Question 1

Different values are not a reason for disagreement among economists.

Accepted Answer

A) True 
 B)False

Question 2

Alfonso has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Mary has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction.

Accepted Answer

A)   The reasoning of both Alfonso and Mary suffers from the omitted variable problem.
B)   The reasoning of both Alfonso and Mary suffers from the reverse causality problem.
C)   Alfonso's reasoning suffers from the reverse causality problem, and Mary's reasoning suffers from the omitted variable problem.
D)   Mary's reasoning suffers from the reverse causality problem, and Alfonso's reasoning suffers from the omitted variable problem.E) A) and D)
F) A) and C)

Question 3

The point where both x and y are zero is known as the

Accepted Answer

A)   origin.
B)   null.
C)   zero coordinate.
D)   center.E) A) and D)
F) A) and C)

Question 4

A relatively flat 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 D)
F) None of the above

Question 5

When economists make

Accepted Answer

A)   positive statements, they are speaking not as scientists but as policy advisers.
B)   positive statements, they are speaking not as scientists but as forecasters.
C)   normative statements, they are speaking not as scientists but as policy advisers.
D)   normative statements, they are speaking not as policy advisers but as model-builders.E) A) and D)
F) A) and C)

Question 6

According to economist John Maynard Keynes, a great economist must also be a(n)

Accepted Answer

A)   mathematician.
B)   historian.
C)   philosopher.
D)   All of the above are correct.E) None of the above
F) C) and D)

Question 7

In the simple circular-flow diagram, households

Accepted Answer

A)   are the only decision makers.
B)   own the factors of production.
C)   are buyers of inputs.
D)   consume only some of the goods and services that firms produce.E) B) and D)
F) B) and C)

Question 8

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) B) and C)
F) All of the above

Question 9

Normative conclusions

Accepted Answer

A)   come from positive analysis alone.
B)   are based on ignorance of positive analysis.
C)   involve value judgments.
D)   reflect the economist's role as scientist.E) A) and B)
F) B) and C)

Question 10

Which of the following is not an example of a graph of a single variable?

Accepted Answer

A)   a pie chart
B)   a bar graph
C)   a time-series graph
D)   a scatterplotE) B) and C)
F) A) and D)

Question 11

Which of the following is a positive, as opposed to a normative, statement?

Accepted Answer

A)   The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers.
B)   Antitrust laws should be used to prevent further concentration in the wireless telephone service market.
C)   The US Department of Justice sued AT&T to block its merger with T-Mobile.
D)   The wireless telephone service market is too highly concentrated.E) A) and B)
F) A) and C)

Question 12

Figure 2-9
Panel (a)  Panel (b)   
-Refer to Figure 2-9, Panel (a)  and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a)  to Panel (b)  could be caused by

Accepted Answer

A)   unemployment.
B)   an improvement in donut production technology.
C)   an improvement in coffee production technology.
D)   an improvement in both donut and coffee production technology.E) None of the above
F) A) and B)

Question 13

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 14

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Accepted Answer

A) True 
 B)False

Question 15

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

Question 16

Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik

Accepted Answer

A)   hold different normative views about the tax system.
B)   disagree about the validity of a positive theory.
C)   have a fundamental misunderstanding of the tax system.
D)   More than one of the above is correct.E) A) and B)
F) None of the above

Question 17

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) B) and D)

Question 18

Figure 2-9
Panel (a)  Panel (b)   
-Refer to Figure 2-9, 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) A) and D)
F) C) and D)

Question 19

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Accepted Answer

A) True 
 B)False

Question 20

Just like other scientific models, economic models simplify reality using

Accepted Answer

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

Exam 2: Thinking Like an Economist

When economists make

Correct Answer
verified

In the simple circular-flow diagram, households

Correct Answer
verified

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct Answer
verified

A relatively flat demand curve indicates that

Correct Answer
verified

Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik

Correct Answer
verified

Just like other scientific models, economic models simplify reality using

Correct Answer
verified

Normative conclusions

Correct Answer
verified

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Correct Answer
verified

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Different values are not a reason for disagreement among economists.

Correct Answer
verified

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Correct Answer
verified

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Correct Answer
verified

The point where both x and y are zero is known as the

Correct Answer
verified

Which of the following is a positive, as opposed to a normative, statement?

Correct Answer
verified

According to economist John Maynard Keynes, a great economist must also be a(n)

Correct Answer
verified

Which of the following is not an example of a graph of a single variable?

Correct Answer
verified

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

Correct Answer
verified

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

Correct Answer
verified

Exam 2: Thinking Like an Economist

When economists make

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram, households

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct AnswerverifiedShow Answer

A relatively flat demand curve indicates that

Correct AnswerverifiedShow Answer

Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik

Correct AnswerverifiedShow Answer

Just like other scientific models, economic models simplify reality using

Correct AnswerverifiedShow Answer

Normative conclusions

Correct AnswerverifiedShow Answer

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Correct AnswerverifiedShow Answer

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Different values are not a reason for disagreement among economists.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Correct AnswerverifiedShow Answer

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Correct AnswerverifiedShow Answer

The point where both x and y are zero is known as the

Correct AnswerverifiedShow Answer

Which of the following is a positive, as opposed to a normative, statement?

Correct AnswerverifiedShow Answer

According to economist John Maynard Keynes, a great economist must also be a(n)

Correct AnswerverifiedShow Answer

Which of the following is not an example of a graph of a single variable?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified