Question 1

Figure 2-23 
-Refer to Figure 2-23. Points A, B, and D represent feasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 2

Economists sometimes give conflicting advice because

Accepted Answer

A)   graduate students in economics are encouraged to argue with each other.
B)   economists have different values and scientific judgment.
C)   economists acting as scientists do not like to agree with economists acting as policy advisers.
D)   economics is more of a belief system than a science.E) B) and C)
F) A) and C)

Question 3

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Figure 2-16 
-Refer to Figure 2-16. The graph shown is known as a

Accepted Answer

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

Question 6

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Accepted Answer

Council of...

Question 7

The slope of a line that passes through the points 20, 30)  and 40, 14)  is

Accepted Answer

A)   -5/4.
B)   -4/5.
C)   4/5.
D)   5/4.E) B) and C)
F) None of the above

Question 8

When economists make positive statements, they are

Accepted Answer

A)   speaking as scientists.
B)   speaking as policy advisers.
C)   making claims about how the world should be.
D)   revealing that they are very conservative in their views of how the world works.E) A) and C)
F) B) and C)

Question 9

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)   a landowner leases land to a farmer
B)   a farmer hires a teenager to help with harvest
C)   a construction company rents trucks for its business
D)   a woman buys corn for dinnerE) B) and C)
F) A) and B)

Question 10

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

Accepted Answer

A)   increases as more of the good is produced.
B)   decreases as more of the good is produced.
C)   does not change as more of the good is produced.
D)   may increase, decrease, or not change as more of the good is produced.E) B) and C)
F) A) and C)

Question 11

A model can be accurately described as a

Accepted Answer

A)   theoretical abstraction with very little value.
B)   device that is useful only to the people who created it.
C)   realistic and carefully constructed theory.
D)   simplification of reality.E) A) and C)
F) A) and B)

Question 12

When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

Accepted Answer

A)   is asked to explain the cause of an economic event.
B)   is asked to recommend a policy to improve economic outcomes.
C)   is asked as a policy adviser.
D)   does not have enough information to respond.E) None of the above
F) All of the above

Question 13

A circular-flow model and production possibilities frontier are similar in that

Accepted Answer

A)   neither allows economic analysis to occur.
B)   neither can be represented visually on a graph.
C)   both make use of assumptions.
D)   both make use of complex equations to arrive at solutions.E) B) and C)
F) None of the above

Question 14

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 15

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-16 
-Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Accepted Answer

A)   The less coffee a person drinks per day, the more time he can go without sleep.
B)   There is no relationship between how much coffee per day a person drinks and how long he can go without sleep.
C)   The more coffee a person drinks per day, the more time he can go without sleep.
D)   The more coffee a person drinks per day, the less time he can go without sleep.E) C) and D)
F) A) and B)

Question 17

Which of the following statements is correct?

Accepted Answer

A)   Economists almost always find it easy to conduct experiments in order to test their theories.
B)   Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories.
C)   Economics is a social science rather than a true science because it cannot employ the scientific method.
D)   Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.E) A) and B)
F) C) and D)

Question 18

Which of the following statements about models is correct?

Accepted Answer

A)   The more details a model includes, the better the model.
B)   Models assume away irrelevant details.
C)   Models cannot be used to explain how the economy functions.
D)   Models cannot be used to make predictions.E) None of the above
F) A) and D)

Question 19

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) C) and D)
F) A) and D)

Question 20

"Minimum wage laws result in unemployment" is a normative statement, while "the minimum wage should be higher" is a positive statement.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

A model can be accurately described as a

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An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

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When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

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Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Correct AnswerverifiedCouncil of...View AnswerShow Answer

Figure 2-16 -Refer to Figure 2-16. The graph shown is known as a

Correct AnswerverifiedShow Answer

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

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Figure 2-16 -Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

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Figure 2-23 -Refer to Figure 2-23. Points A, B, and D represent feasible outcomes for this economy.

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Which of the following statements is correct?

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When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

Correct AnswerverifiedShow Answer

The slope of a line that passes through the points 20, 30) and 40, 14) is

Correct AnswerverifiedShow Answer

When economists make positive statements, they are

Correct AnswerverifiedShow Answer

Trade-offs are involved in most policy decisions.

Correct AnswerverifiedShow Answer

"Minimum wage laws result in unemployment" is a normative statement, while "the minimum wage should be higher" is a positive statement.

Correct AnswerverifiedShow Answer

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

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In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

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Which of the following statements about models is correct?

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Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

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Economists sometimes give conflicting advice because

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A circular-flow model and production possibilities frontier are similar in that

Correct AnswerverifiedShow Answer

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