Question 1

Instead of conducting laboratory experiments to generate data to test their theories,economists often

Accepted Answer

A)   ask winners of the Nobel Prize in Economics to evaluate their theories.
B)   argue that data is impossible to collect in economics.
C)   gather data from historical episodes of economic change.
D)   assume that data would support their theories.E) A) and C)
F) A) and B)

Question 2

Historical episodes are

Accepted Answer

A)   valuable to economists because they allow economists to see how the science of economics has evolved.
B)   valuable to economists because they allow economists to evaluate economic theories of the present.
C)   not of concern to economists because economics is about predicting the future,not dwelling on the past.
D)   not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again.E) B) and D)
F) All of the above

Question 3

For an economist,the idea of making assumptions is regarded generally as a

Accepted Answer

A)   bad idea,since doing so leads to the omission of important ideas and variables from economic models.
B)   bad idea,since doing so invariably leads to data-collection problems.
C)   good idea,since doing so helps to simplify the complex world and make it easier to understand.
D)   good idea,since economic analysis without assumptions leads to complicated results that the general public finds hard to understand.E) A) and D)
F) A) and B)

Question 4

Figure 2-8
Panel (a) Panel (b)   
-Refer to Figure 2-8,Panel (a) .The opportunity cost of moving from point J to point L is

Accepted Answer

A)   2 donuts.
B)   2 donuts and 2 cups of coffee.
C)   2 cups of coffee.
D)   6 cups of coffee.E) B) and C)
F) A) and D)

Question 5

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is correct?

Accepted Answer

A)   Few economic models incorporate assumptions.
B)   Different economic models employ different sets of assumptions.
C)   Good economic models attempt to mimic reality as closely as possible.
D)   Economic models,to be accepted,must be tested by conducting experiments.E) B) and D)
F) A) and D)

Question 7

Which of the following statements about models is correct?

Accepted Answer

A)   The more details a model includes,the better the model.
B)   Models assume away irrelevant details.
C)   Models cannot be used to explain how the economy functions.
D)   Models cannot be used to make predictions.E) A) and D)
F) All of the above

Question 8

When a production possibilities frontier is bowed outward,the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 9

If a line passes through the points (20,5)and (10,10),then the slope of the line is -2.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-6 
-Refer to Figure 2-6.This economy has the ability to produce at which point(s) ?

Accepted Answer

A)   A,B
B)   A,B,D
C)   A,B,C,F,G
D)   C,F,GE) C) and D)
F) A) and B)

Question 11

When economists are trying to help improve the world,they are

Accepted Answer

A)   in the realm of positive economics rather than normative economics.
B)   in the realm of macroeconomics rather than microeconomics.
C)   scientists.
D)   policy advisers.E) B) and D)
F) A) and D)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

When two variables move in opposite directions,the curve relating them is

Accepted Answer

A)   upward sloping,and we say the variables are positively related.
B)   upward sloping,and we say the variables are negatively related.
C)   downward sloping,and we say the variables are positively related.
D)   downward sloping,and we say the variables are negatively related.E) None of the above
F) A) and D)

Question 14

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 15

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)   can only show variables that are positively related.
B)   can only show variables that have a negative correlation.
C)   provide information on only one variable.
D)   provide information on no more than two variables.E) None of the above
F) A) and D)

Question 16

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

Accepted Answer

A)   Universal health care would be good for U.S.citizens.
B)   An increase in the cigarette tax would cause a decrease in the number of smokers.
C)   A decrease in the minimum wage would decrease unemployment.
D)   A law requiring the federal government to balance its budget would increase economic growth.E) B) and D)
F) C) and D)

Question 17

Figure 2-14 
-Refer to Figure 2-14.It is possible for this economy to produce 30 doghouses and 20 dishwashers.

Accepted Answer

A) True 
 B)False

Question 18

In the circular-flow diagram,in the markets for

Accepted Answer

A)   goods and services,households and firms are both sellers.
B)   goods and services,households are buyers and firms are sellers.
C)   the factors of production,households are buyers and firms are sellers.
D)   the factors of production,households and firms are both buyers.E) None of the above
F) B) and C)

Question 19

The slope of a line is equal to

Accepted Answer

A)   rise divided by run.
B)   run divided by rise.
C)   rise minus run.
D)   rise plus run.E) A) and D)
F) All of the above

Question 20

Figure 2-4 
-Refer to Figure 2-4.This economy cannot currently produce 30 toothbrushes and 45 toasters 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) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

The slope of a line is equal to

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Which of the following statements about models is correct?

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Instead of conducting laboratory experiments to generate data to test their theories,economists often

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In the circular-flow diagram,in the markets for

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Figure 2-6 -Refer to Figure 2-6.This economy has the ability to produce at which point(s) ?

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

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An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

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When two variables move in opposite directions,the curve relating them is

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Historical episodes are

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Which of the following statements is correct?

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Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 30 doghouses and 20 dishwashers.

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

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When a production possibilities frontier is bowed outward,the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

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Graphs such as bar graphs and pie charts are limited in that they

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If a line passes through the points (20,5)and (10,10),then the slope of the line is -2.

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Points outside the production possibilities frontier represent infeasible levels of production.

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When economists are trying to help improve the world,they are

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Figure 2-8 Panel (a) Panel (b) -Refer to Figure 2-8,Panel (a) .The opportunity cost of moving from point J to point L is

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For an economist,the idea of making assumptions is regarded generally as a

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

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