Question 1

Figure 2-5 
-Refer to Figure 2-5.The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

Accepted Answer

A)  0 washers.
B)  20 washers.
C)  40 washers.
D)  None of the above;the economy cannot move from point D to point A.

Question 2

Efficiency is illustrated by

Accepted Answer

A)  both the production possibilities frontier and the circular-flow diagram.
B)  neither the production possibilities frontier nor the circular-flow diagram.
C)  the production possibilities frontier only.
D)  the circular-flow diagram only.

Question 3

In the circular-flow diagram,

Accepted Answer

A)  factors of production flow from government to firms.
B)  goods and services flow from households to firms.
C)  income paid to the factors of production flows from firms to households.
D)  spending on goods and services flows from firms to households.

Question 4

Figure 2-10

-Refer to Figure 2-10,Panel (a) .The movement from point W to point Y could be caused by

Accepted Answer

A)  economic growth.
B)  unemployment.
C)  an improvement in efficiency.
D)  an advance in production technology.

Question 5

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.

Question 6

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 combination of points show production possibilities only achievable with improvements in technology or increases in resources?

Accepted Answer

A)  Q,R,U,and V
B)  S and X
C)  T and W
D)  None of the above is correct.

Question 7

Figure 2-16​ 
-Refer to Figure 2-16.The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Accepted Answer

A)  10 gadgets.
B)  30 widgets
C)  10 gadgets and 30 widgets.
D)  0 gadgets.

Question 8

An economy's production of two goods is efficient if

Accepted Answer

A)  all members of society consume equal portions of the goods.
B)  the goods are produced using only some of society's available resources.
C)  it is impossible to produce more of one good without producing less of the other.
D)  the opportunity cost of producing more of one good is zero.

Question 9

Figure 2-1 
-Refer to Figure 2-1.Which arrow represents the flow of goods and services?

Accepted Answer

A)  A
B)  B
C)  C
D)  D

Question 10

Production is efficient if the economy is producing at a point

Accepted Answer

A)  on the production possibilities frontier.
B)  outside the production possibilities frontier.
C)  on or inside the production possibilities frontier.
D)  inside the production possibilities frontier.

Question 11

In economics,capital refers to

Accepted Answer

A)  the finances necessary for firms to produce their products.
B)  buildings and machines used in the production process.
C)  the money households use to purchase firms' output.
D)  stocks and bonds.

Question 12

Figure 2-6 
-Refer to Figure 2-6.A movement from point H to point K could be caused by

Accepted Answer

A)  unemployment.
B)  a decrease in society's preference for pillows.
C)  fewer resources available for production of pillows.
D)  All of the above are correct.

Question 13

Figure 2-9

-Refer to Figure 2-9,Panel (a) .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.

Question 14

In the circular-flow diagram,which of the following items does not flow from households to firms?

Accepted Answer

A)  revenue
B)  land,labor,and capital
C)  factors of production
D)  profit

Question 15

If an economy is producing efficiently,then

Accepted Answer

A)  there is no way to produce more of one good without producing less of another good.
B)  it is possible to produce more of both goods without increasing the quantities of inputs that are being used.
C)  it is possible to produce more of one good without producing less of another good.
D)  it is not possible to produce more of any good at any cost.

Question 16

Instead of conducting laboratory experiments to generate data to test their theories,economists often

Accepted Answer

A)  ask winners of the Nobel Prize in Economics to evaluate their theories.
B)  argue that data is impossible to collect in economics.
C)  gather data from historical episodes of economic change.
D)  assume that data would support their theories.

Question 17

Figure 2-2 
-Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

Accepted Answer

A)  households and government.
B)  firms and government.
C)  the markets for goods and services and the markets for financial assets.
D)  the markets for goods and services and the markets for factors of production.

Question 18

Figure 2-7 
-Refer to Figure 2-7.Efficient production is represented by which point(s) ?

Accepted Answer

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

Question 19

Which of the following statements about the circular-flow diagram is correct?

Accepted Answer

A)  One must imagine that the economy operates without money in order to make sense of the diagram.
B)  The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
C)  The government cannot be excluded as a decision maker in a circular-flow diagram.
D)  All of the above are correct.

Question 20

Figure 2-6 
-Refer to Figure 2-6.If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows,it could produce

Accepted Answer

A)  120 pillows and 320 blankets.
B)  180 pillows and 180 blankets.
C)  240 pillows and 200 blankets.
D)  We would have to know the details of this economy's technology in order to determine this.

Exam 2: Thinking Like an Economist: The Economist As Scientist

In the circular-flow diagram,which of the following items does not flow from households to firms?

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Efficiency is illustrated by

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Figure 2-9 -Refer to Figure 2-9,Panel (a) .To gain 2 donuts by moving from point L to point M,society must sacrifice

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Figure 2-2 -Refer to Figure 2-2.Boxes C and D of this circular-flow diagram represent

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In economics,capital refers to

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In the circular-flow diagram,

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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 combination of points show production possibilities only achievable with improvements in technology or increases in resources?

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

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Figure 2-6 -Refer to Figure 2-6.If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows,it could produce

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Figure 2-10 -Refer to Figure 2-10,Panel (a) .The movement from point W to point Y could be caused by

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Figure 2-16​ -Refer to Figure 2-16.The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

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Figure 2-7 -Refer to Figure 2-7.Efficient production is represented by which point(s) ?

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If an economy is producing efficiently,then

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Figure 2-5 -Refer to Figure 2-5.The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

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Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of goods and services?

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Production is efficient if the economy is producing at a point

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Figure 2-6 -Refer to Figure 2-6.A movement from point H to point K could be caused by

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Instead of conducting laboratory experiments to generate data to test their theories,economists often

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An economy's production of two goods is efficient if

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Which of the following statements about the circular-flow diagram is correct?

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Figure 2-16 -Refer to Figure 2-16.The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

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