Question 1

Figure 2-5 
-Refer to Figure 2-5.Suppose this economy is producing at point D.Which of the following statements would best explain this situation?

Accepted Answer

A)  The economy has insufficient resources to produce at a more desirable point.
B)  The economy's available technology prevents it from producing at a more desirable point.
C)  There is widespread unemployment in the economy.
D)  Any of the above statements would be a legitimate explanation for this situation.E) B) and D)
F) None of the above

Question 2

Which two groups of decision makers are included in the simple circular-flow diagram?

Accepted Answer

A)  markets and government
B)  households and government
C)  firms and government
D)  households and firmsE) A) and C)
F) B) and C)

Question 3

Figure 2-2 
-Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

Accepted Answer

A)  firms and households.
B)  households and government.
C)  the markets for goods and services and the markets for financial assets.
D)  the markets for goods and the markets for services.E) A) and B)
F) None of the above

Question 4

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 5

In the markets for factors of production in the circular-flow diagram,

Accepted Answer

A)  households provide firms with labor,land,and capital.
B)  households provide firms with savings for investment.
C)  firms provide households with goods and services.
D)  firms provide households with revenue.E) A) and D)
F) None of the above

Question 6

Economists believe that production possibilities frontiers

Accepted Answer

A)  never have a bowed shape.
B)  rarely have a bowed shape.
C)  often have a bowed shape.
D)  always have a bowed shape.E) A) and B)
F) None of the above

Question 7

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two
-Refer to Figure 2-14.If this economy devotes all of its available resources to producing apples,then it will produce

Accepted Answer

A)  0 bushels of apples and 200 sweaters.
B)  80 bushels of apples and 160 sweaters
C)  180 bushels of apples and 200 sweaters.
D)  180 bushels of apples and 0 sweaters.E) A) and B)
F) A) and C)

Question 8

Figure 2-10

-Refer to Figure 2-10,Panel (a) .Production is

Accepted Answer

A)  possible at points V,W,Y,and Z,but efficient only at points V,W,and Z.
B)  possible at points V,W,Y,and Z,but efficient only at point Y.
C)  possible at points U,V,W,and Z,but efficient only at points V,W,and Z.
D)  possible at points U,V,W,and Z,but efficient only at point U.E) A) and D)
F) A) and C)

Question 9

Suppose a nation is currently producing at a point inside its production possibilities frontier.We know that

Accepted Answer

A)  the nation is producing beyond its capacity,so inflation will occur.
B)  the nation is not using all available resources or is using inferior technology or both.
C)  the nation is producing an efficient combination of goods.
D)  there will be a large opportunity cost if the nation tries to increase production of any good.E) A) and B)
F) All of the above

Question 10

In the circular-flow diagram,which of the following is not a factor of production?

Accepted Answer

A)  labor
B)  land
C)  capital
D)  moneyE) A) and D)
F) All of the above

Question 11

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)  should produce.
B)  wants to produce.
C)  can produce.
D)  demands.E) B) and C)
F) C) and D)

Question 12

Figure 2-5 
-Refer to Figure 2-5.It is possible for this economy to produce

Accepted Answer

A)  60 dryers and 50 washers.
B)  60 dryers and 60 washers.
C)  80 dryers and 50 washers.
D)  All of the above.E) A) and C)
F) All of the above

Question 13

Macroeconomics is the study of

Accepted Answer

A)  individual decision makers.
B)  international trade.
C)  economy-wide phenomena.
D)  markets for large products.E) B) and C)
F) A) and B)

Question 14

Figure 2-6 
-Refer to Figure 2-6.If this economy devotes all of its resources to the production of blankets,then it will produce

Accepted Answer

A)  0 blankets and 360 pillows.
B)  200 blankets and 240 pillows.
C)  320 blankets and 120 pillows.
D)  360 blankets and 0 pillows.E) A) and C)
F) None of the above

Question 15

Figure 2-16​ 
-Refer to Figure 2-16.Inefficient production is represented by which point(s) ?

Accepted Answer

A)  A,C
B)  B,C
C)  B,E
D)  DE) B) and D)
F) All of the above

Question 16

Figure 2-4 
-Refer to Figure 2-4.This economy cannot produce at which point(s) ?

Accepted Answer

A)  Q
B)  Q,S
C)  Q,S,T
D)  SE) C) and D)
F) B) and D)

Question 17

In the markets for the factors of production in the circular-flow diagram,

Accepted Answer

A)  households are sellers and firms are buyers.
B)  households are buyers and firms are sellers.
C)  households and firms are both buyers.
D)  households and firms are both sellers.E) A) and C)
F) A) and B)

Question 18

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two
-Refer to Figure 2-14.The opportunity cost of moving from point U to point R is

Accepted Answer

A)  60 bushels of apples.
B)  80 bushels of apples.
C)  80 sweaters.
D)  160 sweaters.E) B) and C)
F) C) and D)

Question 19

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

Question 20

Economists make assumptions to

Accepted Answer

A)  provide issues for political discussion.
B)  make a complex world easier to understand.
C)  make it easier to teach economic concepts and analysis.
D)  create policy alternatives that are incomplete or subject to criticism.E) A) and B)
F) B) and C)

Exam 2: Thinking Like an Economist: The Economist As Scientist

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.If this economy devotes all of its available resources to producing apples,then it will produce

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In the markets for factors of production in the circular-flow diagram,

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Figure 2-10 -Refer to Figure 2-10,Panel (a) .Production is

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Figure 2-5 -Refer to Figure 2-5.Suppose this economy is producing at point D.Which of the following statements would best explain this situation?

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Economists believe that production possibilities frontiers

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In the circular-flow diagram,which of the following is not a factor of production?

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The production possibilities frontier is a graph that shows the various combinations of output that an economy

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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

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In the markets for the factors of production in the circular-flow diagram,

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Economists make assumptions to

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Figure 2-2 -Refer to Figure 2-2.Boxes A and B of this circular-flow diagram represent

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Economic models are built with

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Which two groups of decision makers are included in the simple circular-flow diagram?

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Figure 2-16​ -Refer to Figure 2-16.Inefficient production is represented by which point(s) ?

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Figure 2-6 -Refer to Figure 2-6.If this economy devotes all of its resources to the production of blankets,then it will produce

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Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two -Refer to Figure 2-14.The opportunity cost of moving from point U to point R is

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Suppose a nation is currently producing at a point inside its production possibilities frontier.We know that

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Figure 2-5 -Refer to Figure 2-5.It is possible for this economy to produce

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Macroeconomics is the study of

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Figure 2-4 -Refer to Figure 2-4.This economy cannot produce at which point(s) ?

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Figure 2-16 -Refer to Figure 2-16.Inefficient production is represented by which point(s) ?

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