Question 1

Figure 2-2  Consider the production possibilities curve for a country that can produce cars,corn (in bushels) ,or a combination of the two.
-Refer to Figure 2-2.If this society is producing at point C,

Accepted Answer

A)   there is unemployment.
B)   production is efficient.
C)   growth can only be achieved through an advancement in technology.
D)   the opportunity cost of producing one more car is approximately 10 bushels of corn.E) A) and D)
F) A) and C)

Question 2

Figure 2-1 
-Refer to Figure 2-1.What do the inner arrows represent in the figure?

Accepted Answer

flow of in...

Question 3

In the circular-flow diagram,one loop represents the flow of goods and services,and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-14 
-Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 5

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 6

A demand curve shows the relationship between price and

Accepted Answer

A)   income.
B)   quantity demanded.
C)   production.
D)   income and quantity demanded.E) B) and C)
F) A) and B)

Question 7

Figure 2-4 
-Refer to Figure 2-4.Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold.You inform him that his interpretation is incorrect due to

Accepted Answer

A)   omitted variable bias.
B)   reverse causality.
C)   slope mismatch.
D)   shifting versus moving along a curve.E) All of the above
F) B) and D)

Question 8

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

Accepted Answer

A)   Americans deserve a cleaner environment.
B)   Reducing emissions reduces days missed from school due to asthma.
C)   All Americans are entitled to quality health care.
D)   Economic policies should focus on improving equality.E) All of the above
F) None of the above

Question 9

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

Question 10

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 11

When studying the effects of changes in public policy,economists believe that

Accepted Answer

A)   it is important to distinguish between the short run and the long run.
B)   the assumptions used in studying those effects should be the same for the short run as for the long run.
C)   the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)   the long-run effects of those changes are always more beneficial to society than are the short-run effects.E) None of the above
F) A) and B)

Question 12

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 13

Figure 2-8

-Refer to Figure 2-8,Panel (a) .In order to gain 2 donuts by moving from point L to point M,society must sacrifice

Accepted Answer

A)   efficiency.
B)   employment.
C)   4 cups of coffee.
D)   More than one of the above is correct.E) A) and B)
F) All of the above

Question 14

Table 2-5
 
-Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Based on the values in the table,the production possibilities frontier is

Accepted Answer

A)   bowed outward indicating increasing opportunity costs.
B)   bowed outward indicating decreasing opportunity costs.
C)   a straight line indicating constant opportunity costs.
D)   bowed inward indicating decreasing opportunity costs.E) C) and D)
F) None of the above

Question 15

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Accepted Answer

A)   have no questions but hundreds of answers.
B)   have 100 questions and 3,000 answers.
C)   have 1,000 questions but no answers.
D)   never produce a winner.E) A) and D)
F) B) and C)

Question 16

Positive statements are descriptive,while normative statements are prescriptive.

Accepted Answer

A) True 
 B)False

Question 17

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions.Which of the following is not one of those propositions?

Accepted Answer

A)   A ceiling on rents reduces the quantity and quality of housing available.
B)   Fiscal policy has a significant stimulative impact on a less than fully employed economy.
C)   The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged.
D)   The United States should implement universal health care for its citizens.E) A) and D)
F) None of the above

Question 18

Economists view positive statements as

Accepted Answer

A)   affirmative,justifying existing economic policy.
B)   optimistic,putting the best possible interpretation on things.
C)   descriptive,making a claim about how the world is.
D)   prescriptive,making a claim about how the world ought to be.E) None of the above
F) A) and B)

Question 19

Figure 2-4 
-Refer to Figure 2-4.Efficient production is represented by which point(s) ?

Accepted Answer

A)   Y,Z
B)   W,Y,Z
C)   V,Y,Z
D)   VE) B) and C)
F) A) and C)

Question 20

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

Exam 2: Thinking Like an Economist

Positive statements are descriptive,while normative statements are prescriptive.

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When studying the effects of changes in public policy,economists believe that

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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.

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Figure 2-4 -Refer to Figure 2-4.Efficient production is represented by which point(s) ?

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A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions.Which of the following is not one of those propositions?

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

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Figure 2-1 -Refer to Figure 2-1.What do the inner arrows represent in the figure?

Correct Answerverifiedflow of in...View AnswerShow Answer

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

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Figure 2-2 Consider the production possibilities curve for a country that can produce cars,corn (in bushels) ,or a combination of the two. -Refer to Figure 2-2.If this society is producing at point C,

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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

Figure 2-8 -Refer to Figure 2-8,Panel (a) .In order to gain 2 donuts by moving from point L to point M,society must sacrifice

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between price and

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

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Economists view positive statements as

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Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

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Figure 2-4 -Refer to Figure 2-4.Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold.You inform him that his interpretation is incorrect due to

Correct AnswerverifiedShow Answer

Trade-offs are involved in most policy decisions.

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Table 2-5 -Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Based on the values in the table,the production possibilities frontier is

Correct AnswerverifiedShow Answer

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

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In the circular-flow diagram,one loop represents the flow of goods and services,and the other loop represents the flow of factors of production.

Correct AnswerverifiedShow Answer

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flow of in...
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