Question 1

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

Accepted Answer

A)   If the price of a product decreases, people's willingness to buy that product will increase.
B)   Reducing tax rates on the wealthy would benefit the nation.
C)   If the national saving rate were to increase, so would the rate of economic growth.
D)   The elimination of trade restrictions would increase an economy's standard of living.E) A) and D)
F) A) and C)

Question 2

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 3

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A)   income
B)   price
C)   preferences
D)   the availability of alternative goodsE) All of the above
F) C) and D)

Question 5

Figure 2-23 
-Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

Accepted Answer

A) True 
 B)False

Question 6

Because it is difficult for economists to use experiments to generate data, they generally must

Accepted Answer

A)   do without data.
B)   substitute assumptions for data when data are unavailable.
C)   rely upon hypothetical data that were previously concocted by other economists.
D)   use whatever data the world gives them.E) B) and C)
F) None of the above

Question 7

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

Question 8

In the circular-flow diagram, households and firms are the decision makers.

Accepted Answer

A) True 
 B)False

Question 9

Which of these statements about economic models is correct?

Accepted Answer

A)   For economists, economic models provide insights about the world.
B)   Economic models are built with assumptions.
C)   Economic models are often composed of equations and diagrams.
D)   All of the above are correct.E) A) and D)
F) A) and B)

Question 10

Economists speaking like scientists make

Accepted Answer

A)   positive statements.
B)   prescriptive statements.
C)   claims about how the world should be.
D)   More than one of the above is correct.E) A) and C)
F) A) and B)

Question 11

The slope of a steep upward-sloping line will be a

Accepted Answer

A)   small positive number.
B)   large positive number.
C)   small negative number.
D)   large negative number.E) None of the above
F) B) and C)

Question 12

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. Which point(s) on the graph is(are) unattainable given current resources and technology?

Accepted Answer

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

Question 13

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Accepted Answer

A) True 
 B)False

Question 14

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Accepted Answer

A)   Tariffs and import quotas usually reduce general economic welfare.
B)   A large federal budget deficit has an adverse effect on the economy.
C)   Minimum wage increases unemployment among young and unskilled workers.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

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 16

A relatively steep 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 B)
F) B) and C)

Question 17

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

Question 18

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Accepted Answer

A) True 
 B)False

Question 19

Economists at which administrative department help enforce the nation's antitrust laws?

Accepted Answer

Department...

Question 20

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Which of the following is not held constant when looking at an individual's demand curve?

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A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

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The slope of a steep upward-sloping line will be a

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Economists speaking like scientists make

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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

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Which of these statements about economic models is correct?

Correct AnswerverifiedShow Answer

A relatively steep demand curve indicates that

Correct AnswerverifiedShow Answer

In the circular-flow diagram, households and firms are the decision makers.

Correct AnswerverifiedShow Answer

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Correct AnswerverifiedShow Answer

Economists at which administrative department help enforce the nation's antitrust laws?

Correct AnswerverifiedDepartment...View AnswerShow Answer

In the ordered pair (10,30), 10 is the y-coordinate and 30 is the z-coordinate.

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point B to point D is 15 doghouses.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Because it is difficult for economists to use experiments to generate data, they generally must

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

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. Which point(s) on the graph is(are) unattainable given current resources and technology?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.

Correct AnswerverifiedShow Answer

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

Correct AnswerverifiedShow Answer

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Correct AnswerverifiedShow Answer

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Department...
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