Question 1

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

Accepted Answer

A)   goods and services
B)   dollars paid to land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) C) and D)
F) B) and C)

Question 2

When an economy is operating at a point on its production possibilities frontier, then

Accepted Answer

A)   consumers are content with the mix of goods and services that is being produced.
B)   there is no way to produce more of one good without producing less of the other.
C)   equal amounts of the two goods are being produced.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 3

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.
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) A) and D)
F) A) and C)

Question 4

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

Accepted Answer

A)   possible at points A, B, C, and D, but efficient only at points A, C, and D.
B)   possible at points A, B, C, and D, but efficient only at point B.
C)   possible at points A, C, D, and F, but efficient only at points A, C, and D.
D)   possible at points A, C, D, and F, but efficient only at point F.E) B) and D)
F) All of the above

Question 5

Another term for factors of production is

Accepted Answer

A)   inputs.
B)   output.
C)   goods.
D)   services.E) A) and D)
F) All of the above

Question 6

Different values are not a reason for disagreement among economists.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-13
 
-Refer to Figure 2-13. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Accepted Answer

A)   The less coffee a person drinks per day, the more time he can go without sleep.
B)   There is no relationship between how much coffee per day a person drinks and how long he can go without sleep.
C)   The more coffee a person drinks per day, the more time he can go without sleep.
D)   The more coffee a person drinks per day, the less time he can go without sleep.E) B) and D)
F) B) and C)

Question 8

Factors of production are

Accepted Answer

A)   the mathematical calculations firms make in determining their optimal production levels.
B)   social and political conditions that affect production.
C)   the physical relationships between economic inputs and outputs.
D)   inputs into the production process.E) B) and C)
F) A) and B)

Question 9

"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 C)

Question 10

In the ordered pair (17, 75) , 75 is the

Accepted Answer

A)   horizontal location of the point.
B)   the slope.
C)   the x-coordinate.
D)   the y-coordinate.E) None of the above
F) B) and D)

Question 11

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 B)
F) None of the above

Question 12

Figure 2-4
 
-Refer to Figure 2-4. The opportunity cost of this economy moving from point Z to point Y is

Accepted Answer

A)   0 lamps.
B)   10 lamps.
C)   10 notepads.
D)   20 lamps.E) A) and B)
F) C) and D)

Question 13

Which of the following is not correct?

Accepted Answer

A)   Economists use some familiar words in specialized ways.
B)   Economics has its own language and its own way of thinking, but few other fields of study do.
C)   Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language.
D)   The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.E) B) and C)
F) A) and D)

Question 14

Which of the following statements is correct?

Accepted Answer

A)   Economists almost always find it easy to conduct experiments in order to test their theories.
B)   Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories.
C)   Economics is a social science rather than a true science because it cannot employ the scientific method.
D)   Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.E) A) and D)
F) A) and B)

Question 15

A demand curve shows the relationship between price and

Accepted Answer

A)   income.
B)   quantity demanded.
C)   production.
D)   income and quantity demanded.E) None of the above
F) B) and D)

Question 16

Figure 2-10
 
-Refer to Figure 2-10. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A)   simultaneous technological advances in the book and DVD industries.
B)   a reallocation of resources away from the production of DVDs and toward the production of books.
C)   economic growth.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 17

Economists use one standard set of assumptions to answer all economic questions.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)   have different normative views about tax policy.
B)   disagree about the validity of a positive theory.
C)   must both be incorrect because economists always agree on policy issues.
D)   None of the above is correct.E) A) and D)
F) A) and B)

Question 19

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A)   efficiency
B)   opportunity cost
C)   equality
D)   trade-offsE) A) and D)
F) B) and C)

Exam 2: Thinking Like an Economist

Which of the following statements is correct?

Correct Answer
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Economists speaking like scientists make

Correct Answer
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Which of the following is not correct?

Correct Answer
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Factors of production are

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

Correct Answer
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In the ordered pair (17, 75) , 75 is the

Correct Answer
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In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services?

Correct Answer
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Historical episodes are

Correct Answer
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Different values are not a reason for disagreement among economists.

Correct Answer
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Figure 2-4 -Refer to Figure 2-4. The opportunity cost of this economy moving from point Z to point Y is

Correct Answer
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Economists use one standard set of assumptions to answer all economic questions.

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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Figure 2-13 -Refer to Figure 2-13. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Correct Answer
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Economic growth causes a production possibilities frontier to shift outward.

Correct Answer
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Figure 2-10 -Refer to Figure 2-10. The shift of the production possibilities frontier from A to B illustrates

Correct Answer
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Which of the following concepts cannot be illustrated by the production possibilities frontier?

Correct Answer
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When an economy is operating at a point on its production possibilities frontier, then

Correct Answer
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A demand curve shows the relationship between price and

Correct Answer
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Another term for factors of production is

Correct Answer
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Exam 2: Thinking Like an Economist

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Economists speaking like scientists make

Correct AnswerverifiedShow Answer

Which of the following is not correct?

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Factors of production are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the ordered pair (17, 75) , 75 is the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Historical episodes are

Correct AnswerverifiedShow Answer

Different values are not a reason for disagreement among economists.

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. The opportunity cost of this economy moving from point Z to point Y is

Correct AnswerverifiedShow Answer

Economists use one standard set of assumptions to answer all economic questions.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-13 -Refer to Figure 2-13. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Correct AnswerverifiedShow Answer

Economic growth causes a production possibilities frontier to shift outward.

Correct AnswerverifiedShow Answer

Figure 2-10 -Refer to Figure 2-10. The shift of the production possibilities frontier from A to B illustrates

Correct AnswerverifiedShow Answer

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Correct AnswerverifiedShow Answer

When an economy is operating at a point on its production possibilities frontier, then

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between price and

Correct AnswerverifiedShow Answer

Another term for factors of production is

Correct AnswerverifiedShow Answer

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