Question 1

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

Accepted Answer

A)   Inflation is more harmful to the economy than unemployment is.
B)   If welfare payments increase, the world will be a better place.
C)   Prices rise when the government prints too much money.
D)   When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.E) A) and C)
F) All of the above

Question 2

When economists disagree about whether a policy is fair, they are expressing a difference in

Accepted Answer

The answer of When economists disagree about whether a policy...

Question 3

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a. On the graph, identify the area of feasible outcomes and the area of infeasible outcomes.
b. On the graph, label a point that is efficient and a point that is inefficient.
c. On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy.
d. On a second graph, illustrate the effect of a new computerized assembly line in the production of hammers on this economy.

Accepted Answer

The answer of Draw a production possibilities frontier showing increasing...

Question 4

Table 2-4
Production Possibilities for Picnicland 
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

Accepted Answer

A)   150 burgers
B)   225 burgers
C)   300 burgers
D)   450 burgersE) B) and D)
F) A) and B)

Question 5

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Table 2-3
Production Possibilities for Footville 
-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)   400 socks
B)   300 socks
C)   200 socks
D)   100 socksE) None of the above
F) A) and D)

Question 8

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Accepted Answer

A)   interest
B)   capital
C)   spending by households on goods
D)   spending by households on servicesE) A) and B)
F) All of the above

Question 9

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. The bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is

Accepted Answer

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

Question 10

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 11

Which of the following steps does an economist take when studying the economy?

Accepted Answer

A)   devise theories
B)   collect data
C)   analyze data
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 12

In the circular-flow diagram, firms produce goods and services using the factors of production.

Accepted Answer

A) True 
 B)False

Question 13

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

Question 14

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)   similar opinions about the validity of economic theories
B)   significant differences in education
C)   differences in personal values
D)   a reliance on normative statement for research theoriesE) B) and C)
F) B) and D)

Question 15

Economists at the U.S. Department of Justice help enforce the nation's antitrust laws.

Accepted Answer

A) True 
 B)False

Question 16

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Accepted Answer

A)   economists have not yet convinced the general public that the policies are undesirable.
B)   economists engage in positive analysis, not normative analysis.
C)   economists have values that are different from the values of most non-economists.
D)   economists' theories are not easily confirmed or refuted in laboratory analysis.E) All of the above
F) A) and B)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A)   A country produces only two goods or types of goods.
B)   Technology does not change.
C)   The amount of available resources does not change.
D)   There is a fixed quantity of money.E) All of the above
F) C) and D)

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) None of the above
F) B) and C)

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

When economists disagree about whether a policy is fair, they are expressing a difference in

Correct Answer
verified

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

Correct Answer
verified

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. The bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is

Correct Answer
verified

Which of the following steps does an economist take when studying the economy?

Correct Answer
verified

Trade-offs are involved in most policy decisions.

Correct Answer
verified

Correct Answer
verified

Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Correct Answer
verified

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not an assumption of the productions possibilities frontier?

Correct Answer
verified

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

Correct Answer
verified

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Correct Answer
verified

Economists at the U.S. Department of Justice help enforce the nation's antitrust laws.

Correct Answer
verified

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct Answer
verified

The slope of a line is equal to

Correct Answer
verified

In the circular-flow diagram, firms produce goods and services using the factors of production.

Correct Answer
verified

Exam 2: Thinking Like an Economist

When economists disagree about whether a policy is fair, they are expressing a difference in

Correct AnswerverifiedShow Answer

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

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. The bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is

Correct AnswerverifiedShow Answer

Which of the following steps does an economist take when studying the economy?

Correct AnswerverifiedShow Answer

Trade-offs are involved in most policy decisions.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

Correct AnswerverifiedShow Answer

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

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

Which of the following is not an assumption of the productions possibilities frontier?

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

Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

Correct AnswerverifiedShow Answer

Economists at the U.S. Department of Justice help enforce the nation's antitrust laws.

Correct AnswerverifiedShow Answer

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Correct AnswerverifiedShow Answer

The slope of a line is equal to

Correct AnswerverifiedShow Answer

In the circular-flow diagram, firms produce goods and services using the factors of production.

Correct AnswerverifiedShow Answer

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