Question 1

Figure 2-7 
-Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Accepted Answer

A)   0 engines and 40 tvs.
B)   10 engines and 35 tvs.
C)   40 engines and 0 tvs.
D)   40 engines and 40 tvs.

Question 2

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

Accepted Answer

A)   wages
B)   land
C)   capital
D)   goods and services sold

Question 3

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.

Question 4

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   Q, R, U
B)   R, T, U
C)   R, U
D)   S, T

Question 6

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.

Question 7

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 8

In the circular-flow diagram, firms consume all the goods and services that they produce.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)   Gasoline prices ought to be lower than they are now.
B)   The federal government should raise taxes on wealthy people.
C)   The social security system is a good system and it deserves to be preserved as it is.
D)   All of the above are normative statements.

Question 10

Table 2-6
 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Accepted Answer

The answer of Table 2-6
 
-Refer to Table 2-6. Consider...

Question 11

A microeconomist - as opposed to a macroeconomist - might study

Accepted Answer

A)   the effect of a national healthcare program on the nation's unemployment rate.
B)   the effect of new regulations on production in the pulp and paper industry.
C)   the effect of changes in interest rates on gross domestic product.
D)   the growth rate of production in the economy.

Question 12

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.

Question 13

Economists make assumptions to

Accepted Answer

A)   provide issues for political discussion.
B)   make a complex world easier to understand.
C)   make it easier to teach economic concepts and analysis.
D)   create policy alternatives that are incomplete or subject to criticism.

Question 14

One thing economists do to help them understand how the real world works is

Accepted Answer

A)   make assumptions.
B)   ignore the past.
C)   try to capture every aspect of the real world in the models they construct.
D)   All of the above are correct.

Question 15

A circular-flow model and production possibilities frontier are similar in that

Accepted Answer

A)   neither allows economic analysis to occur.
B)   neither can be represented visually on a graph.
C)   both make use of assumptions.
D)   both make use of complex equations to arrive at solutions.

Question 16

Figure 2-9
Panel (a)  Panel (b) 
  
-Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

Accepted Answer

A)   0 cups of coffee.
B)   2 cups of coffee.
C)   4 cups of coffee.
D)   6 cups of coffee.

Question 17

Table 2-6
 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

Accepted Answer

The answer of Table 2-6
 
-Refer to Table 2-6. Consider...

Question 18

When economists make normative statements, they are

Accepted Answer

A)   speaking as scientists.
B)   speaking as policy advisers.
C)   making claims about how the world is.
D)   revealing that they are very liberal in their views of how the world works.

Question 19

In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

Market for Goods and...

Exam 2: Thinking Like an Economist

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

Correct AnswerverifiedShow Answer

In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

Correct AnswerverifiedShow Answer

When economists make normative statements, they are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

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

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Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

A microeconomist - as opposed to a macroeconomist - might study

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

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In the circular-flow diagram, firms consume all the goods and services that they produce.

Correct AnswerverifiedShow Answer

Economists make assumptions to

Correct AnswerverifiedShow Answer

One thing economists do to help them understand how the real world works is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Correct AnswerverifiedShow Answer

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Correct AnswerverifiedShow Answer

A circular-flow model and production possibilities frontier are similar in that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedMarket for Goods and...View AnswerShow Answer

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Market for Goods and...
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