Question 1

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)  the effects of rent control on housing in New York City.
B)  the effects of foreign competition on the US auto industry.
C)  the effects of borrowing by the federal government.
D)  the effects of raising the gasoline tax on transit ridership.E) A) and C)
F) A) and D)

Question 2

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Accepted Answer

A)  will never be able to produce.
B)  can produce using all available resources and technology.
C)  can produce using some portion, but not all, of its resources and technology.
D)  may be able to produce in the future with more resources and/or superior technology.E) C) and D)
F) None of the above

Question 3

Almost all economists agree that tariffs and import quotas

Accepted Answer

A)  reduces general economic welfare.
B)  increases general economic welfare.
C)  have no effect on general economic welfare.
D)  stimulate a less than fully employed economy.E) B) and C)
F) A) and D)

Question 4

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

Accepted Answer

A)  The economy experiences economic growth.
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance.
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance.
D)  All of the above are correct.E) A) and B)
F) C) and D)

Question 5

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

Accepted Answer

A)  The federal government should decrease coverage of unemployment benefits to stimulate the economy out of the recession.
B)  Congress should agree on lower government spending for the next fiscal year.
C)  The Federal Reserve Bank should increase interest rates in response to the higher-than-expected inflation in the economy.
D)  The unemployment rate last year was lower than any other year in the last century.E) A) and B)
F) None of the above

Question 6

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) C) and D)

Question 7

Figure 2-14 
-Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 8

Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.

Accepted Answer

A) True 
 B)False

Question 9

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. The slope of the line containing points Y and Z is

Accepted Answer

A)  -0.5.
B)  -1.
C)  -2.
D)  -4.E) A) and B)
F) A) and D)

Question 10

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a)  and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a)  to Panel (b)  could be caused by

Accepted Answer

A)  unemployment.
B)  an improvement in donut production technology.
C)  an improvement in coffee production technology.
D)  an improvement in both donut and coffee production technology.E) B) and C)
F) None of the above

Question 11

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Accepted Answer

A)  Dylan receives a salary for his work as a financial analyst for an investment firm.
B)  Kristin buys two business suits to wear to her job as a Chief Information Officer.
C)  Jim receives clean water in his home in exchange for paying his water bill.
D)  Caroline owns a nail salon and receives payments from her clients for her services.E) B) and C)
F) A) and D)

Question 12

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Accepted Answer

A) True 
 B)False

Question 13

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) efficient production possibilities?

Accepted Answer

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

Question 14

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Accepted Answer

A)  Most people who study economics are not very bright.
B)  Good economists must possess a rare combination of gifts.
C)  Economics is quite boring; hence, people tend to lose interest in it before mastering it.
D)  Good thinkers become frustrated with economics because it does not make use of the scientific method.E) None of the above
F) B) and D)

Question 15

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Accepted Answer

A)  a controlled experiment that lead to the formulation of a scientific theory.
B)  being in the right place at the right time.
C)  an idea whose time had come.
D)  the interplay between observation and theory in science.E) A) and C)
F) B) and C)

Question 16

Figure 2-4 
-Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Accepted Answer

A)  Q
B)  Q, S
C)  Q, S, T
D)  SE) A) and B)
F) A) and C)

Question 17

According to economist John Maynard Keynes, a great economist must also be a(n)

Accepted Answer

A)  mathematician.
B)  historian.
C)  philosopher.
D)  All of the above are correct.E) A) and D)
F) None of the above

Question 18

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A)  There is a great deal of agreement among economists on virtually every economic issue.
B)  There is a great deal of agreement among economists on many important economic issues.
C)  All disagreements among economists are attributable to differences in their values.
D)  All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.E) B) and C)
F) A) and D)

Question 19

According to the circular-flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Accepted Answer

A)  in the markets for factors of production exchanging labor for income.
B)  in the markets for factors of production exchanging flowers for revenue.
C)  in the markets for goods and services exchanging flowers for wages, rent, and profit.
D)  in the markets for goods and services exchanging labor for income.E) A) and B)
F) B) and D)

Question 20

Figure 2-21 
-Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Accepted Answer

A)  the price of snowblowers
B)  a change in consumers' incomes
C)  a change in the seasons
D)  All of the above are correct.E) C) and D)
F) A) and B)

Exam 2: Thinking Like an Economist

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Correct Answer
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Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points Y and Z is

Correct Answer
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How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Correct Answer
verified

According to economist John Maynard Keynes, a great economist must also be a(n)

Correct Answer
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Figure 2-14 -Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Correct Answer
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Almost all economists agree that tariffs and import quotas

Correct Answer
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Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.

Correct Answer
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A macroeconomist - as opposed to a microeconomist - would study

Correct Answer
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Which of the following statements is correct about the extent of disagreement among economists?

Correct Answer
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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) efficient production possibilities?

Correct Answer
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The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Correct Answer
verified

Correct Answer
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Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Correct Answer
verified

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct Answer
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Figure 2-21 -Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

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

Correct Answer
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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct Answer
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Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

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

Correct Answer
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According to the circular-flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Correct Answer
verified

Exam 2: Thinking Like an Economist

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points Y and Z is

Correct AnswerverifiedShow Answer

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Correct AnswerverifiedShow Answer

According to economist John Maynard Keynes, a great economist must also be a(n)

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Correct AnswerverifiedShow Answer

Almost all economists agree that tariffs and import quotas

Correct AnswerverifiedShow Answer

Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.

Correct AnswerverifiedShow Answer

A macroeconomist - as opposed to a microeconomist - would study

Correct AnswerverifiedShow Answer

Which of the following statements is correct about the extent of disagreement among economists?

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) efficient production possibilities?

Correct AnswerverifiedShow Answer

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Correct AnswerverifiedShow Answer

Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of

Correct AnswerverifiedShow Answer

Figure 2-21 -Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct AnswerverifiedShow Answer

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the circular-flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Correct AnswerverifiedShow Answer

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