Question 1

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 2

Table 2-3
Production Possibilities for Footville
 
-Refer to Table 2-3. Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of an additional 200 shoes is constant at 200 socks.
B)   The opportunity cost of an additional 200 shoes is constant at 300 socks.
C)   Footville's production possibilities frontier is a straight, downward­sloping line.
D)   The opportunity cost of an additional 200 shoes increases as more socks are produced.

Question 3

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Accepted Answer

A)   rotation of the curve.
B)   shift of the curve.
C)   movement along the curve.
D)   change in the slope of the curve.

Question 4

Figure 2-23 
-Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

Accepted Answer

A) True 
 B)False

Question 5

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

The answer of Is the following a positive or normative...

Question 6

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.

Question 7

Economists use some familiar terms in specialized ways

Accepted Answer

A)   to make the subject sound more complex than it is.
B)   because every respectable field of study has its own language.
C)   to provide a new and useful way of thinking about the world.
D)   because it was too difficult to come up with new terms.

Question 8

Which of the following steps does an economist take when studying the economy?

Accepted Answer

A)   devise theories
B)   collect data
C)   analyze data
D)   All of the above are correct.

Question 9

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

Question 10

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 11

Figure 2-7 
-Refer to Figure 2-7. This economy cannot produce at which points) ?

Accepted Answer

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

Question 12

The nation's antitrust laws are enforced by economists at the Department of

Accepted Answer

A)   Labor.
B)   Health and Human Services.
C)   Justice.
D)   Treasury.

Question 13

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 14

Microeconomics is the study of

Accepted Answer

A)   how money affects the economy.
B)   how individual households and firms make decisions.
C)   how government affects the economy.
D)   how the economy as a whole works.

Question 15

Figure 2-23 
-Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a capital input?

Accepted Answer

A)   a computer
B)   a share of stock
C)   an hour of a worker's time
D)   $50,000

Question 17

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

Accepted Answer

The answer of Figure 2-3 
-Refer to Figure 2-3. What...

Question 18

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 19

A relatively steep demand curve indicates that

Accepted Answer

A)   quantity demanded will adjust only slightly to a price change.
B)   quantity demanded will adjust significantly to a price change.
C)   quantity demanded will not adjust to a price change.
D)   the change in quantity demanded will exactly equal a change in price.

Question 20

In the circular-flow diagram, another name for goods and services produced by firms is

Accepted Answer

A)   factors of production.
B)   output.
C)   inputs.
D)   resources.

Exam 2: Thinking Like an Economist

In the circular-flow diagram, another name for goods and services produced by firms is

Correct AnswerverifiedShow Answer

Microeconomics is the study of

Correct AnswerverifiedShow Answer

A relatively steep demand curve indicates that

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Economists use some familiar terms in specialized ways

Correct AnswerverifiedShow Answer

Which of the following steps does an economist take when studying the economy?

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 75 doghouses.

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

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Which of the following is an example of a capital input?

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The nation's antitrust laws are enforced by economists at the Department of

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Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. Which of the following statements is correct?

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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 AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which points) ?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Correct AnswerverifiedShow Answer

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