Question 1

In building economic models, economists often omit

Accepted Answer

A)   assumptions.
B)   theories.
C)   details.
D)   equations.

Question 2

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 3

Which of the following statements is correct?

Accepted Answer

A)   Few economic models incorporate assumptions.
B)   Different economic models employ different sets of assumptions.
C)   Good economic models attempt to mimic reality as closely as possible.
D)   Economic models, to be accepted, must be tested by conducting experiments.

Question 4

Figure 2-12 
-Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

Accepted Answer

A)   a downturn in the economy.
B)   economic growth.
C)   an enhancement of equality.
D)   an improvement in the allocation of resources.

Question 5

A duty of economists at the Department of Labor is to

Accepted Answer

A)   analyze data on workers.
B)   schedule federal holidays.
C)   enforce the nation's antitrust laws.
D)   All of the above are correct.

Question 6

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.

Question 7

Economists build economic models by

Accepted Answer

A)   generating data.
B)   conducting controlled experiments in a lab.
C)   making assumptions.
D)   reviewing statistical forecasts.

Question 8

Figure 2-10
Panel a)  Panel b) 
  
-Refer to Figure 2-10, Panel a) . Production is

Accepted Answer

A)   possible at points V, W, Y, and Z, but efficient only at points V, W, and Z.
B)   possible at points V, W, Y, and Z, but efficient only at point Y.
C)   possible at points U, V, W, and Z, but efficient only at points V, W, and Z.
D)   possible at points U, V, W, and Z, but efficient only at point U.

Question 9

What type of statement is a prescriptive statement about how the world ought to be?

Accepted Answer

The answer of What type of statement is a prescriptive...

Question 10

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

Accepted Answer

flow of in...

Question 11

Figure 2-22 
-Refer to Figure 2-22. What are the coordinates of point C?

Accepted Answer

The answer of Figure 2-22 
-Refer to Figure 2-22. What...

Question 12

A macroeconomist - as opposed to a microeconomist - might study the effect of

Accepted Answer

A)   changes in the money supply on the inflation rate.
B)   an increase in the gas tax on fuel consumption.
C)   a technological advance on the natural gas industry.
D)   a hurricane on prices in the orange industry.

Question 13

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 14

Which of the following statements applies to economics, as well as to other sciences such as physics?

Accepted Answer

A)   Experiments are considered valid only when they are conducted in a laboratory.
B)   Good theories do not need to be tested.
C)   Real-world observations often lead to theories.
D)   Economics, as well as other sciences, is concerned primarily with abstract concepts.

Question 15

The scientific method is

Accepted Answer

A)   the use of modern technology to understand the way the world works.
B)   the use of controlled laboratory experiments to understand the way the world works.
C)   the dispassionate development and testing of theories about how the world works.
D)   the search for evidence to support preconceived theories about how the world works.

Question 16

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 17

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.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 points) on the graph show unemployment of resources?

Accepted Answer

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

Question 20

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

Accepted Answer

A)   Following the most recent recession, the economy is recovering at a slower than usual pace.
B)   To stimulate the economy during the most recent recession, the federal government increased spending.
C)   In response to the most recent recession, the federal government extended the duration of unemployment benefits.
D)   The federal government's responses to the most recent recession were insufficient.

Exam 2: Thinking Like an Economist

Which of the following statements applies to economics, as well as to other sciences such as physics?

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What type of statement is a prescriptive statement about how the world ought to be?

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In building economic models, economists often omit

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 points) on the graph show unemployment of resources?

Correct AnswerverifiedShow Answer

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a) . Production 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

The scientific method is

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

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A duty of economists at the Department of Labor is to

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

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Economists build economic models by

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

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

Correct Answerverifiedflow of in...View AnswerShow Answer

An economy's production of two goods is efficient if

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Which of the following statements is correct?

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A macroeconomist - as opposed to a microeconomist - might study the effect of

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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.

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Figure 2-22 -Refer to Figure 2-22. What are the coordinates of point C?

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Figure 2-12 -Refer to Figure 2-12. The shift of the production possibilities frontier from A to B can best be described as

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flow of in...
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