Question 1

Figure 2-23 
-Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 4

Figure 2-7 
-Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

Accepted Answer

A)   zero
B)   15 tvs
C)   20 engines and 15 tvs
D)   20 enginesE) A) and B)
F) A) and C) D

Question 5

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 R to point Q?

Accepted Answer

80 bushels of apples

Question 6

Economists build economic models by

Accepted Answer

A)   generating data.
B)   conducting controlled experiments in a lab.
C)   making assumptions.
D)   reviewing statistical forecasts.E) A) and B)
F) B) and C)

Question 7

A normative economic statement such as "The minimum wage should be abolished"

Accepted Answer

A)   would likely be made by an economist acting as a scientist.
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 policy advisers.E) A) and D)
F) B) and D)

Question 8

Figure 2-17 
-Refer to Figure 2-17. The movement from point B to point C could have been caused by

Accepted Answer

A)   inflation.
B)   a change in income.
C)   a change in the price of grapes.
D)   a change in the cost of producing grapes.E) A) and D)
F) B) and C)

Question 9

Table 2-4
Production Possibilities for Picnicland
 
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Accepted Answer

A)   150 hotdogs
B)   225 hotdogs
C)   300 hotdogs
D)   450 hotdogsE) C) and D)
F) None of the above

Question 10

Economists speaking like policy advisers make

Accepted Answer

A)   positive statements.
B)   descriptive statements.
C)   claims about how the world is.
D)   claims about how the world should be.E) All of the above
F) A) and C)

Question 11

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

Question 12

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Accepted Answer

A)   the Federal Reserve
B)   the Congressional Budget Office
C)   the Department of the Treasury
D)   the Department of CommerceE) A) and B)
F) None of the above

Question 13

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Accepted Answer

A) True 
 B)False

Question 14

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)   negative economic statement.
B)   positive economic statement.
C)   normative economic statement.
D)   statement that contradicts one of the basic principles of economics.E) A) and B)
F) A) and D)

Question 15

Economists believe that production possibilities frontiers are often bowed because

Accepted Answer

A)   trade-offs inevitably create unemployment.
B)   resources are not completely adaptable.
C)   opportunity costs are constant.
D)   of improvements in technology.E) A) and C)
F) A) and B) B

Question 16

Economists may disagree about the validity of alternative positive theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 17

The circular-flow diagram is an example of

Accepted Answer

A)   a laboratory experiment.
B)   an economic model.
C)   a mathematical model.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 18

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) All of the above
F) None of the above

Question 19

Figure 2-2 
-Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Accepted Answer

A)   Box D must represent the markets for factors of production.
B)   Box C must represent the markets for goods and services.
C)   firms are buyers in the markets represented by Box D.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 20

Which markets are represented in the simple circular-flow diagram?

Accepted Answer

A)   markets for goods and services and markets for financial assets
B)   markets for factors of production and markets for financial assets
C)   markets for goods and services and markets for factors of production
D)   markets for goods and services and markets for imports and exportsE) B) and C)
F) None of the above

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

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

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

Correct Answer
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Figure 2-7 -Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

Correct Answer
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D

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 R to point Q?

Correct Answer
verified
80 bushels of apples

Economists build economic models by

Correct Answer
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A normative economic statement such as "The minimum wage should be abolished"

Correct Answer
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Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C could have been caused by

Correct Answer
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Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Correct Answer
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Economists speaking like policy advisers make

Correct Answer
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Correct Answer
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Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Correct Answer
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The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Correct Answer
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"Prices rise when the quantity of money rises rapidly" is an example of a

Correct Answer
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Economists believe that production possibilities frontiers are often bowed because

Correct Answer
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B

Economists may disagree about the validity of alternative positive theories about how the world works.

Correct Answer
verified

The circular-flow diagram is an example of

Correct Answer
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The production possibilities frontier illustrates

Correct Answer
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Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Correct Answer
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Which markets are represented in the simple circular-flow diagram?

Correct Answer
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Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

Correct AnswerverifiedD

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 R to point Q?

Correct Answerverified80 bushels of apples

Economists build economic models by

Correct AnswerverifiedShow Answer

A normative economic statement such as "The minimum wage should be abolished"

Correct AnswerverifiedShow Answer

Figure 2-17 -Refer to Figure 2-17. The movement from point B to point C could have been caused by

Correct AnswerverifiedShow Answer

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Correct AnswerverifiedShow Answer

Economists speaking like policy advisers make

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Correct AnswerverifiedShow Answer

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Correct AnswerverifiedShow Answer

"Prices rise when the quantity of money rises rapidly" is an example of a

Correct AnswerverifiedShow Answer

Economists believe that production possibilities frontiers are often bowed because

Correct AnswerverifiedB

Economists may disagree about the validity of alternative positive theories about how the world works.

Correct AnswerverifiedShow Answer

The circular-flow diagram is an example of

Correct AnswerverifiedShow Answer

The production possibilities frontier illustrates

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

Which markets are represented in the simple circular-flow diagram?

Correct AnswerverifiedShow Answer

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D

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80 bushels of apples

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B

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