Question 1

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A)   efficiency
B)   opportunity cost
C)   equality
D)   trade-offsE) A) and B)
F) B) and C)

Question 3

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) B) and D)
F) B) and C)

Question 4

Which of the following statements is correct?

Accepted Answer

A)   Few economic models incorporate assumptions.
B)   Different economic models employ different sets of assumptions.
C)   Good economic models attempt to mimic reality as closely as possible.
D)   Economic models, to be accepted, must be tested by conducting experiments.E) A) and C)
F) None of the above

Question 5

The x-coordinate is the

Accepted Answer

A)   first number of an ordered pair and represents the point's horizontal location.
B)   second number of an ordered pair and represents the point's horizontal location.
C)   first number of an ordered pair and represents the point's vertical location.
D)   second number of an ordered pair and represents the point's vertical location.E) A) and D)
F) B) and D)

Question 6

Figure 2-16 
-Refer to Figure 2-16. The graph shown is known as a

Accepted Answer

A)   time-series graph.
B)   bar graph.
C)   scatterplot.
D)   pie chart.E) A) and B)
F) A) and C)

Question 7

Albert Einstein once made the following observation about science:

Accepted Answer

A)   "The whole of science is nothing more than the refinement of everyday thinking."
B)   "The whole of science is nothing more than an interesting intellectual exercise."
C)   "In order to understand science, one must rely solely on abstraction."
D)   "In order to understand science, one must transcend everyday thinking."E) A) and B)
F) A) and C)

Question 8

The decision of which assumptions to make is

Accepted Answer

A)   an easy decision for an economist, but a difficult decision for a physicist or a chemist.
B)   not a particularly important decision for an economist.
C)   usually regarded as an art in scientific thinking.
D)   usually regarded as the easiest part of the scientific method.E) B) and D)
F) A) and B)

Question 9

Economists regard events from the past as

Accepted Answer

A)   irrelevant, since history is unlikely to repeat itself.
B)   of limited interest, since those events seldom provide any useful economic datb.
C)   interesting but not particularly valuable, since those events cannot be used to evaluate present-day economic theories.
D)   interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future.E) A) and B)
F) B) and D)

Question 10

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Accepted Answer

A)   For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics.
B)   Microeconomists study markets for small products, whereas macroeconomists study markets for large products.
C)   Microeconomics and macroeconomics are distinct from one another, yet they are closely related.
D)   Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies.E) A) and B)
F) C) and D)

Question 11

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) A) and C)

Question 12

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 13

When two variables move in the same direction, the curve relating them is

Accepted Answer

A)   upward sloping, and we say the variables are positively related.
B)   upward sloping, and we say the variables are negatively related.
C)   downward sloping, and we say the variables are positively related.
D)   downward sloping, and we say the variables are negatively related.E) C) and D)
F) A) and B)

Question 14

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 15

In the circular-flow diagram, in the markets for

Accepted Answer

A)   goods and services, households and firms are both sellers.
B)   goods and services, households are buyers and firms are sellers.
C)   the factors of production, households are buyers and firms are sellers.
D)   the factors of production, households and firms are both buyers.E) A) and B)
F) A) and D)

Question 16

In the circular-flow diagram, which of the following items does not flow from firms to households?

Accepted Answer

A)   goods
B)   services
C)   capital
D)   profitE) B) and C)
F) A) and B)

Question 17

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 18

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 19

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Accepted Answer

A) True 
 B)False

Question 20

When constructing a production possibilities frontier, which of the following assumptions is not made?

Accepted Answer

A)   The economy produces only two goods or two types of goods.
B)   Firms produce goods using factors of production.
C)   The technology available to firms is given.
D)   The quantities of the factors of production that are available are increasing over the relevant time period.E) B) and D)
F) All of the above

Exam 2: Thinking Like an Economist

Figure 2-16 -Refer to Figure 2-16. The graph shown is known as a

Correct AnswerverifiedShow Answer

Which of the following concepts cannot be illustrated by the production possibilities frontier?

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Just like other scientific models, economic models simplify reality using

Correct AnswerverifiedShow Answer

Economists regard events from the past as

Correct AnswerverifiedShow Answer

The x-coordinate is the

Correct AnswerverifiedShow Answer

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

Correct AnswerverifiedShow Answer

When two variables move in the same direction, the curve relating them is

Correct AnswerverifiedShow Answer

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Correct AnswerverifiedShow Answer

When constructing a production possibilities frontier, which of the following assumptions is not made?

Correct AnswerverifiedShow Answer

In the circular-flow diagram, in the markets for

Correct AnswerverifiedShow Answer

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Correct AnswerverifiedShow Answer

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The scientific method is applicable to studying

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

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The decision of which assumptions to make is

Correct AnswerverifiedShow Answer

Albert Einstein once made the following observation about science:

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items does not flow from firms to households?

Correct AnswerverifiedShow Answer

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