Question 1

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 2

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 3

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) A) and D)
F) B) and D)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Figure 2-17​ 
-Refer to Figure 2-17. It is possible for this economy to produce 1000 shoes.

Accepted Answer

A) True 
 B)False

Question 6

A relatively flat demand curve indicates that

Accepted Answer

A)  quantity demanded will adjust only slightly to a price change.
B)  quantity demanded will adjust significantly to a price change.
C)  quantity demanded will not adjust to a price change.
D)  the change in quantity demanded will exactly equal a change in price.E) A) and C)
F) B) and D)

Question 7

In the circular-flow diagram, which of the following items does not flow from households to firms?

Accepted Answer

A)  revenue
B)  land, labor, and capital
C)  factors of production
D)  profitE) C) and D)
F) A) and B)

Question 8

Figure 2-14 
-Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 9

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. If this economy devotes all of its available resources to producing apples, then it will produce

Accepted Answer

A)  0 bushels of apples and 200 sweaters.
B)  80 bushels of apples and 160 sweaters
C)  180 bushels of apples and 200 sweaters.
D)  180 bushels of apples and 0 sweaters.E) B) and C)
F) A) and B)

Question 10

Figure 2-3 
-Refer to Figure 2-3. What are two elements not included in this figure that could be included in a more complex model?

Accepted Answer

government...

Question 11

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Accepted Answer

A) True 
 B)False

Question 12

Table 2-6 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Accepted Answer

The answer of Table 2-6 
-Refer to Table 2-6. Consider...

Question 13

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

Accepted Answer

A)  wages
B)  land
C)  capital
D)  goods and services soldE) B) and D)
F) B) and C)

Question 14

Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction.

Accepted Answer

A)  The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
B)  The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
C)  Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
D)  Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.E) A) and B)
F) B) and D)

Question 15

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)  the effect of foreign direct investment on economic growth
B)  the effect of a sales tax on the cigarette industry
C)  the effect of an investment tax credit on the economy's capital stock
D)  the effect of a war on government spendingE) A) and B)
F) A) and C)

Question 16

Figure 2-7 
-Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Accepted Answer

A)  N, O, P
B)  L, M
C)  L, M, N, O, P
D)  L, M, QE) B) and C)
F) A) and D)

Question 17

Figure 2-10
Panel (a) 
Panel (b)   
-Refer to Figure 2-10, Panel (a) . The opportunity cost of one sofa is highest when the economy produces

Accepted Answer

A)  0 sofas.
B)  12 sofas.
C)  20 sofas.
D)  24 sofas.E) None of the above
F) A) and D)

Question 18

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

Accepted Answer

A)  Following the most recent recession, the economy is recovering at a slower than usual pace.
B)  To stimulate the economy during the most recent recession, the federal government increased spending.
C)  In response to the most recent recession, the federal government extended the duration of unemployment benefits.
D)  The federal government's responses to the most recent recession were insufficient.E) B) and C)
F) All of the above

Question 19

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 D)
F) A) and C)

Question 20

Figure 2-7 
-Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Accepted Answer

A)  0 engines and 40 tvs.
B)  10 engines and 35 tvs.
C)  40 engines and 0 tvs.
D)  40 engines and 40 tvs.E) All of the above
F) A) and C)

Exam 2: Thinking Like an Economist

Figure 2-14 -Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Correct Answer
verified

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . The opportunity cost of one sofa is highest when the economy produces

Correct Answer
verified

A relatively flat demand curve indicates that

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Figure 2-7 -Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Correct Answer
verified

Figure 2-17 -Refer to Figure 2-17. It is possible for this economy to produce 1000 shoes.

Correct Answer
verified

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

Correct Answer
verified

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

Correct Answer
verified

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. If this economy devotes all of its available resources to producing apples, then it will produce

Correct Answer
verified

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Correct Answer
verified

Correct Answer
verified

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Correct Answer
verified

Figure 2-3 -Refer to Figure 2-3. What are two elements not included in this figure that could be included in a more complex model?

Correct Answer
verified
government...
View Answer

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct Answer
verified

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Correct Answer
verified

In the circular-flow diagram, which of the following items does not flow from households to firms?

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

Historical episodes allow economists to illustrate and evaluate current economic theories.

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

Exam 2: Thinking Like an Economist

Figure 2-14 -Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Correct AnswerverifiedShow Answer

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . The opportunity cost of one sofa is highest when the economy produces

Correct AnswerverifiedShow Answer

A relatively flat demand curve indicates that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Correct AnswerverifiedShow Answer

Figure 2-17​ -Refer to Figure 2-17. It is possible for this economy to produce 1000 shoes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

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. If this economy devotes all of its available resources to producing apples, then it will produce

Correct AnswerverifiedShow Answer

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. What are two elements not included in this figure that could be included in a more complex model?

Correct Answerverifiedgovernment...View AnswerShow Answer

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct AnswerverifiedShow Answer

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items does not flow from households to firms?

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

Historical episodes allow economists to illustrate and evaluate current economic theories.

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 2-17 -Refer to Figure 2-17. It is possible for this economy to produce 1000 shoes.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
government...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified