Question 1

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 2

Figure 2-5 
-Refer to Figure 2-5. It is possible for this economy to produce

Accepted Answer

A)   60 dryers and 50 washers.
B)   60 dryers and 60 washers.
C)   80 dryers and 50 washers.
D)   All of the above.E) B) and C)
F) A) and B)

Question 3

Figure 2-15 
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one sofa is

Accepted Answer

The answer of Figure 2-15 
-Refer to Figure 2-15. Consider...

Question 4

Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

Accepted Answer

The answer of Is the following a positive or normative...

Question 5

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 6

In economics, capital refers to

Accepted Answer

A)   the finances necessary for firms to produce their products.
B)   buildings and machines used in the production process.
C)   the money households use to purchase firms' output.
D)   stocks and bonds.E) None of the above
F) B) and D)

Question 7

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 8

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 9

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-23 
-Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 11

Economic growth causes a production possibilities frontier to shift outward.

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. Describe the shape of the production possibilities frontier.

Accepted Answer

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

Question 13

Figure 2-3 
-Refer to Figure 2-3. What do the ovals represent in the figure?

Accepted Answer

Market for Goods and...

Question 14

The circular-flow diagram is a

Accepted Answer

A)   visual model of the economy.
B)   visual model of the relationships among money, prices, and businesses.
C)   model that shows the effects of government on the economy.
D)   mathematical model of how the economy works.E) None of the above
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) A) and B)
F) B) and D)

Question 16

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)   at which very few excel.
B)   but not as easy as philosophy or the pure sciences.
C)   which very few can enjoy.
D)   which deals primarily with common sense.E) None of the above
F) A) and B)

Question 17

Table 2-5
 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Accepted Answer

A)   200 bushels of wheat
B)   400 bushels of wheat
C)   600 bushels of wheat
D)   800 bushels of wheatE) A) and B)
F) B) and D)

Question 18

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 19

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Accepted Answer

A) True 
 B)False

Question 20

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) A) and C)

Exam 2: Thinking Like an Economist

John Maynard Keynes referred to economics as an easy subject,

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

Correct AnswerverifiedShow Answer

In economics, capital refers to

Correct AnswerverifiedShow Answer

Economic growth causes a production possibilities frontier to shift outward.

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. Describe the shape of the production possibilities frontier.

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. It is possible for this economy to produce

Correct AnswerverifiedShow Answer

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. What do the ovals represent in the figure?

Correct AnswerverifiedMarket for Goods and...View AnswerShow Answer

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Correct AnswerverifiedShow Answer

A duty of economists at the Department of Labor is to

Correct AnswerverifiedShow Answer

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one sofa is

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

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Correct AnswerverifiedShow Answer

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Correct AnswerverifiedShow Answer

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Market for Goods and...
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