Question 1

Points on the production possibilities frontier represent efficient levels of production.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-10
Panel (a) 
Panel (b)   
-Refer to Figure 2-10, Panel (a) . To gain 2 tractors by moving from point W to point V, society must sacrifice

Accepted Answer

A)  12 sofas.
B)  employment.
C)  efficiency.
D)  More than one of the above is correct.E) C) and D)
F) A) and C)

Question 3

In the circular-flow diagram,

Accepted Answer

A)  firms are buyers in the markets for goods and services.
B)  households are sellers in the markets for the factors of production.
C)  firms are sellers in the markets for factors of production and in the markets for goods and services.
D)  dollars that are spent on goods and services flow directly from firms to households.E) A) and D)
F) B) and C)

Question 4

In the simple circular-flow diagram, who buys the factors of production?

Accepted Answer

A)  households only
B)  firms only
C)  both households and firms
D)  neither households nor firmsE) None of the above
F) B) and C)

Question 5

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. A movement from point A to point Z is called

Accepted Answer

A)  a shift in demand.
B)  a movement along the demand curve.
C)  a shift in supply.
D)  a movement along the supply curve.E) A) and B)
F) C) and D)

Question 6

Figure 2-5 
-Refer to Figure 2-5. Inefficient production is represented by which point(s) ?

Accepted Answer

A)  A, B
B)  C
C)  C, D
D)  DE) None of the above
F) C) and D)

Question 7

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)  $50,000E) All of the above
F) B) and C)

Question 8

Figure 2-7 
-Refer to Figure 2-7. Efficient production is represented by which point(s) ?

Accepted Answer

A)  L, M
B)  L, M, N, P, Q
C)  N, O, P
D)  QE) None of the above
F) A) and C)

Question 9

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2-1 
-Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

Accepted Answer

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

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)  can only show variables that are positively related.
B)  can only show variables that have a negative correlation.
C)  provide information on only one variable.
D)  provide information on no more than two variables.E) B) and C)
F) A) and B)

Question 13

Almost all economists agree that local and state governments should

Accepted Answer

A)  eliminate subsidies to professional sports franchises.
B)  increase subsidies to professional sports franchises.
C)  copy economic policy from Washington, D.C.
D)  prevent companies from outsourcing work.E) A) and D)
F) A) and C)

Question 14

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 15

In the circular-flow diagram, factors of production are the goods and services produced by firms.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-3 
-Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

Accepted Answer

A)  revenue
B)  goods and services sold
C)  factors of production
D)  labor, land, and capitalE) B) and C)
F) C) and D)

Question 17

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

Accepted Answer

A) True 
 B)False

Question 18

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Accepted Answer

A)  households
B)  firms
C)  government
D)  markets for factors of productionE) A) and B)
F) A) and C)

Question 19

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.E) C) and D)
F) A) and C)

Question 20

Economists at which of the following offices help formulate spending plans and regulatory policies?

Accepted Answer

A)  Office of Management and Budget
B)  Department of the Treasury
C)  Congressional Budget Office
D)  The Federal ReserveE) A) and C)
F) A) and B)

Exam 2: Thinking Like an Economist

Almost all economists agree that local and state governments should

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The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

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Figure 2-3 -Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

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In the circular-flow diagram,

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Points on the production possibilities frontier represent efficient levels of production.

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Figure 2-7 -Refer to Figure 2-7. Efficient production is represented by which point(s) ?

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

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Economists at which of the following offices help formulate spending plans and regulatory policies?

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Which of the following statements is correct?

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

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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . To gain 2 tractors by moving from point W to point V, society must sacrifice

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Graphs such as bar graphs and pie charts are limited in that they

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Figure 2-5 -Refer to Figure 2-5. Inefficient production is represented by which point(s) ?

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In the simple circular-flow diagram, who buys the factors of production?

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In the circular-flow diagram, factors of production are the goods and services produced by firms.

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The President counts among his economic advisors the Congressional Budget Office.

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Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. A movement from point A to point Z is called

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Two variables that have a negative correlation move in opposite directions.

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Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

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Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

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