Question 1

It is possible for an economy to increase its production of both goods if the economy

Accepted Answer

A)   moves downward and to the right along its production possibilities frontier and the frontier is bowed outward.
B)   moves upward and to the left along its production possibilities frontier and the frontier is bowed outward.
C)   moves in either direction along its production possibilities frontier and the frontier is a straight line.
D)   moves from a situation of inefficient production to a situation of efficient production.E) B) and D)
F) C) and D)

Question 2

In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often impractical to

Accepted Answer

A)   make use of theory and observation.
B)   rely upon the scientific method.
C)   conduct laboratory experiments.
D)   find articles or books that were written before 1900.E) None of the above
F) A) and B)

Question 3

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 4

Which of the following statements is correct about the roles of economists?

Accepted Answer

A)   Economists are best viewed as policy advisers.
B)   Economists are best viewed as scientists.
C)   In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists.
D)   In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers.E) A) and C)
F) None of the above

Question 5

Factors of production are

Accepted Answer

A)   used to produce goods and services.
B)   also called output.
C)   abundant in most economies.
D)   assumed to be owned by firms in the circular-flow diagram.E) B) and C)
F) A) and D)

Question 6

The slope of a line that passes through the points 5, 8)  and 12, 12)  is

Accepted Answer

A)   -7/4.
B)   -4/7.
C)   4/7.
D)   7/4.E) A) and B)
F) A) and C)

Question 7

Figure 2-23 
-Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Accepted Answer

A) True 
 B)False

Question 8

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 9

Table 2-5
 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

Accepted Answer

A)   1600 bushels of corn and 300 bushels of wheat
B)   1400 bushels of corn and 800 bushels of wheat
C)   1000 bushels of corn and 2000 bushels of wheat
D)   600 bushels of corn and 1800 bushels of wheatE) A) and D)
F) B) and C)

Question 10

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Accepted Answer

A) True 
 B)False

Question 11

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Accepted Answer

A) True 
 B)False

Question 12

The slope of a steep upward-sloping line will be a

Accepted Answer

A)   small positive number.
B)   large positive number.
C)   small negative number.
D)   large negative number.E) B) and D)
F) A) and B)

Question 13

Figure 2-6 
-Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

Accepted Answer

A)   zero.
B)   50 blankets.
C)   60 pillows.
D)   50 blankets and 60 pillows.E) All of the above
F) C) and D)

Question 14

Figure 2-8 
-Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

Accepted Answer

A)   remains constant.
B)   increases.
C)   decreases.
D)   This answer cannot be determined from the graph.E) A) and C)
F) C) and D)

Question 15

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

Accepted Answer

A)   The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)   The US income tax rate increases with the amount of income earned.
C)   The government should increase the tax on gasoline.
D)   The US unemployment rate increased to 10 percent in 2009.E) All of the above
F) B) and C)

Question 16

When economists are trying to explain the world, they are

Accepted Answer

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

Question 17

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not correct?

Accepted Answer

A)   Economists use some familiar words in specialized ways.
B)   Economics has its own language and its own way of thinking, but few other fields of study do.
C)   Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language.
D)   The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.E) C) and D)
F) None of the above

Question 20

Table 2-5
 
-Indiadesh is a country that produces two goods, textiles and computers. Last year, Indiadesh produced 50,000 textiles and 1300 computers. This year it produced 45,000 textiles and 1100 computers. Given no further information, which of the following events could explain this change?

Accepted Answer

A)   Indiadesh decreased unemployment.
B)   Indiadesh experienced an improvement in textile-making technology.
C)   Indiadesh experienced an improvement in computer-making technology.
D)   Indiadesh experienced a reduction in resources.E) None of the above
F) B) and C)

Exam 2: Thinking Like an Economist

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

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When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

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When economists are trying to explain the world, they are

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In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often impractical to

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The slope of a steep upward-sloping line will be a

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Which of the following is not correct?

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

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It is possible for an economy to increase its production of both goods if the economy

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Figure 2-23 -Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

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Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

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Table 2-5 -Indiadesh is a country that produces two goods, textiles and computers. Last year, Indiadesh produced 50,000 textiles and 1300 computers. This year it produced 45,000 textiles and 1100 computers. Given no further information, which of the following events could explain this change?

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

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Figure 2-8 -Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

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The slope of a line that passes through the points 5, 8) and 12, 12) is

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Which of the following statements is correct about the roles of economists?

Correct AnswerverifiedShow Answer

Factors of production are

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Macroeconomics is the study of economy-wide phenomena.

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Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

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

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Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

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