Question 1

In the simple circular-flow diagram,

Accepted Answer

A)  households own the factors of production.
B)  households buy all the goods and services that firms produce.
C)  land, labor, and capital flow from households to firms.
D)  All of the above are correct.E) None of the above
F) A) and B)

Question 2

In the ordered pair (20, 30) , 20 is the

Accepted Answer

A)  the x-coordinate.
B)  the horizontal location of the point.
C)  the y-coordinate.
D)  Both a and b are correct.E) A) and B)
F) All of the above

Question 3

Figure 2-2 
-Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

Accepted Answer

A)  the flow of factors of production is also part of what is represented by the inner loop.
B)  the flow of income paid to households is also part of what is represented by the inner loop.
C)  the flow of revenue to firms is also part of what is represented by the inner loop.
D)  households must be sellers of output.E) B) and C)
F) A) and D)

Question 4

In the ordered pair (5, 3) , 3 is the

Accepted Answer

A)  horizontal location of the point.
B)  the slope.
C)  the x-coordinate.
D)  the y-coordinate.E) A) and B)
F) A) and C)

Question 5

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 6

When an economist evaluates a positive statement, he or she is primarily

Accepted Answer

A)  examining evidence.
B)  acting as a scientist.
C)  concerned with verifying how the world is.
D)  All of the above are correct.E) All of the above
F) C) and D)

Question 7

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Accepted Answer

land, labo...

Question 8

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a) . The opportunity cost of moving from point M to point L is

Accepted Answer

A)  2 donuts.
B)  2 donuts and 4 cups of coffee.
C)  4 donuts.
D)  4 cups of coffee.E) A) and D)
F) B) and C)

Question 9

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

Accepted Answer

A)  The economy experiences economic growth.
B)  There is a technological advance in the toy industry, but the greeting card industry experiences no such advance.
C)  There is a technological advance in the greeting card industry, but the toy industry experiences no such advance.
D)  All of the above are correct.E) B) and C)
F) C) and D)

Question 10

A model that shows how dollars flow through markets among households and firms is called the

Accepted Answer

A)  production possibilities frontier.
B)  circular-flow diagram.
C)  demand and supply diagram.
D)  comparative advantage model.E) B) and D)
F) B) and C)

Question 11

In principle, we can

Accepted Answer

A)  ignore positive statements when choosing among various public policy alternatives.
B)  ignore normative statements when choosing among various public policy alternatives.
C)  confirm or refute positive statements by examining evidence.
D)  confirm or refute normative statements by examining evidence.E) A) and D)
F) None of the above

Question 12

Economists regard events from the past as

Accepted Answer

A)  irrelevant, since history is unlikely to repeat itself.
B)  of limited interest, since those events seldom provide any useful economic data.
C)  interesting but not particularly valuable, since those events cannot be used to evaluate present-day economic theories.
D)  interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future.E) B) and C)
F) A) and D)

Question 13

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

Question 14

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Accepted Answer

A) True 
 B)False

Question 15

A statement describing how the world should be

Accepted Answer

A)  is a normative statement.
B)  is a positive statement.
C)  would only be made by an economist speaking as a scientist.
D)  would only be made by an economist employed by the government.E) C) and D)
F) B) and D)

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

Question 17

Figure 2-10
Panel (a) 
Panel (b)   
-Refer to Figure 2-10, Panel (a) . Production at point Y is

Accepted Answer

A)  impossible and inefficient.
B)  impossible but efficient.
C)  possible but inefficient.
D)  possible and efficient.E) A) and D)
F) All of the above

Question 18

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 19

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

A statement describing how the world should be

Correct Answer
verified

Economists regard events from the past as

Correct Answer
verified

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Correct Answer
verified

Correct Answer
verified

A model that shows how dollars flow through markets among households and firms is called the

Correct Answer
verified

In the ordered pair (20, 30) , 20 is the

Correct Answer
verified

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

Correct Answer
verified

When an economist evaluates a positive statement, he or she is primarily

Correct Answer
verified

In the simple circular-flow diagram,

Correct Answer
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Figure 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

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

Correct Answer
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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production at point Y is

Correct Answer
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Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Correct Answer
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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

Correct Answer
verified

In the ordered pair (5, 3) , 3 is the

Correct Answer
verified

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Correct Answer
verified

In principle, we can

Correct Answer
verified

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Correct Answer
verified
land, labo...
View Answer

Unemployment causes production levels to be inefficient.

Correct Answer
verified

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of moving from point M to point L is

Correct Answer
verified

Exam 2: Thinking Like an Economist

A statement describing how the world should be

Correct AnswerverifiedShow Answer

Economists regard events from the past as

Correct AnswerverifiedShow Answer

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A model that shows how dollars flow through markets among households and firms is called the

Correct AnswerverifiedShow Answer

In the ordered pair (20, 30) , 20 is the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When an economist evaluates a positive statement, he or she is primarily

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram,

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production at point Y is

Correct AnswerverifiedShow Answer

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the ordered pair (5, 3) , 3 is the

Correct AnswerverifiedShow Answer

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Correct AnswerverifiedShow Answer

In principle, we can

Correct AnswerverifiedShow Answer

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

Correct Answerverifiedland, labo...View AnswerShow Answer

Unemployment causes production levels to be inefficient.

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of moving from point M to point L is

Correct AnswerverifiedShow Answer

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land, labo...
View Answer

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