Question 1

Another term for factors of production is

Accepted Answer

A)  inputs.
B)  output.
C)  goods.
D)  services.E) B) and D)
F) A) and C)

Question 2

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A)  Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future.
B)  Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.
C)  Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation.
D)  Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.E) B) and C)
F) None of the above

Question 3

A production possibilities frontier that is a straight line shows

Accepted Answer

A)  a truer picture of the real world than does a bowed-out production possibilities frontier.
B)  that resources can be shifted easily and seamlessly from the production of one good to the production of a different good.
C)  that the opportunity cost of one good in terms of another good depends on the quantities of the two goods that the economy is producing.
D)  All of the above are correct.E) A) and D)
F) None of the above

Question 4

Figure 2-3
 
-Refer to Figure 2-3.The economy has the ability to produce at which point or points?

Accepted Answer

A)  B, D, E
B)  A, B, D, E
C)  D, C
D)  DE) A) and B)
F) A) and C)

Question 5

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.E) None of the above
F) All of the above

Question 6

Economic models are built with

Accepted Answer

A)  recommendations concerning public policies.
B)  facts about the legal system.
C)  assumptions.
D)  statistical forecasts.E) A) and B)
F) B) and C)

Question 7

Figure 2-5
 
-Refer to Figure 2-5.Which of the following events would explain the shift of the production possibilities frontier from A to B?

Accepted Answer

A)  The economy experienced a technological advance in the production of batteries.
B)  The economy's citizens developed an enhanced taste for batteries.
C)  More capital became available in the economy.
D)  More labor became available in the economy.E) None of the above
F) A) and B)

Question 8

When two variables have a negative correlation,

Accepted Answer

A)  they tend to move in opposite directions.
B)  they tend to move in the same direction.
C)  one variable will move while the other remains constant.
D)  the movement of the two variables is unpredictable.E) All of the above
F) C) and D)

Question 9

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)  negative economic statement.
B)  positive economic statement.
C)  normative economic statement.
D)  statement that contradicts one of the basic principles of economics.E) A) and B)
F) B) and D)

Question 10

Which of the following statements are positive,and which are normative?
a.The minimum wage creates unemployment among young and unskilled workers.
b.The minimum wage ought to be abolished.
c.If the price of a product in a market decreases, other things equal, quantity demanded will increase.
d.A little bit of inflation is worse for society than a little bit of unemployment.
e.There is a tradeoff between inflation and unemployment in the short run.
f.If consumer income increases, other things equal, the demand for automobiles will increase.
g.The U.S.income distribution is not equitable.
h.U.S.workers deserve more liberal unemployment benefits.
i.If interest rates increase, investment will decrease.
j.If welfare benefits were reduced, the country would be better off.

Accepted Answer

a,c,e,f,and i are po...

Question 11

A demand curve shows the relationship

Accepted Answer

A)  between income and quantity demanded.
B)  between price and income.
C)  between price and quantity demanded.
D)  among income, price, and quantity demanded.E) C) and D)
F) B) and D)

Question 12

The 1973 war in the Middle East provided economists with the opportunity to observe the negative relationship between

Accepted Answer

A)  oil prices and living standards.
B)  military buildups and government spending.
C)  the flow of crude oil and living standards.
D)  the flow of crude oil and political power.E) A) and C)
F) A) and D)

Question 13

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

Accepted Answer

A)  using all of the 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) A) and C)
F) B) and D)

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, are concerned primarily with abstract concepts.E) B) and C)
F) A) and D)

Question 15

The country of Econoland produces two goods,textbooks and widgets.Last year it produced 200 textbooks and 500 widgets.This year it produced 250 textbooks and 600 widgets.Given no other information,which of the following events could not explain this change?

Accepted Answer

A)  Econoland experienced a reduction in unemployment.
B)  Econoland experienced an improvement in widget-making technology.
C)  Econoland acquired more resources.
D)  Any of these events could, in fact, explain the change.E) A) and D)
F) A) and C)

Question 16

Robert McTeer,the former President of the Federal Reserve Bank of Dallas,asserted in a commencement address that the study of economics

Accepted Answer

A)  is more beneficial to those who are just starting their careers than to those who have moved up the career ladder.
B)  helps students understand fallacies and unintended consequences.
C)  has an unintended consequence itself, and it is that even serious students of economics usually fall for the broken window fallacy.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 17

Figure 2-11
 
-Refer to Figure 2-11.The opportunity cost of more doghouses increases as more doghouses are produced.

