Question 1

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A)   enforce the nation's antitrust laws.
B)   set the nation's monetary policy.
C)   provide evidence that incumbent members of Congress are performing well in their jobs.
D)   provide independent evaluations of policy proposals.E) C) and D)
F) None of the above

Question 2

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. The slope of the line containing points A and B is

Accepted Answer

A)   -1/2.
B)   -2.
C)   1/2.
D)   2.E) A) and C)
F) A) and D)

Question 4

Figure 2-5 
-Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Accepted Answer

A)   0 washers.
B)   20 washers.
C)   40 washers.
D)   None of the above; the economy cannot move from point D to point C.E) None of the above
F) A) and D)

Question 5

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-4 
-Refer to Figure 2-4. This economy cannot produce at which points) ?

Accepted Answer

A)   Q
B)   Q, S
C)   Q, S, T
D)   SE) All of the above
F) B) and C)

Question 7

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-19
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 2-19. Which of the following conclusions should not be drawn from observing this graph?

Accepted Answer

A)   There is a positive correlation between the frequency of service and the number of passengers.
B)   When there are 5 stops per hour, there are approximately 200 passengers.
C)   More stops per hour is associated with more passengers per hour.
D)   No other factors besides the frequency of service affect the number of passengers.E) A) and B)
F) B) and C)

Question 9

Figure 2-13 
-Refer to Figure 2-13. One difference between points F and G is that

Accepted Answer

A)   Point G is unattainable with current resources, but point F is attainable.
B)   All resources are fully employed at point F but there is unemployment at point G.
C)   More output can be produced at point F but no additional output can be produced at point G.
D)   This economy produces more cookies at point G than at point F.E) B) and C)
F) A) and D)

Question 10

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

Question 11

Figure 2-11 
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A)   simultaneous technological advances in the book and DVD industries.
B)   a reallocation of resources away from the production of DVDs and toward the production of books.
C)   economic growth.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 12

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 13

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Accepted Answer

The answer of Suppose a war in the Middle East...

Question 14

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 15

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Accepted Answer

A)   economists have not yet convinced the general public that the policies are undesirable.
B)   economists engage in positive analysis, not normative analysis.
C)   economists have values that are different from the values of most non-economists.
D)   economists' theories are not easily confirmed or refuted in laboratory analysis.E) A) and B)
F) A) and C)

Question 16

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. What is the opportunity cost of moving from point T to point R?

Accepted Answer

The answer of Figure 2-14  Consider the production possibilities...

Question 17

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Accepted Answer

A)   sound logic.
B)   reverse causality.
C)   omitted variables.
D)   bias.E) A) and B)
F) All of the above

Question 18

Which of these terms are used interchangeably?

Accepted Answer

A)   "goods and services" and "inputs"
B)   "goods and services" and "factors of production"
C)   "inputs" and "factors of production"
D)   "land, labor, and capital" and "goods and services"E) All of the above
F) A) and D)

Question 19

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) B) and D)
F) All of the above

Question 20

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)   at which very few excel.
B)   but not as easy as philosophy or the pure sciences.
C)   which very few can enjoy.
D)   which deals primarily with common sense.E) C) and D)
F) B) and D)

Exam 2: Thinking Like an Economist

Figure 2-13 -Refer to Figure 2-13. One difference between points F and G is that

Correct Answer
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Which of these terms are used interchangeably?

Correct Answer
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Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Correct Answer
verified

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. What is the opportunity cost of moving from point T to point R?

Correct Answer
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Congress relies on economists at the Congressional Budget Office to

Correct Answer
verified

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Correct Answer
verified

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which points) ?

Correct Answer
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The President counts among his economic advisors the Congressional Budget Office.

Correct Answer
verified

Correct Answer
verified

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Correct Answer
verified

The scientific method can be applied to the study of economics.

Correct Answer
verified

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Correct Answer
verified

Economists believe that production possibilities frontiers rarely have a bowed shape.

Correct Answer
verified

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

Correct Answer
verified

Albert Einstein once made the following observation about science:

Correct Answer
verified

John Maynard Keynes referred to economics as an easy subject,

Correct Answer
verified

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points A and B is

Correct Answer
verified

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Correct Answer
verified

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct Answer
verified

Exam 2: Thinking Like an Economist

Figure 2-13 -Refer to Figure 2-13. One difference between points F and G is that

Correct AnswerverifiedShow Answer

Which of these terms are used interchangeably?

Correct AnswerverifiedShow Answer

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Correct AnswerverifiedShow Answer

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. What is the opportunity cost of moving from point T to point R?

Correct AnswerverifiedShow Answer

Congress relies on economists at the Congressional Budget Office to

Correct AnswerverifiedShow Answer

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which points) ?

Correct AnswerverifiedShow Answer

The President counts among his economic advisors the Congressional Budget Office.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of

Correct AnswerverifiedShow Answer

The scientific method can be applied to the study of economics.

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Correct AnswerverifiedShow Answer

Economists believe that production possibilities frontiers rarely have a bowed shape.

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

Albert Einstein once made the following observation about science:

Correct AnswerverifiedShow Answer

John Maynard Keynes referred to economics as an easy subject,

Correct AnswerverifiedShow Answer

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points A and B is

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Correct AnswerverifiedShow Answer

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct AnswerverifiedShow Answer

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