Question 1

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

The answer of Figure 2-3 
-Refer to Figure 2-3. What...

Question 3

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 4

The President receives economic policy advice from economists at each of the following except

Accepted Answer

A)   the Council of Economic Advisors.
B)   the Department of the Treasury.
C)   the Congressional Budget office.
D)   the Department of Labor.E) A) and B)
F) A) and C)

Question 5

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

Accepted Answer

A)   The discount rate is the interest rate the Federal Reserve charges banks to borrow funds.
B)   The US income tax rate increases with the amount of income earned.
C)   The government should increase the tax on gasoline.
D)   The US unemployment rate increased to 10 percent in 2009.E) None of the above
F) B) and C)

Question 6

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

Accepted Answer

A)   possible at points J, K, L, and M, but efficient only at points J, L, and M.
B)   possible at points J, K, L, and M, but efficient only at point K.
C)   possible at points J, L, M, and N, but efficient only at points J, L, and M.
D)   possible at points J, L, M, and N, but efficient only at point N.E) C) and D)
F) A) and D)

Question 7

The slope of a line is equal to

Accepted Answer

A)   rise divided by run.
B)   run divided by rise.
C)   rise minus run.
D)   rise plus run.E) A) and C)
F) None of the above

Question 8

In the simple circular-flow diagram,

Accepted Answer

A)   households own the factors of production.
B)   households buy all the goods and services that firms produce.
C)   land, labor, and capital flow from households to firms.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 9

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)   opinions and education.
B)   opinions and values.
C)   scientific judgments and education.
D)   scientific judgments and values.E) A) and B)
F) A) and C)

Question 10

Figure 2-4 
-Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

Accepted Answer

A)   R
B)   S
C)   T
D)   UE) B) and D)
F) All of the above D

Question 11

Figure 2-7 
-Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Accepted Answer

A)   N, O, P
B)   L, M
C)   L, M, N, O, P
D)   L, M, QE) B) and C)
F) All of the above

Question 12

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

Accepted Answer

A)   This month, the economy reduced the unemployment of its resources.
B)   This month, the economy experienced an improvement in technology.
C)   This month, the economy experienced an increase in resources
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 13

Figure 2-4 
-Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

A)   Q, S
B)   Q, S, T
C)   R, U
D)   TE) B) and D)
F) A) and B)

Question 14

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Accepted Answer

A) True 
 B)False

Question 15

Economists believe that production possibilities frontiers are often bowed because

Accepted Answer

A)   trade-offs inevitably create unemployment.
B)   resources are not completely adaptable.
C)   opportunity costs are constant.
D)   of improvements in technology.E) B) and C)
F) A) and D)

Question 16

"Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars" is an example of a

Accepted Answer

A)   normative economic statement.
B)   positive economic statement.
C)   statement made by an economist working as a scientist.
D)   judgment based on evaluation of evidence, not values.E) All of the above
F) A) and B) A

Question 17

In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A)   omitted variables.
B)   reverse causality.
C)   government propaganda.
D)   medical incompetence.E) B) and C)
F) None of the above B

Question 18

Among economic models, the circular-flow diagram is unusual in that it

Accepted Answer

A)   drastically simplifies the real world.
B)   features more than one type of market.
C)   features flows of dollars.
D)   does not involve mathematics.E) A) and D)
F) C) and D)

Question 19

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Accepted Answer

A)   Collect and analyze data.
B)   Go to a laboratory and generate data to test the theory.
C)   Publish the theory without testing it.
D)   Consult with other economists to see they agree with the theory.E) B) and D)
F) None of the above

Question 20

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

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

Exam 2: Thinking Like an Economist

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Correct Answer
verified

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

Correct Answer
verified

Macroeconomics is the study of economy-wide phenomena.

Correct Answer
verified

The President receives economic policy advice from economists at each of the following except

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The slope of a line is equal to

Correct Answer
verified

In the simple circular-flow diagram,

Correct Answer
verified

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

Correct Answer
verified
D

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Correct Answer
verified

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct Answer
verified

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Correct Answer
verified

Economists believe that production possibilities frontiers are often bowed because

Correct Answer
verified

"Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars" is an example of a

Correct Answer
verified
A

Correct Answer
verified
B

Among economic models, the circular-flow diagram is unusual in that it

Correct Answer
verified

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Correct Answer
verified

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Correct Answer
verified

Exam 2: Thinking Like an Economist

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Macroeconomics is the study of economy-wide phenomena.

Correct AnswerverifiedShow Answer

The President receives economic policy advice from economists at each of the following except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The slope of a line is equal to

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram,

Correct AnswerverifiedShow Answer

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

Correct AnswerverifiedD

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Correct AnswerverifiedShow Answer

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct AnswerverifiedShow Answer

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Correct AnswerverifiedShow Answer

Economists believe that production possibilities frontiers are often bowed because

Correct AnswerverifiedShow Answer

"Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars" is an example of a

Correct AnswerverifiedA

Correct AnswerverifiedB

Among economic models, the circular-flow diagram is unusual in that it

Correct AnswerverifiedShow Answer

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Correct AnswerverifiedShow Answer

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D

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A

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B

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