Question 1

Figure 2-6 
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A)   This economy has moved from a point of inefficient production to a point of efficient production.
B)   This economy has experienced economic growth.
C)   This economy has experienced an increase in employment.
D)   None of the above is correct.E) B) and C)
F) None of the above

Question 2

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Question 3

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 4

When two variables have a positive correlation,

Accepted Answer

A)   when the x-variable increases, the y-variable decreases.
B)   when the x-variable decreases, the y-variable increases.
C)   when the x-variable increases, the y-variable increases.
D)   More than one of the above is correct.E) A) and B)
F) A) and C)

Question 5

The Economic Report of the President

Accepted Answer

A)   discusses recent developments in the economy and presents analysis of current policy issues.
B)   is written by the Council of Economic Advisers.
C)   is the responsibility of the economists at the Office of Management and Budget.
D)   Both a and b are correct.E) A) and B)
F) A) and C)

Question 6

"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) None of the above

Question 7

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

Question 8

The slope of a fairly flat 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) All of the above
F) B) and C)

Question 9

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Accepted Answer

A) True 
 B)False

Question 10

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 11

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Accepted Answer

The answer of Is the following a positive or normative...

Question 12

Another term for factors of production is

Accepted Answer

A)   inputs.
B)   output.
C)   goods.
D)   services.E) C) and D)
F) None of the above

Question 13

Figure 2-7 
-Refer to Figure 2-7. This economy cannot produce at which points) ?

Accepted Answer

A)   L, M
B)   N, O, P, Q
C)   N, O, P
D)   QE) B) and C)
F) A) and B)

Question 14

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 15

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 B)
F) A) and C)

Question 16

Figure 2-3 
-Refer to Figure 2-3. What do the rectangles represent in the figure?

Accepted Answer

The answer of Figure 2-3 
-Refer to Figure 2-3. What...

Question 17

Production possibilities frontiers are usually bowed outward. This is because

Accepted Answer

A)   the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
B)   the opportunity cost of producing a good decreases as more and more of that good is produced.
C)   of the effects of technological change.
D)   resources are specialized; that is, some are better at producing particular goods rather than other goods.E) B) and D)
F) C) and D)

Question 18

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 19

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Accepted Answer

A)   the effects of rent control on the availability of housing in New York City
B)   the economic impact of tornadoes on cities and towns in Oklahoma
C)   how tariffs on shoes affects the shoe industry
D)   the effect on the economy of changes in the nation's unemployment rateE) B) and C)
F) None of the above

Question 20

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

The answer of Is the following a positive or normative...

Exam 2: Thinking Like an Economist

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

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Points inside the production possibilities frontier represent feasible levels of production.

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Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Correct AnswerverifiedShow Answer

Microeconomics is the study of

Correct AnswerverifiedShow Answer

When a variable that is named on an axis of a graph changes, the curve shifts.

Correct AnswerverifiedShow Answer

The slope of a fairly flat upward-sloping line will be a

Correct AnswerverifiedShow Answer

Microeconomics and macroeconomics are closely intertwined.

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which points) ?

Correct AnswerverifiedShow Answer

Historical episodes are

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Another term for factors of production is

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

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

The Economic Report of the President

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Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Correct AnswerverifiedShow Answer

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

Production possibilities frontiers are usually bowed outward. This is because

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. What do the rectangles represent in the figure?

Correct AnswerverifiedShow Answer

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Correct AnswerverifiedShow Answer

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Correct AnswerverifiedShow Answer

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