Question 1

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Accepted Answer

A)   the effect of an increase in the cigarette tax on smokers
B)   the effect of foreign competition on the domestic textile industry
C)   the effect of a war on automobile prices
D)   the effect of an increase in the minimum wage on an economy's overall rate of unemploymentE) None of the above
F) A) and D)

Question 3

The president of the United States receives tax policy advice from economists in the

Accepted Answer

A)   Federal Reserve.
B)   Department of Justice.
C)   Department of the Treasury.
D)   Congressional Budget Office.E) B) and D)
F) B) and C)

Question 4

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 5

Figure 2-2 
-Refer to Figure 2-2.Alisha regularly buys fruits and vegetables at a grocery store.Santo regularly pays a lawn-care company to mow his lawn.If the flow of fruits and vegetables from the grocery store to Alisha is represented by an arrow from Box C to Box B of this circular-flow diagram,then the money paid by Santo to the lawn-care company is represented by an arrow

Accepted Answer

A)   from Box A to Box D.
B)   from Box B to Box C.
C)   from Box C to Box B.
D)   from Box D to Box A.E) None of the above
F) All of the above

Question 6

When economists are trying to explain the world,they are

Accepted Answer

A)   scientists.
B)   policy advisers.
C)   in the realm of microeconomics rather than macroeconomics.
D)   in the realm of normative economics rather than positive economics.E) All of the above
F) B) and C)

Question 7

A relatively flat 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.E) A) and B)
F) All of the above

Question 8

When a production possibilities frontier is bowed outward,the opportunity cost of the first good in terms of the second good is higher when the economy is producing much of the second good and little of the first good than it is when the economy is producing little of the second good and much of the first good.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)   the effect of foreign direct investment on economic growth
B)   the effect of a sales tax on the cigarette industry
C)   the effect of an investment tax credit on the economy's capital stock
D)   the effect of a war on government spendingE) None of the above
F) A) and C)

Question 10

In the circular-flow diagram,factors of production include land,labor,and capital.

Accepted Answer

A) True 
 B)False

Question 11

Points inside the production possibilities frontier represent inefficient levels of production.

Accepted Answer

A) True 
 B)False

Question 12

When economists make positive statements,they are

Accepted Answer

A)   speaking as scientists.
B)   speaking as policy advisers.
C)   making claims about how the world should be.
D)   revealing that they are very conservative in their views of how the world works.E) B) and C)
F) All of the above

Question 13

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 14

In the circular-flow diagram,

Accepted Answer

A)   firms own the factors of production.
B)   the factors of production are labor,land,and capital.
C)   the factors of production are also called "output."
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)   would likely be made by an economist acting as a policy advisor.
B)   would require values and data in order to be evaluated.
C)   would require data but not values in order to be evaluated.
D)   could not be evaluated by economists acting as scientists.E) A) and B)
F) C) and D)

Question 17

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)   using all of the scarce resources it has available.
B)   conserving on resources,rather than using all available resources.
C)   getting all it can get from the scarce resources it has available.
D)   able to produce more than what is currently being produced without additional resources.E) None of the above
F) All of the above

Question 18

Suppose an economy produces two goods,food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 50 units of food and 30 machines.This year,it is producing 55 units of food and 33 machines.Which of the following events could not explain the increase in output?

Accepted Answer

A)   a reduction in unemployment
B)   an increase in available labor
C)   an improvement in technology
D)   Any of these events could explain the increase in output.E) C) and D)
F) A) and B)

Question 19

A model can be accurately described as a

Accepted Answer

A)   theoretical abstraction with very little value.
B)   device that is useful only to the people who created it.
C)   realistic and carefully constructed theory.
D)   simplification of reality.E) A) and B)
F) A) and C)

Question 20

In the simple circular-flow diagram,households

Accepted Answer

A)   are the only decision makers.
B)   own the factors of production.
C)   are buyers of inputs.
D)   consume only some of the goods and services that firms produce.E) None of the above
F) A) and C)

Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Correct Answer
verified

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Correct Answer
verified

In the simple circular-flow diagram,households

Correct Answer
verified

A relatively flat demand curve indicates that

Correct Answer
verified

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

Correct Answer
verified

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct Answer
verified

The president of the United States receives tax policy advice from economists in the

Correct Answer
verified

Points inside the production possibilities frontier represent inefficient levels of production.

Correct Answer
verified

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 Answer
verified

A model can be accurately described as a

Correct Answer
verified

An economic outcome is said to be efficient if the economy is

Correct Answer
verified

Correct Answer
verified

When economists make positive statements,they are

Correct Answer
verified

In the circular-flow diagram,factors of production include land,labor,and capital.

Correct Answer
verified

When economists are trying to explain the world,they are

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Correct AnswerverifiedShow Answer

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram,households

Correct AnswerverifiedShow Answer

A relatively flat demand curve indicates that

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

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct AnswerverifiedShow Answer

The president of the United States receives tax policy advice from economists in the

Correct AnswerverifiedShow Answer

Points inside the production possibilities frontier represent inefficient levels of production.

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

A model can be accurately described as a

Correct AnswerverifiedShow Answer

An economic outcome is said to be efficient if the economy is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When economists make positive statements,they are

Correct AnswerverifiedShow Answer

In the circular-flow diagram,factors of production include land,labor,and capital.

Correct AnswerverifiedShow Answer

When economists are trying to explain the world,they are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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