Question 1

Microeconomics is the study of

Accepted Answer

A)   how money affects the economy.
B)   how individual households and firms make decisions.
C)   how government affects the economy.
D)   how the economy as a whole works.E) A) and B)
F) A) and C)

Question 2

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) A) and B)

Question 3

The duties of the Council of Economic Advisers are to advise the president of the United States and to determine U.S.monetary policy.

Accepted Answer

A) True 
 B)False

Question 4

The design of tax policy is one of the responsibilities of economists who work at the

Accepted Answer

A)   Council of Economic Advisers.
B)   Federal Reserve.
C)   Department of the Treasury.
D)   Congressional Budget Office.E) A) and B)
F) A) and C)

Question 5

The scientific method is the dispassionate development and testing of theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2-4
 
-Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

Accepted Answer

A)   0 notepads and 40 lamps.
B)   35 notepads and 20 lamps.
C)   70 notepads and 0 lamps.
D)   70 notepads and 40 lamps.E) B) and D)
F) None of the above

Question 7

When two variables have a positive correlation,

Accepted Answer

A)   they tend to move in opposite directions.
B)   they tend to move in the same direction.
C)   one variable will move while the other remains constant.
D)   the variables' values are never negative.E) A) and B)
F) C) and D)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

For economists,conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 10

When an economist evaluates a positive statement,he or she is primarily

Accepted Answer

A)   examining evidence.
B)   evaluating values as well as facts.
C)   acting as a policy adviser.
D)   concerned with making a sound decision on how the world ought to be.E) A) and B)
F) B) and D)

Question 11

Among economic models,the circular-flow diagram is unusual in that it

Accepted Answer

A)   drastically simplifies the real world.
B)   features more than one type of market.
C)   features flows of dollars.
D)   does not involve mathematics.E) C) and D)
F) B) and D)

Question 12

It is possible for an economy to increase its production of both goods if the economy

Accepted Answer

A)   moves downward and to the right along its production possibilities frontier and the frontier is bowed outward.
B)   moves upward and to the left along its production possibilities frontier and the frontier is bowed outward.
C)   moves in either direction along its production possibilities frontier and the frontier is a straight line.
D)   moves from a situation of inefficient production to a situation of efficient production.E) None of the above
F) A) and D)

Question 13

When two variables move in opposite directions,the curve relating them is upward sloping,and we say the variables are positively related.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements applies to economics,as well as to other sciences such as physics?

Accepted Answer

A)   Experiments are considered valid only when they are conducted in a laboratory.
B)   Good theories do not need to be tested.
C)   Real-world observations often lead to theories.
D)   Economics, as well as other sciences, is concerned primarily with abstract concepts.E) C) and D)
F) B) and D)

Question 15

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 16

A demand curve shows the relationship

Accepted Answer

A)   between income and quantity demanded.
B)   between price and income.
C)   between price and quantity demanded.
D)   among income, price, and quantity demanded.E) B) and D)
F) A) and C)

Question 17

Economists at the U.S.Department of the Treasury help design U.S.coins and paper money.

Accepted Answer

A) True 
 B)False

Question 18

The opportunity cost of something is what you give up to get it.

Accepted Answer

A) True 
 B)False

Question 19

In the circular-flow diagram,which of the following items flows from firms to households 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 C)
F) C) and D)

Question 20

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)   should produce.
B)   wants to produce.
C)   can produce.
D)   demands.E) A) and C)
F) B) and D)

Exam 2: Thinking Like an Economist.

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Correct AnswerverifiedShow Answer

When an economist evaluates a positive statement,he or she is primarily

Correct AnswerverifiedShow Answer

The duties of the Council of Economic Advisers are to advise the president of the United States and to determine U.S.monetary policy.

Correct AnswerverifiedShow Answer

A demand curve shows the relationship

Correct AnswerverifiedShow Answer

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Correct AnswerverifiedShow Answer

When two variables move in opposite directions,the curve relating them is upward sloping,and we say the variables are positively related.

Correct AnswerverifiedShow Answer

Economists at the U.S.Department of the Treasury help design U.S.coins and paper money.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The scientific method is the dispassionate development and testing of theories about how the world works.

Correct AnswerverifiedShow Answer

For economists,conducting experiments is often difficult and sometimes impossible.

Correct AnswerverifiedShow Answer

The design of tax policy is one of the responsibilities of economists who work at the

Correct AnswerverifiedShow Answer

Microeconomics is the study of

Correct AnswerverifiedShow Answer

Which of the following statements applies to economics,as well as to other sciences such as physics?

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

It is possible for an economy to increase its production of both goods if the economy

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4.If this economy devotes all of its resources to the production of notepads,then it will produce

Correct AnswerverifiedShow Answer

Among economic models,the circular-flow diagram is unusual in that it

Correct AnswerverifiedShow Answer

The opportunity cost of something is what you give up to get it.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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