Accepted Answer

A) True 
 B)False

Question 18

Economic models

Accepted Answer

A)  cannot be useful if they are based on false assumptions.
B)  were once thought to be useful, but that is no longer true.
C)  must incorporate all aspects of the economy if those models are to be useful.
D)  can be useful, even if they are not particularly realistic.E) A) and C)
F) A) and D)

Question 19

Two variables that are negatively related will move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 20

Who said,"The whole of science is nothing more than the refinement of everyday thinking?"

Accepted Answer

A)  Isaac Newton
B)  Albert Einstein
C)  Sigmund Freud
D)  Benjamin FranklinE) A) and C)
F) A) and D)

Exam 2: Thinking Like an Economist

Who said,"The whole of science is nothing more than the refinement of everyday thinking?"

Correct Answer
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Figure 2-3 -Refer to Figure 2-3.The economy has the ability to produce at which point or points?

Correct Answer
verified

"Prices rise when the quantity of money rises rapidly" is an example of a

Correct Answer
verified

Economic models are built with

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Two variables that are negatively related will move in opposite directions.

Correct Answer
verified

Economic models

Correct Answer
verified

The 1973 war in the Middle East provided economists with the opportunity to observe the negative relationship between

Correct Answer
verified

Another term for factors of production is

Correct Answer
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Figure 2-5 -Refer to Figure 2-5.Which of the following events would explain the shift of the production possibilities frontier from A to B?

Correct Answer
verified

One way to characterize the difference between positive statements and normative statements is as follows:

Correct Answer
verified

Figure 2-11 -Refer to Figure 2-11.The opportunity cost of more doghouses increases as more doghouses are produced.

Correct Answer
verified

Correct Answer
verified
a,c,e,f,and i are po...
View Answer

Robert McTeer,the former President of the Federal Reserve Bank of Dallas,asserted in a commencement address that the study of economics

Correct Answer
verified

A demand curve shows the relationship

Correct Answer
verified

Production is efficient if the economy is producing at a point

Correct Answer
verified

The country of Econoland produces two goods,textbooks and widgets.Last year it produced 200 textbooks and 500 widgets.This year it produced 250 textbooks and 600 widgets.Given no other information,which of the following events could not explain this change?

Correct Answer
verified

When two variables have a negative correlation,

Correct Answer
verified

A production possibilities frontier that is a straight line shows

Correct Answer
verified

Exam 2: Thinking Like an Economist

Who said,"The whole of science is nothing more than the refinement of everyday thinking?"

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3.The economy has the ability to produce at which point or points?

Correct AnswerverifiedShow Answer

"Prices rise when the quantity of money rises rapidly" is an example of a

Correct AnswerverifiedShow Answer

Economic models are built with

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Two variables that are negatively related will move in opposite directions.

Correct AnswerverifiedShow Answer

Economic models

Correct AnswerverifiedShow Answer

The 1973 war in the Middle East provided economists with the opportunity to observe the negative relationship between

Correct AnswerverifiedShow Answer

Another term for factors of production is

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5.Which of the following events would explain the shift of the production possibilities frontier from A to B?

Correct AnswerverifiedShow Answer

One way to characterize the difference between positive statements and normative statements is as follows:

Correct AnswerverifiedShow Answer

Figure 2-11 -Refer to Figure 2-11.The opportunity cost of more doghouses increases as more doghouses are produced.

Correct AnswerverifiedShow Answer

Correct Answerverifieda,c,e,f,and i are po...View AnswerShow Answer

Robert McTeer,the former President of the Federal Reserve Bank of Dallas,asserted in a commencement address that the study of economics

Correct AnswerverifiedShow Answer

A demand curve shows the relationship

Correct AnswerverifiedShow Answer

Production is efficient if the economy is producing at a point

Correct AnswerverifiedShow Answer

The country of Econoland produces two goods,textbooks and widgets.Last year it produced 200 textbooks and 500 widgets.This year it produced 250 textbooks and 600 widgets.Given no other information,which of the following events could not explain this change?

Correct AnswerverifiedShow Answer

When two variables have a negative correlation,

Correct AnswerverifiedShow Answer

A production possibilities frontier that is a straight line shows

Correct AnswerverifiedShow Answer

Correct Answer
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a,c,e,f,and i are po...
View Answer

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