Question 1

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-6
 
-Refer to Figure 2-6. Efficient production is represented by which point(s) ?

Accepted Answer

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

Question 3

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

Accepted Answer

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

Question 4

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) B) and C)
F) None of the above

Question 5

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

Question 6

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Accepted Answer

A) True 
 B)False

Question 7

The slope of a fairly flat upward-sloping line will be a

Accepted Answer

A)   small positive number.
B)   large positive number.
C)   small negative number.
D)   large negative number.E) All of the above
F) A) and D)

Question 8

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) B) and C)
F) None of the above

Question 9

On a bowed production possibilities frontier, as you move down along the curve

Accepted Answer

A)   more of one good must be given up to receive one unit of the other good.
B)   the available production technology does not change.
C)   the opportunity cost increases.
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 10

Which of the following is correct?

Accepted Answer

A)   A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)   A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)   A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)   A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) B) and D)
F) A) and C)

Question 11

Figure 2-4
 
-Refer to Figure 2-4. Suppose this economy is producing at point W. Which of the following statements would best explain this situation?

Accepted Answer

A)   The economy lacks the 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) C) and D)
F) A) and C)

Question 12

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Accepted Answer

A)   have no questions but hundreds of answers.
B)   have 100 questions and 3,000 answers.
C)   have 1,000 questions but no answers.
D)   never produce a winner.E) B) and D)
F) B) and C)

Question 13

The slope of a line that passes through the points (15, 10)  and (7, 30)  is

Accepted Answer

A)   -5/2.
B)   -2/5.
C)   2/5.
D)   5/2.E) None of the above
F) All of the above

Question 14

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)   at which very few excel.
B)   but not as easy as philosophy or the pure sciences.
C)   which very few can enjoy.
D)   which deals primarily with common sense.E) B) and C)
F) A) and B)

Question 15

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)   One economist believes income tax cuts are unfair to those with low incomes; another economist believes income tax cuts are not unfair to those with low incomes.
B)   One economist believes unemployment causes more human suffering than does inflation; another economist believes inflation causes more human suffering than does unemployment.
C)   One economist believes the policies of the Democratic party offer the best hope for America's future; another economist believes the policies of the Republican party offer the best hope for America's future.
D)   One economist believes increases in the minimum wage increase unemployment; another economist believes increases in the minimum wage do not increase unemployment.E) None of the above
F) A) and B)

Question 16

In conducting their research, economists often substitute historical events and historical episodes for

Accepted Answer

A)   theories and observations.
B)   laboratory experiments.
C)   models.
D)   assumptions.E) None of the above
F) A) and C)

Question 17

When two variables have a positive 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 variables' values are never negative.E) None of the above
F) All of the above

Question 18

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 profit.E) All of the above
F) A) and C)

Question 19

The two loops in the circular-flow diagram represent

Accepted Answer

A)   the flow of goods and the flow of services.
B)   the flow of dollars and the flow of financial assets.
C)   the flow of inputs into production processes and the flow of outputs from production processes.
D)   the flows of inputs and outputs and the flow of dollars.E) A) and B)
F) A) and C)

Question 20

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) None of the above
F) All of the above

Exam 2: Thinking Like an Economist

Which of the following is correct?

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

Correct AnswerverifiedShow Answer

On a bowed production possibilities frontier, as you move down along the curve

Correct AnswerverifiedShow Answer

John Maynard Keynes referred to economics as an easy subject,

Correct AnswerverifiedShow Answer

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Correct AnswerverifiedShow Answer

The y-coordinate of an ordered pair specifies the

Correct AnswerverifiedShow Answer

The slope of a line that passes through the points (15, 10) and (7, 30) is

Correct AnswerverifiedShow Answer

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

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

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The two loops in the circular-flow diagram represent

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Figure 2-4 -Refer to Figure 2-4. Suppose this economy is producing at point W. Which of the following statements would best explain this situation?

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In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

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President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

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In conducting their research, economists often substitute historical events and historical episodes for

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Correct AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The slope of a fairly flat upward-sloping line will be a

Correct AnswerverifiedShow Answer

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