Question 1

Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Accepted Answer

A)   the government destroys the failing markets that caused an economic crisis.
B)   innovation and enterpreneurial initiative have great power to drive economic growth.
C)   economists destroy long-held beliefs about how markets function.
D)   free markets need government intervention to create economic growth.E) None of the above
F) A) and D)

Question 2

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 3

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-14 
-Refer to Figure 2-14.The opportunity cost of moving from point A to point D is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 5

A relatively steep demand curve indicates that

Accepted Answer

A)   quantity demanded will adjust only slightly to a price change.
B)   quantity demanded will adjust significantly to a price change.
C)   quantity demanded will not adjust to a price change.
D)   the change in quantity demanded will exactly equal a change in price.E) A) and C)
F) All of the above

Question 6

Which of the following statements applies to economics,as well as to other sciences such as physics?

Accepted Answer

A)   Experiments are considered valid only when they are conducted in a laboratory.
B)   Good theories do not need to be tested.
C)   Real-world observations often lead to theories.
D)   Economics,as well as other sciences,is concerned primarily with abstract concepts.E) A) and D)
F) A) and C)

Question 7

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-4 
-Refer to Figure 2-4.This economy cannot currently produce 30 notepads and 45 lamps because

Accepted Answer

A)   some of its resources are unemployed.
B)   inefficiencies exist in this economy's production process.
C)   given its current technology,it does not have the resources to produce that level of output.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 9

Economists have helped modify the debate over the environment

Accepted Answer

A)   by pointing out that nature is invaluable.
B)   by focusing discussion on issues of resource allocation.
C)   by lobbying Congress for acid rain legislation.
D)   by arguing against tradeable permits for pollution.E) A) and B)
F) None of the above

Question 10

Figure 2-8
 
-Refer to Figure 2-8,Panel (a) .The opportunity cost of one cup of coffee is highest when the economy produces

Accepted Answer

A)   0 cups of coffee.
B)   2 cups of coffee.
C)   4 cups of coffee.
D)   6 cups of coffee.E) C) and D)
F) None of the above

Question 11

Normative statements are

Accepted Answer

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

Question 12

Figure 2-16
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service 
-Refer to Figure 2-16.A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars.You warn the policymaker about making a reverse causality mistake with which of the following statements?

Accepted Answer

A)   Higher gas prices are causing more people to choose the commuter rail over driving.
B)   The service frequency was increased in response to an increase in the number of passengers per hour.
C)   There is a positive relationship between frequency of stops and number of passengers.
D)   None of the above is correct.E) A) and B)
F) C) and D)

Question 13

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)   a controlled experiment that lead to the formulation of a scientific theory.
B)   being in the right place at the right time.
C)   an idea whose time had come.
D)   the interplay between observation and theory in science.E) B) and C)
F) None of the above

Question 14

The inner loop of the circular-flow diagram represents the flows of inputs and outputs.Which of the following does not appear on the inner loop?

Accepted Answer

A)   Wages
B)   Land
C)   Capital
D)   Goods and services soldE) None of the above
F) All of the above

Question 15

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Accepted Answer

A)   amount of the other good that must be given up.
B)   market price of the additional amount produced.
C)   amount of resources that must be devoted to its production.
D)   number of dollars that must be spent to produce it.E) A) and B)
F) A) and C)

Question 16

Figure 2-14 
-Refer to Figure 2-14.Points A,B,and D represent feasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 17

When two variables have a positive correlation,

Accepted Answer

A)   when the x-variable increases,the y-variable decreases.
B)   when the x-variable decreases,the y-variable increases.
C)   when the x-variable increases,the y-variable increases.
D)   More than one of the above is correct.E) A) and B)
F) All of the above

Question 18

Which of the following is not correct?

Accepted Answer

A)   When developing economic theories,graphs offer a way to visually express ideas that might be less clear if described with equations or words.
B)   Graphs are one way of expressing the relationships among variables.
C)   When studying the relationship between two economic variables,graphs allow economists to draw indisputable conclusions about causes and effects.
D)   When analyzing economic data,graphs provide a powerful way of finding and interpreting patterns.E) A) and C)
F) B) and C)

Question 19

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Accepted Answer

A) True 
 B)False

Question 20

Figure 2-5 
-Refer to Figure 2-5.If this economy moves from point A to point B,then which of the following statements is correct?

Accepted Answer

A)   This economy has moved from a point of inefficient production to a point of efficient production.
B)   This economy has experienced economic growth.
C)   This economy has experienced an increase in employment.
D)   None of the above is correct.E) All of the above
F) B) and C)

Exam 2: Thinking Like an Economist

Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Correct Answer
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Which of the following is not correct?

Correct Answer
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The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Correct Answer
verified

Which of the following statements applies to economics,as well as to other sciences such as physics?

Correct Answer
verified

Economists have helped modify the debate over the environment

Correct Answer
verified

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 Answer
verified

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14.Points A,B,and D represent feasible outcomes for this economy.

Correct Answer
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Figure 2-5 -Refer to Figure 2-5.If this economy moves from point A to point B,then which of the following statements is correct?

Correct Answer
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Figure 2-8 -Refer to Figure 2-8,Panel (a) .The opportunity cost of one cup of coffee is highest when the economy produces

Correct Answer
verified

A relatively steep demand curve indicates that

Correct Answer
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The inner loop of the circular-flow diagram represents the flows of inputs and outputs.Which of the following does not appear on the inner loop?

Correct Answer
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Figure 2-4 -Refer to Figure 2-4.This economy cannot currently produce 30 notepads and 45 lamps because

Correct Answer
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Normative statements are

Correct Answer
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Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct Answer
verified

Correct Answer
verified

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Correct Answer
verified

When two variables have a positive correlation,

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point A to point D is 10 dishwashers.

Correct Answer
verified

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Correct Answer
verified

Exam 2: Thinking Like an Economist

Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Correct AnswerverifiedShow Answer

Which of the following statements applies to economics,as well as to other sciences such as physics?

Correct AnswerverifiedShow Answer

Economists have helped modify the debate over the environment

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

If a major union goes on strike,then the country would be operating inside its production possibilities frontier.

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.Points A,B,and D represent feasible outcomes for this economy.

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5.If this economy moves from point A to point B,then which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8,Panel (a) .The opportunity cost of one cup of coffee is highest when the economy produces

Correct AnswerverifiedShow Answer

A relatively steep demand curve indicates that

Correct AnswerverifiedShow Answer

The inner loop of the circular-flow diagram represents the flows of inputs and outputs.Which of the following does not appear on the inner loop?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4.This economy cannot currently produce 30 notepads and 45 lamps because

Correct AnswerverifiedShow Answer

Normative statements are

Correct AnswerverifiedShow Answer

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point A to point D is 10 dishwashers.

Correct AnswerverifiedShow Answer

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Correct AnswerverifiedShow Answer

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