Question 1

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Accepted Answer

A)   sound logic.
B)   reverse causality.
C)   omitted variables.
D)   bias.E) A) and B)
F) B) and D)

Question 3

Between the two ordered pairs (3, 6)  and (7, 18) , the slope is

Accepted Answer

A)   1/3
B)   -1/3.
C)   3.
D)   -3.E) A) and C)
F) All of the above

Question 4

Policymaking in a representative democracy

Accepted Answer

A)   is straightforward and does not involve any disagreement.
B)   benefits from the input of economists, even if their advice is not always followed.
C)   is conducted without the input of economists.
D)   is always based exclusively on the results of economic analysis.E) B) and C)
F) B) and D)

Question 5

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)   the nation is producing beyond its capacity, so inflation will occur.
B)   the nation is not using all available resources or is using inferior technology or both.
C)   the nation is producing an efficient combination of goods.
D)   there will be a large opportunity cost if the nation tries to increase production of any good.E) A) and B)
F) B) and D)

Question 6

Which of the following statements about the circular-flow diagram is correct?

Accepted Answer

A)   One must imagine that the economy operates without money in order to make sense of the diagram.
B)   The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
C)   The government cannot be excluded as a decision maker in a circular-flow diagram.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 7

In principle, we can

Accepted Answer

A)   ignore positive statements when choosing among various public policy alternatives.
B)   ignore normative statements when choosing among various public policy alternatives.
C)   confirm or refute positive statements by examining evidence.
D)   confirm or refute normative statements by examining evidence.E) None of the above
F) A) and B)

Question 8

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A)   less than 0.
B)   between zero and 1.
C)   between one and infinity.
D)   undefined.E) A) and B)
F) None of the above

Question 9

Which of the following is not correct?

Accepted Answer

A)   The slope of a line will be a small positive number for a fairly flat upward-sloping line.
B)   The slope of a line will be a large positive number for a steep upward-sloping line.
C)   The slope of a line will be a negative number for a downward-sloping line.
D)   The slope of a line will be infinite for a horizontal line.E) None of the above
F) A) and C)

Question 10

Figure 2-23 
-Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Accepted Answer

A) True 
 B)False

Question 11

Economic models

Accepted Answer

A)   are not useful because they omit many real-world details.
B)   are usually composed of diagrams and equations.
C)   are useful because they do not omit any real-world details.
D)   are usually plastic representations of the economy.E) All of the above
F) A) and B)

Question 12

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) B) and C)
F) All of the above

Question 13

In the circular-flow diagram, another name for goods and services produced by firms is

Accepted Answer

A)   factors of production.
B)   output.
C)   inputs.
D)   resources.E) All of the above
F) B) and D)

Question 14

A macroeconomist - as opposed to a microeconomist - might study the effect of

Accepted Answer

A)   changes in the money supply on the inflation rate.
B)   an increase in the gas tax on fuel consumption.
C)   a technological advance on the natural gas industry.
D)   a hurricane on prices in the orange industry.E) A) and B)
F) None of the above

Question 15

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) A) and C)
F) B) and C)

Question 16

Which of the following is correct?

Accepted Answer

A)   A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)   A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)   A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)   A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) A) and B)
F) A) and C)

Question 17

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) All of the above
F) A) and B)

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Correct Answer
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In the circular-flow diagram, another name for goods and services produced by firms is

Correct Answer
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Which of the following is not correct?

Correct Answer
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Between the two ordered pairs (3, 6) and (7, 18) , the slope is

Correct Answer
verified

In principle, we can

Correct Answer
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Which of the following is correct?

Correct Answer
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Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Correct Answer
verified

Which of the following statements about the circular-flow diagram is correct?

Correct Answer
verified

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

Correct Answer
verified

A macroeconomist - as opposed to a microeconomist - might study the effect of

Correct Answer
verified

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

Correct Answer
verified

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Correct Answer
verified

Policymaking in a representative democracy

Correct Answer
verified

Economic models

Correct Answer
verified

Points outside the production possibilities frontier represent infeasible levels of production.

Correct Answer
verified

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Correct Answer
verified

The circular-flow diagram is a

Correct Answer
verified

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. This economy fully employs its resources when it produces 35 dishwashers and zero doghouses.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, another name for goods and services produced by firms is

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Between the two ordered pairs (3, 6) and (7, 18) , the slope is

Correct AnswerverifiedShow Answer

In principle, we can

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Correct AnswerverifiedShow Answer

Which of the following statements about the circular-flow diagram is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A macroeconomist - as opposed to a microeconomist - might study the effect of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Correct AnswerverifiedShow Answer

Policymaking in a representative democracy

Correct AnswerverifiedShow Answer

Economic models

Correct AnswerverifiedShow Answer

Points outside the production possibilities frontier represent infeasible levels of production.

Correct AnswerverifiedShow Answer

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

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