Question 1

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

Question 2

In the circular-flow diagram,which of the following is not a factor of production?

Accepted Answer

A)   labor
B)   land
C)   capital
D)   moneyE) C) and D)
F) All of the above

Question 3

Economic models can help us understand reality only when they include all details of the economy.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-4 
-Refer to Figure 2-4.If this economy devotes all of its resources to the production of toothbrushes,then it will produce

Accepted Answer

A)   0 toothbrushes and 40 toasters.
B)   35 toothbrushes and 20 toasters.
C)   70 toothbrushes and 0 toasters.
D)   70 toothbrushes and 40 toasters.E) None of the above
F) B) and C)

Question 5

Which of the following is not correct about most economic models?

Accepted Answer

A)   They are composed of equations and diagrams.
B)   They contribute very little to economists' understanding of the real world.
C)   They omit many features of the real-world economy.
D)   In constructing models,economists make assumptions.E) B) and D)
F) All of the above

Question 6

When an economy is operating inside its production possibilities frontier,we know that

Accepted Answer

A)   there are unused resources or inefficiencies in the economy.
B)   all of the economy's resources are fully employed.
C)   economic growth would have to occur in order for the economy to move to a point on the frontier.
D)   in order to produce more of one good,the economy would have to give up some of the other good.E) A) and D)
F) A) and C)

Question 7

In the circular-flow diagram,households and firms are the decision makers.

Accepted Answer

A) True 
 B)False

Question 8

Sometimes economists disagree because their scientific judgments differ.Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)   One economist believes income tax cuts are unfair to those with low incomes;another economist believes income tax cuts are not unfair to those with low incomes.
B)   One economist believes unemployment causes more human suffering than does inflation;another economist believes inflation causes more human suffering than does unemployment.
C)   One economist believes the policies of the Democratic party offer the best hope for America's future;another economist believes the policies of the Republican party offer the best hope for America's future.
D)   One economist believes increases in the minimum wage increase unemployment;another economist believes increases in the minimum wage do not increase unemployment.E) None of the above
F) All of the above

Question 9

The scientific method is applicable to studying

Accepted Answer

A)   natural sciences,but not social sciences.
B)   social sciences,but not natural sciences.
C)   both natural sciences and social sciences.
D)   None of the above is correct.E) A) and C)
F) C) and D)

Question 10

The second number in any ordered pair is

Accepted Answer

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

Question 11

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 12

A production possibilities frontier shifts outward when

Accepted Answer

A)   the economy experiences economic growth.
B)   the desires of the economy's citizens change.
C)   at least one of the basic principles of economics is violated.
D)   opportunity costs are lessened.E) B) and C)
F) A) and B)

Question 13

The slope of a horizontal line is infinite,and the slope of a vertical line is zero.

Accepted Answer

A) True 
 B)False

Question 14

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)   the respondents were almost equally divided on the propositions.
B)   the respondents favored the propositions by a slight margin.
C)   the respondents disagreed with the propositions by a slight margin.
D)   there was overwhelming endorsement of the propositions among the respondents.E) None of the above
F) C) and D)

Question 15

Figure 2-14 
-Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 16

In the ordered pair (10,30),10 is the y-coordinate and 30 is the z-coordinate.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-3 
-Refer to Figure 2-3.This economy cannot produce at which point(s) ?

Accepted Answer

A)   J
B)   J,L
C)   J,L,M
D)   LE) C) and D)
F) None of the above

Question 18

The goal of an economist who formulates new theories is to

Accepted Answer

A)   provide an interesting framework of analysis,whether or not the framework turns out to be of much use in understanding how the world works.
B)   provoke stimulating debate in scientific journals.
C)   contribute to an understanding of how the world works.
D)   demonstrate that economists,like other scientists,can formulate testable theories.E) B) and D)
F) All of the above

Question 19

Unemployment would cause an economy to

Accepted Answer

A)   produce inside its production possibilities frontier.
B)   produce on its production possibilities frontier.
C)   produce outside its production possibilities frontier.
D)   experience an inward shift of its production possibilities frontier.E) A) and B)
F) B) and D)

Question 20

In the circular-flow diagram,firms produce

Accepted Answer

A)   goods and services using factors of production.
B)   output using inputs.
C)   factors of production using goods and services.
D)   Both (a) and (b) are correct.E) B) and D)
F) None of the above

Exam 2: Thinking Like an Economist

Sometimes economists disagree because their scientific judgments differ.Which of the following instances best reflects this source of disagreement?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,households and firms are the decision makers.

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3.This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

Unemployment would cause an economy to

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Correct AnswerverifiedShow Answer

In the circular-flow diagram,firms produce

Correct AnswerverifiedShow Answer

Economic models can help us understand reality only when they include all details of the economy.

Correct AnswerverifiedShow Answer

The goal of an economist who formulates new theories is to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The slope of a horizontal line is infinite,and the slope of a vertical line is zero.

Correct AnswerverifiedShow Answer

A production possibilities frontier shifts outward when

Correct AnswerverifiedShow Answer

The scientific method is applicable to studying

Correct AnswerverifiedShow Answer

In the circular-flow diagram,which of the following is not a factor of production?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4.If this economy devotes all of its resources to the production of toothbrushes,then it will produce

Correct AnswerverifiedShow Answer

Which of the following is not correct about most economic models?

Correct AnswerverifiedShow Answer

In the ordered pair (10,30),10 is the y-coordinate and 30 is the z-coordinate.

Correct AnswerverifiedShow Answer

When an economy is operating inside its production possibilities frontier,we know that

Correct AnswerverifiedShow Answer

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Correct AnswerverifiedShow Answer

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Correct AnswerverifiedShow Answer

The second number in any ordered pair is

Correct AnswerverifiedShow Answer

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