Question 1

A demand curve shows the relationship between price and

Accepted Answer

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

Question 2

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 3

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)   opinions and education.
B)   opinions and values.
C)   scientific judgments and education.
D)   scientific judgments and values.E) A) and B)
F) B) and C)

Question 4

In the simple circular-flow diagram,the participants in the economy are

Accepted Answer

A)   firms and government.
B)   households and firms.
C)   households and government.
D)   households, firms, and government.E) A) and C)
F) A) and D)

Question 5

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 6

A duty of economists at the Department of Labor is to

Accepted Answer

A)   analyze data on workers.
B)   schedule federal holidays.
C)   enforce the nation's antitrust laws.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 7

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) None of the above
F) A) and B)

Question 8

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 9

The first number in any ordered pair is

Accepted Answer

A)   the x-coordinate.
B)   the y-coordinate.
C)   the vertical location of the point.
D)   the slope.E) A) and B)
F) None of the above

Question 10

Which markets are represented in the simple circular-flow diagram?

Accepted Answer

A)   markets for goods and services and markets for financial assets
B)   markets for factors of production and markets for financial assets
C)   markets for goods and services and markets for factors of production
D)   markets for goods and services and markets for imports and exportsE) A) and B)
F) None of the above

Question 11

In the early 19th century,the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic.The villagers noticed that wherever doctors appeared,people died.Therefore,many doctors were chased away from villages,and some were even killed.This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A)   omitted variables.
B)   reverse causality.
C)   government propaganda.
D)   medical incompetence.E) B) and C)
F) All of the above

Question 12

Economists usually have to make do with whatever data the world happens to give them.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)   Inflation is more harmful to the economy than unemployment is.
B)   If welfare payments increase, the world will be a better place.
C)   Prices rise when the government prints too much money.
D)   When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.E) None of the above
F) All of the above

Question 14

Positive statements are

Accepted Answer

A)   prescriptive.
B)   claims about how the world should be.
C)   claims about how the world is.
D)   made by economists speaking as policy advisers.E) B) and C)
F) A) and D)

Question 15

In the circular-flow diagram,

Accepted Answer

A)   firms are buyers in the markets for goods and services.
B)   households are sellers in the markets for the factors of production.
C)   firms are sellers in the markets for factors of production and in the markets for goods and services.
D)   dollars that are spent on goods and services flow directly from firms to households.E) B) and C)
F) A) and D)

Question 16

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) B) and C)
F) None of the above

Question 17

In addition to advising the president,one duty of the Council of Economic Advisors is to

Accepted Answer

A)   prepare the federal budget.
B)   write government regulations.
C)   advise Congress on economic matters.
D)   write the annual Economic Report of the President.E) B) and C)
F) A) and B)

Question 18

Production possibilities frontiers are usually bowed outward.This is because

Accepted Answer

A)   the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
B)   it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced.
C)   of the effects of technological change.
D)   resources are specialized; that is, some are better at producing particular goods rather than other goods.E) All of the above
F) A) and B)

Question 19

Figure 2-12
 
-Refer to Figure 2-12.One difference between points A and B is that

Accepted Answer

A)   Point B is unattainable with current resources, but point A is attainable.
B)   All resources are fully employed at point A but there is unemployment at point B.
C)   More output can be produced at point A but no additional output can be produced at point B.
D)   This economy produces more blankets at point B than at point A.E) A) and B)
F) B) and D)

Question 20

Figure 2-8

-Refer to Figure 2-8,Panel (a) .The movement from point M to point K could be caused by

Accepted Answer

A)   an advance in production technology.
B)   an improvement in efficiency.
C)   economic growth.
D)   unemployment.E) A) and D)
F) B) and C)

Exam 2: Thinking Like an Economist.

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct Answer
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The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Correct Answer
verified

Correct Answer
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Production possibilities frontiers are usually bowed outward.This is because

Correct Answer
verified

A duty of economists at the Department of Labor is to

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
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The first number in any ordered pair is

Correct Answer
verified

Figure 2-12 -Refer to Figure 2-12.One difference between points A and B is that

Correct Answer
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Figure 2-8 -Refer to Figure 2-8,Panel (a) .The movement from point M to point K could be caused by

Correct Answer
verified

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

Correct Answer
verified

In addition to advising the president,one duty of the Council of Economic Advisors is to

Correct Answer
verified

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?

Correct Answer
verified

Economists usually have to make do with whatever data the world happens to give them.

Correct Answer
verified

Which markets are represented in the simple circular-flow diagram?

Correct Answer
verified

In the simple circular-flow diagram,the participants in the economy are

Correct Answer
verified

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

Correct Answer
verified

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

Correct Answer
verified

Positive statements are

Correct Answer
verified

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct Answer
verified

A demand curve shows the relationship between price and

Correct Answer
verified

Exam 2: Thinking Like an Economist.

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct AnswerverifiedShow Answer

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Production possibilities frontiers are usually bowed outward.This is because

Correct AnswerverifiedShow Answer

A duty of economists at the Department of Labor is to

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

The first number in any ordered pair is

Correct AnswerverifiedShow Answer

Figure 2-12 -Refer to Figure 2-12.One difference between points A and B is that

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8,Panel (a) .The movement from point M to point K could be caused by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In addition to advising the president,one duty of the Council of Economic Advisors is to

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Economists usually have to make do with whatever data the world happens to give them.

Correct AnswerverifiedShow Answer

Which markets are represented in the simple circular-flow diagram?

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram,the participants in the economy are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

Correct AnswerverifiedShow Answer

Positive statements are

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between price and

Correct AnswerverifiedShow Answer

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