Question 1

In the ordered pair (17,75) ,17 is the

Accepted Answer

A)   vertical location of the point.
B)   the slope.
C)   the x-coordinate.
D)   the y-coordinate.E) A) and C)
F) C) and D)

Question 2

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)   is useless,since the real world has many countries trading many goods.
B)   can be useful only in situations involving two countries and two goods.
C)   can be useful in the classroom,but is useless in the real world.
D)   can be useful in helping economists understand the complex world of international trade involving many countries and many goods.E) B) and C)
F) A) and D)

Question 3

Figure 2-8
Panel (a) Panel (b)   
-Refer to Figure 2-8,Panel (a) .In order to gain 2 donuts by moving from point L to point M,society must sacrifice

Accepted Answer

A)   efficiency.
B)   employment.
C)   4 cups of coffee.
D)   More than one of the above is correct.E) C) and D)
F) B) and C)

Question 4

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

Accepted Answer

A)   The price of gasoline came down sharply during the second half of 2006.
B)   If the government were to set a maximum legal price on gasoline,then there would be a shortage of gasoline.
C)   Income taxes should be reduced.
D)   The federal government obtains much of its revenue from income taxes.E) A) and B)
F) A) and C)

Question 5

Economists speaking like policy advisers make

Accepted Answer

A)   claims about how the world is.
B)   descriptive statements.
C)   normative statements.
D)   More than one of the above is correct.E) B) and C)
F) C) and D)

Question 6

Figure 2-9
Panel (a) Panel (b)   
-Refer to Figure 2-9,Panel (a) .Production at point R is

Accepted Answer

A)   impossible and inefficient.
B)   impossible but efficient.
C)   possible but inefficient.
D)   possible and efficient.E) None of the above
F) B) and C)

Question 7

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A)   all resources are scarce.
B)   economic growth is always occurring.
C)   the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.
D)   the only way to get more of one good is to get less of the other.E) A) and B)
F) B) and D)

Question 8

The circular-flow diagram explains,in general terms,how the economy is organized and how participants in the economy interact with one another.

Accepted Answer

A) True 
 B)False

Question 9

Figure 2-13 
-Refer to Figure 2-13.The movement from point B to point C could have been caused by

Accepted Answer

A)   inflation.
B)   a change in income.
C)   a change in the price of roses.
D)   a change in the cost of producing roses.E) C) and D)
F) None of the above

Question 10

The following table contains some production possibilities for an economy for a given year:

If the production possibilities frontier is bowed outward,then "?" could be

Accepted Answer

A)   340.
B)   330.
C)   320.
D)   310.E) A) and C)
F) B) and C)

Question 11

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 D)

Question 12

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 A
B)   point B
C)   point C
D)   point DE) B) and C)
F) A) and D)

Question 13

Normative statements are not

Accepted Answer

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

Question 14

Figure 2-9
Panel (a) Panel (b)   
-Refer to Figure 2-9,Panel (a) .The opportunity cost of one television is highest when the economy produces

Accepted Answer

A)   0 televisions.
B)   6 televisions.
C)   10 televisions.
D)   12 televisions.E) A) and B)
F) A) and C)

Question 15

Economists at the Department of the Treasury

Accepted Answer

A)   design U.S.currency and coins.
B)   provide Congress with the annual budget.
C)   enforce the U.S.antitrust laws.
D)   provide advice on tax policy to the President.E) A) and C)
F) A) and B)

Question 16

Table 2-1
Production Possibilities for Toyland
 
-Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

Accepted Answer

A)   100 fire trucks
B)   150 fire trucks
C)   200 fire trucks
D)   350 fire trucksE) A) and B)
F) All of the above

Question 17

Because it is difficult for economists to use experiments to generate data,they generally must

Accepted Answer

A)   do without data.
B)   substitute assumptions for data when data are unavailable.
C)   rely upon hypothetical data that were previously concocted by other economists.
D)   use whatever data the world gives them.E) A) and C)
F) A) and D)

Question 18

Economists face an obstacle that many other scientists do not face.What is that obstacle?

Accepted Answer

A)   It is often difficult to formulate theories in economics.
B)   It is often difficult and sometimes impossible to perform experiments in economics.
C)   Economics cannot be addressed objectively;it must be addressed subjectively.
D)   The scientific method cannot be applied to the study of economics.E) C) and D)
F) All of the above

Question 19

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 20

How did the influential economist John Maynard Keynes explain his remark that although economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

Accepted Answer

A)   Most people who study economics are not very bright.
B)   Good economists must possess a rare combination of gifts.
C)   Economics is quite boring;hence,people tend to lose interest in it before mastering it.
D)   Good thinkers become frustrated with economics because it does not make use of the scientific method.E) None of the above
F) All of the above

Exam 2: Thinking Like an Economist

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9,Panel (a) .Production at point R is

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Figure 2-8 Panel (a) Panel (b) -Refer to Figure 2-8,Panel (a) .In order to gain 2 donuts by moving from point L to point M,society must sacrifice

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Figure 2-13 -Refer to Figure 2-13.The movement from point B to point C could have been caused by

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Economists face an obstacle that many other scientists do not face.What is that obstacle?

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An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

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Economists at the Department of the Treasury

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In the ordered pair (17,75) ,17 is the

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The bowed shape of the production possibilities frontier can be explained by the fact that

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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?

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How did the influential economist John Maynard Keynes explain his remark that although economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

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Normative statements are not

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

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The circular-flow diagram explains,in general terms,how the economy is organized and how participants in the economy interact with one another.

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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9,Panel (a) .The opportunity cost of one television is highest when the economy produces

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Because it is difficult for economists to use experiments to generate data,they generally must

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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.

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The following table contains some production possibilities for an economy for a given year: If the production possibilities frontier is bowed outward,then "?" could be

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Economists speaking like policy advisers make

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Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

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

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