improving equality.E) A) and B)
F) A) and D)

Question 2

Efficiency is illustrated by

Accepted Answer

A)   both the production possibilities frontier and the circular-flow diagram.
B)   neither the production possibilities frontier nor the circular-flow diagram.
C)   the production possibilities frontier only.
D)   the circular-flow diagram only.E) A) and B)
F) A) and C)

Question 3

Which of the following is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)   When the minimum wage is increased, unemployment is a predictable consequence.
B)   The income tax rate should be increased to offset the budget deficit.
C)   Increasing government spending is the best way to help the economy move out of a recession.
D)   More than one of the above are positive statements.E) All of the above
F) C) and D)

Question 4

For economists, historical episodes

Accepted Answer

A)   are not worthy of study because they offer few insights into current economic events and problems.
B)   are not worthy of study because laboratory experiments provide more reliable data.
C)   are worthy of study because economists rely entirely on observation, rather than on theory.
D)   are worthy of study because they serve as valuable substitutes for laboratory experiments.E) A) and C)
F) A) and B) D

Question 5

Figure 2-15 
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. When society moves from point A to point B,

Accepted Answer

A)   the opportunity cost is the same as when society moves from point B to point C.
B)   it is giving up cars to get sofas.
C)   the opportunity cost is increasing.
D)   it moves from an inefficient point to an efficient point.E) B) and D)
F) C) and D)

Question 6

A demand curve shows the relationship between price and

Accepted Answer

A)   income.
B)   quantity demanded.
C)   production.
D)   income and quantity demanded.E) B) and D)
F) None of the above

Question 7

Joe and Fred are economists. Joe thinks that the wealthiest 10% of the US population should be taxed a rate higher than the rest of society because they can better afford it. Fred thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success. In this example, Joe and Fred

Accepted Answer

A)   disagree about the validity of a positive theory.
B)   have different normative views about tax policy.
C)   must both be incorrect because tax policy is never that simple.
D)   None of the above is correct.E) A) and B)
F) None of the above

Question 8

In the circular-flow diagram, in the markets for

Accepted Answer

A)   goods and services, households and firms are both sellers.
B)   goods and services, households are sellers and firms are buyers.
C)   the factors of production, households are sellers and firms are buyers.
D)   the factors of production, households and firms are both buyers.E) A) and C)
F) A) and B)

Question 9

Positive statements can be evaluated using data alone, but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-2 
-Refer to Figure 2-2. If households are buyers in the markets represented by Box C of this circular-flow diagram, then

Accepted Answer

A)   Box C must represent the markets for the factors of production.
B)   Box D must represent the markets for goods and services.
C)   firms are sellers in the markets represented by Box C.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 11

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

Question 12

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)   labor
B)   land
C)   capital
D)   moneyE) C) and D)
F) B) and C) D

Question 13

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 14

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

Accepted Answer

A)   spending.
B)   revenue.
C)   income.
D)   wages, rent, and profit.E) A) and B)
F) A) and C)

Question 15

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

Question 16

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 D)
F) None of the above

Question 17

Figure 2-9
Panel a)  Panel b) 
  
-Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point M to point L is

Accepted Answer

A)   2 donuts.
B)   2 donuts and 4 cups of coffee.
C)   4 donuts.
D)   4 cups of coffee.E) A) and B)
F) All of the above

Question 18

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

Accepted Answer

A)   An economist must also be a mathematician, historian, statesman, and philosopher in some degree.
B)   An economist must understand symbols and speak in words.
C)   An economist must be purposeful and disinterested in a simultaneous mood.
D)   An economist must understand environmental science, regulation, and political science.E) A) and B)
F) A) and C)

Question 19

The point where both x and y are zero is known as the

Accepted Answer

A)   origin.
B)   null.
C)   zero coordinate.
D)   center.E) A) and B)
F) B) and C)

Question 20

Figure 2-22 
-Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Accepted Answer

The answer of Figure 2-22 
-Refer to Figure 2-22. Is...

Exam 2: Thinking Like an Economist

Which of the following statements is an example of a positive, as opposed to normative, statement?

Correct Answer
verified

Efficiency is illustrated by

Correct Answer
verified

Which of the following is an example of a positive, as opposed to normative, statement?

Correct Answer
verified

For economists, historical episodes

Correct Answer
verified
D

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. When society moves from point A to point B,

Correct Answer
verified

A demand curve shows the relationship between price and

Correct Answer
verified

Correct Answer
verified

In the circular-flow diagram, in the markets for

Correct Answer
verified

Positive statements can be evaluated using data alone, but normative statements cannot.

Correct Answer
verified

Figure 2-2 -Refer to Figure 2-2. If households are buyers in the markets represented by Box C of this circular-flow diagram, then

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified
B

In the circular-flow diagram, which of the following is not a factor of production?

Correct Answer
verified
D

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

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

Correct Answer
verified

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

Correct Answer
verified

Almost all economists agree that tariffs and import quotas

Correct Answer
verified

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point M to point L is

Correct Answer
verified

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

Correct Answer
verified

The point where both x and y are zero is known as the

Correct Answer
verified

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Correct Answer
verified

Exam 2: Thinking Like an Economist

Which of the following statements is an example of a positive, as opposed to normative, statement?

Correct AnswerverifiedShow Answer

Efficiency is illustrated by

Correct AnswerverifiedShow Answer

Which of the following is an example of a positive, as opposed to normative, statement?

Correct AnswerverifiedShow Answer

For economists, historical episodes

Correct AnswerverifiedD

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. When society moves from point A to point B,

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between price and

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the circular-flow diagram, in the markets for

Correct AnswerverifiedShow Answer

Positive statements can be evaluated using data alone, but normative statements cannot.

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. If households are buyers in the markets represented by Box C of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedB

In the circular-flow diagram, which of the following is not a factor of production?

Correct AnswerverifiedD

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

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Almost all economists agree that tariffs and import quotas

Correct AnswerverifiedShow Answer

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point M to point L is

Correct AnswerverifiedShow Answer

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

Correct AnswerverifiedShow Answer

The point where both x and y are zero is known as the

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified