Question 1

Almost all economists agree that local and state governments should

Accepted Answer

A)   eliminate subsidies to professional sports franchises.
B)   increase subsidies to professional sports franchises.
C)   copy economic policy from Washington, D.C.
D)   prevent companies from outsourcing work.E) A) and D)
F) B) and C)

Question 2

Use the following Figure to answer the question :  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) None of the above
F) B) and D)

Question 3

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)   a landowner leases land to a farmer
B)   a farmer hires a teenager to help with harvest
C)   a construction company rents trucks for its business
D)   a woman buys corn for dinnerE) A) and B)
F) A) and C)

Question 4

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 5

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Accepted Answer

A)   the effect of an increase in the alcohol tax on the market for beer
B)   the effect of foreign competition on the domestic auto industry
C)   the effect of a price war in the airline industry
D)   the effect of an increase in the minimum wage on an economy's overall rate of unemploymentE) C) and D)
F) B) and C)

Question 7

Use the following Figure to answer the question : Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters, apples in bushels) , or a combination of the two.
-Refer to Figure 2-14. The opportunity cost of moving from point U to point R is

Accepted Answer

A)   60 bushels of apples.
B)   80 bushels of apples.
C)   80 sweaters.
D)   160 sweaters.E) A) and C)
F) A) and B)

Question 8

Economists work both inside and outside the administrative branch of the U.S. government.

Accepted Answer

A) True 
 B)False

Question 9

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Accepted Answer

The answer of When economists are trying to explain the...

Question 10

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Accepted Answer

A) True 
 B)False

Question 11

Use the following Figure to answer the question Figure:2-3 
-Refer to Figure 2-3. Which shape refers to the markets for goods and services?

Accepted Answer

A)   oval A
B)   oval B
C)   rectangle 1
D)   rectangle 2E) C) and D)
F) A) and B)

Question 12

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

Question 13

In the ordered pair 10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not correct?

Accepted Answer

A)   The slope of a line will be a small positive number for a fairly flat upward-sloping line.
B)   The slope of a line will be a large positive number for a steep upward-sloping line.
C)   The slope of a line will be a negative number for a downward-sloping line.
D)   The slope of a line will be infinite for a horizontal line.E) B) and C)
F) C) and D)

Question 15

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A)   A country produces only two goods or types of goods.
B)   Technology does not change.
C)   The amount of available resources does not change.
D)   There is a fixed quantity of money.E) All of the above
F) B) and D)

Question 16

The production possibilities frontier illustrates

Accepted Answer

A)   the trade-off between efficiency and equality.
B)   the combination of output that an economy should produce.
C)   the combination of output that each member of society should consume.
D)   None of the above is correct.E) B) and C)
F) B) and D)

Question 17

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)   would likely be made by an economist acting as a policy advisor.
B)   would require values and data to be evaluated.
C)   would require data but not values to be evaluated.
D)   could not be evaluated by economists acting as scientists.E) A) and B)
F) A) and C)

Question 18

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) B) and C)
F) None of the above

Question 19

Almost all economists agree that tariffs and import quotas

Accepted Answer

A)   reduces general economic welfare.
B)   increases general economic welfare.
C)   have no effect on general economic welfare.
D)   stimulate a less than fully employed economy.E) A) and D)
F) A) and C)

Question 20

The x-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) A) and B)
F) A) and D)

Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . Production is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question Figure:2-3 -Refer to Figure 2-3. Which shape refers to the markets for goods and services?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Correct AnswerverifiedShow Answer

The x-coordinate of an ordered pair specifies the

Correct AnswerverifiedShow Answer

Almost all economists agree that local and state governments should

Correct AnswerverifiedShow Answer

A pie chart is a way to display information regarding two variables.

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

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct AnswerverifiedShow Answer

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples in bushels) , or a combination of the two. -Refer to Figure 2-14. The opportunity cost of moving from point U to point R is

Correct AnswerverifiedShow Answer

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Correct AnswerverifiedShow Answer

The production possibilities frontier illustrates

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists work both inside and outside the administrative branch of the U.S. government.

Correct AnswerverifiedShow Answer

Almost all economists agree that tariffs and import quotas

Correct AnswerverifiedShow Answer

In the ordered pair 10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Correct AnswerverifiedShow Answer

Which of the following is not an assumption of the productions possibilities frontier?

Correct AnswerverifiedShow Answer

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