Question 1

Analysis of data on workers and those looking for work is conducted by economists at the

Accepted Answer

A)   Office of Management and Budget.
B)   Department of Labor.
C)   Congressional Budget Office.
D)   Department of the Treasury.E) B) and D)
F) B) and C)

Question 2

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 3

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 soldE) A) and D)
F) All of the above

Question 4

Figure 2-16 
-Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Accepted Answer

A)   The less coffee a person drinks per day, the more time he can go without sleep.
B)   There is no relationship between how much coffee per day a person drinks and how long he can go without sleep.
C)   The more coffee a person drinks per day, the more time he can go without sleep.
D)   The more coffee a person drinks per day, the less time he can go without sleep.E) B) and C)
F) A) and D)

Question 5

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.E) A) and B)
F) None of the above

Question 6

Economists may disagree about the validity of alternative positive theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 7

Economists believe that production possibilities frontiers rarely have a bowed shape.

Accepted Answer

A) True 
 B)False

Question 8

Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

Accepted Answer

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

Question 9

Normative statements are not

Accepted Answer

A)   descriptive.
B)   prescriptive.
C)   claims about how the world should be.
D)   made by economists speaking as policy advisers.E) None of the above
F) C) and D)

Question 10

When income increases the slope of an individual's demand curve, the demand curve

Accepted Answer

A)   turns positive.
B)   becomes undefined.
C)   remains negative.
D)   becomes infinite.E) None of the above
F) All of the above

Question 11

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-23 
-Refer to Figure 2-23. It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about models is correct?

Accepted Answer

A)   The more details a model includes, the better the model.
B)   Models assume away irrelevant details.
C)   Models cannot be used to explain how the economy functions.
D)   Models cannot be used to make predictions.E) B) and D)
F) None of the above

Question 14

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-23 
-Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

Accepted Answer

A) True 
 B)False

Question 16

The field of economics is traditionally divided into two broad subfields,

Accepted Answer

A)   national economics and international economics.
B)   consumer economics and producer economics.
C)   private sector economics and public sector economics.
D)   microeconomics and macroeconomics.E) B) and C)
F) A) and C)

Question 17

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) A) and B)
F) A) and C)

Question 18

Figure 2-8 
-Refer to Figure 2-8. Inefficient production is represented by which point(s) ?

Accepted Answer

A)   K, M
B)   L
C)   L, M
D)   ME) A) and B)
F) B) and C)

Question 19

Which of the following statements about economic models is correct?

Accepted Answer

A)   Economic models are built to mirror reality exactly.
B)   Economic models are useful, but they should not be used for the purpose of improving public policies.
C)   Because economic models omit many details, they allow us to see what is truly important.
D)   Economic models seldom incorporate equations or diagrams.E) All of the above
F) C) and D)

Question 20

The y-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) A) and D)
F) A) and C)

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

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Economists may disagree about the validity of alternative positive theories about how the world works.

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Figure 2-8 -Refer to Figure 2-8. Inefficient production is represented by which point(s) ?

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Is the following a positive or normative statement? The United States government should mandate that every citizen purchases health insurance.

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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When income increases the slope of an individual's demand curve, the demand curve

Correct AnswerverifiedShow Answer

The field of economics is traditionally divided into two broad subfields,

Correct AnswerverifiedShow Answer

The y-coordinate of an ordered pair specifies the

Correct AnswerverifiedShow Answer

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

Correct AnswerverifiedShow Answer

Analysis of data on workers and those looking for work is conducted by economists at the

Correct AnswerverifiedShow Answer

Figure 2-23 -Refer to Figure 2-23. It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Correct AnswerverifiedShow Answer

Economists believe that production possibilities frontiers rarely have a bowed shape.

Correct AnswerverifiedShow Answer

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Correct AnswerverifiedShow Answer

Which of the following statements about economic models is correct?

Correct AnswerverifiedShow Answer

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Correct AnswerverifiedShow Answer

Which of the following statements about models is correct?

Correct AnswerverifiedShow Answer

Normative statements are not

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

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Figure 2-16 -Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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