Question 1

The outer loop of the circular-flow diagram represents the flows of dollars in the economy.Which of the following does not appear on the outer loop?

Accepted Answer

A)   Wages
B)   Income
C)   Capital
D)   RentE) B) and C)
F) All of the above

Question 2

The art in scientific thinking is

Accepted Answer

A)   finding the right problem to study.
B)   deciding which assumptions to make.
C)   the ability to make an abstract subject easy to understand.
D)   not something in which economists have to be skilled.E) B) and C)
F) A) and B)

Question 3

Figure 2-14
 
-Refer to Figure 2-14.If this economy uses all its resources in the dishwasher industry,it produces 35 dishwashers and no doghouses.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-1
 
-Refer to Figure 2-1.Which arrow represents the flow of land,labor,and capital?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and C)
F) All of the above

Question 5

An example of a price that changes only infrequently is the price of

Accepted Answer

A)   stocks on the New York Stock Exchange.
B)   crude oil.
C)   residential real estate.
D)   magazines sold at newsstands.E) B) and C)
F) All of the above

Question 6

Figure 2-12
 
-Refer to Figure 2-12.Which of the following statements is true about point B for this economy?

Accepted Answer

A)   Point B is currently unattainable.
B)   Point B is efficient.
C)   At point B, more pillows are produced than blankets.
D)   There is unemployment at point B.E) B) and C)
F) A) and D)

Question 7

Figure 2-14
 
-Refer to Figure 2-14.Points A,B,and D represent feasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 8

On a bowed production possibilities frontier,as you move down along the curve

Accepted Answer

A)   more of one good must be given up to receive one unit of the other good.
B)   the available production technology does not change.
C)   the opportunity cost increases.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 9

Almost all economists agree that local and state governments should

Accepted Answer

A)   eliminate subsidies to professional sports franchises.
B)   increase subsidies to professional sports franchises.
C)   copy economic policy from Washington, D.C.
D)   prevent companies from outsourcing work.E) A) and D)
F) A) and C)

Question 10

Economic models are built with

Accepted Answer

A)   recommendations concerning public policies.
B)   facts about the legal system.
C)   assumptions.
D)   statistical forecasts.E) A) and D)
F) A) and C)

Question 11

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)   households and firms are both buyers.
B)   households and firms are both sellers.
C)   households are buyers and firms are sellers.
D)   households are sellers and firms are buyers.E) A) and B)
F) A) and C)

Question 12

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 13

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 14

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions.Which of the following is not one of those propositions?

Accepted Answer

A)   The United States should not restrict employers from outsourcing work to foreign countries.
B)   The United States should withdraw from the North American Free Trade Agreement (NAFT
A)  .
C)   The United States should eliminate agricultural subsidies.
D)   Local and state governments should eliminate subsidies to professional sports franchises.E) A) and D)
F) All of the above

Question 15

Which of the following allows you to provide information about the relationship between two variables?

Accepted Answer

A)   coordinate system.
B)   pie chart
C)   bar graph
D)   time-series graphE) A) and D)
F) A) and B)

Question 16

Which of the following statements is (are) correct?

Accepted Answer

A)   Relative to some other scientists, economists find it more difficult to conduct experiments.
B)   Theory and observation are important in economics as well as in other sciences.
C)   To obtain data, economists often rely upon the natural experiments offered by history.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 17

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 18

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 19

Suppose price is measured along the vertical axis on a graph.When price changes,there will be a

Accepted Answer

A)   rotation of the curve.
B)   shift of the curve.
C)   movement along the curve.
D)   change in the slope of the curve.E) None of the above
F) C) and D)

Question 20

The decision of which assumptions to make is

Accepted Answer

A)   an easy decision for an economist, but a difficult decision for a physicist or a chemist.
B)   not a particularly important decision for an economist.
C)   usually regarded as an art in scientific thinking.
D)   usually regarded as the easiest part of the scientific method.E) A) and D)
F) B) and C)

Exam 2: Thinking Like an Economist.

Economic models are built with

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Figure 2-14 -Refer to Figure 2-14.Points A,B,and D represent feasible outcomes for this economy.

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A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions.Which of the following is not one of those propositions?

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Figure 2-14 -Refer to Figure 2-14.If this economy uses all its resources in the dishwasher industry,it produces 35 dishwashers and no doghouses.

Correct AnswerverifiedShow Answer

On a bowed production possibilities frontier,as you move down along the curve

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The decision of which assumptions to make is

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Figure 2-12 -Refer to Figure 2-12.Which of the following statements is true about point B for this economy?

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Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of land,labor,and capital?

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Which of the following statements is (are) correct?

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A circular-flow diagram is a visual model of the economy.

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Assumptions can simplify the complex world and make it easier to understand.

Correct AnswerverifiedShow Answer

Almost all economists agree that local and state governments should

Correct AnswerverifiedShow Answer

Suppose price is measured along the vertical axis on a graph.When price changes,there will be a

Correct AnswerverifiedShow Answer

In the markets for goods and services in the circular-flow diagram,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following allows you to provide information about the relationship between two variables?

Correct AnswerverifiedShow Answer

An example of a price that changes only infrequently is the price of

Correct AnswerverifiedShow Answer

The outer loop of the circular-flow diagram represents the flows of dollars in the economy.Which of the following does not appear on the outer loop?

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The art in scientific thinking is

Correct AnswerverifiedShow Answer

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