Question 1

Albert Einstein once made the following observation about science:

Accepted Answer

A)  "The whole of science is nothing more than the refinement of everyday thinking."
B)  "The whole of science is nothing more than an interesting intellectual exercise."
C)  "In order to understand science, one must rely solely on abstraction."
D)  "In order to understand science, one must transcend everyday thinking."E) B) and C)
F) None of the above

Question 2

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A)  efficiency
B)  opportunity cost
C)  equality
D)  trade-offsE) A) and B)
F) C) and D)

Question 3

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

Accepted Answer

A)  rotation of the curve.
B)  shift of the curve.
C)  movement along the curve.
D)  change in the slope of the curve.E) B) and D)
F) None of the above

Question 4

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) B) and C)

Question 5

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 6

Economic models

Accepted Answer

A)  are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models.
B)  are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models.
C)  are simplifications of reality, and in this respect economic models are no different from other scientific models.
D)  are simplifications of reality, and in this respect economic models are very different from other scientific models.E) None of the above
F) A) and C)

Question 7

Figure 2-21 
-Refer to Figure 2-21. According to the graph, snowstorms

Accepted Answer

A)  and snowblowers sold are positively correlated.
B)  and snowblowers sold are negatively correlated
C)  and snowblowers sold are uncorrelated.
D)  are caused by more snowblowers being sold.E) A) and C)
F) All of the above

Question 8

When constructing a production possibilities frontier, which of the following assumptions is not made?

Accepted Answer

A)  The economy produces only two goods or two types of goods.
B)  Firms produce goods using factors of production.
C)  The technology available to firms is given.
D)  The quantities of the factors of production that are available are increasing over the relevant time period.E) A) and D)
F) C) and D)

Question 9

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

Accepted Answer

A)  2 donuts.
B)  2 donuts and 2 cups of coffee.
C)  2 cups of coffee.
D)  6 cups of coffee.E) All of the above
F) A) and C)

Question 10

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Accepted Answer

A) True 
 B)False

Question 11

A circular-flow diagram is a model that

Accepted Answer

A)  helps to explain how participants in the economy interact with one another.
B)  helps to explain how the economy is organized.
C)  incorporates all aspects of the real economy.
D)  Both (a)  and (b)  are correct.E) A) and B)
F) All of the above

Question 12

The slope of a line is equal to

Accepted Answer

A)  rise divided by run.
B)  run divided by rise.
C)  rise minus run.
D)  rise plus run.E) All of the above
F) None of the above

Question 13

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. The slope of the line containing points Y and Z is

Accepted Answer

A)  -0.5.
B)  -1.
C)  -2.
D)  -4.E) B) and C)
F) A) and D)

Question 14

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a) . To gain 2 donuts by moving from point L to point M, society must sacrifice

Accepted Answer

A)  efficiency.
B)  employment.
C)  4 cups of coffee.
D)  More than one of the above is correct.E) B) and D)
F) All of the above

Question 15

Figure 2-13 
-Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Accepted Answer

A)  I, L
B)  G, H
C)  J, K
D)  F, GE) A) and D)
F) All of the above

Question 16

In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 17

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 everyone should pay the same percentage of their income in taxes; another economist believes that wealthier citizens should pay a higher percentage of their income in taxes.
B)  One economist believes that manufacturing firms should face greater regulation to preserve the environment; another economist believes the government should not intervene in free markets.
C)  One economist believes that equality should be valued over efficiency in policy decisions; another economist believes that efficiency should be valued over equality in policy decisions.
D)  One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption.E) B) and D)
F) A) and C)

Question 18

Which of the following steps does an economist take when studying the economy?

Accepted Answer

A)  devise theories
B)  collect data
C)  analyze data
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 19

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) A) and D)
F) A) and C)

Question 20

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Suppose price is measured along the vertical axis on a graph. When price changes, there will be a

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Which of the following steps does an economist take when studying the economy?

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A circular-flow diagram is a model that

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The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

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

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When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

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Which of the following concepts cannot be illustrated by the production possibilities frontier?

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Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points Y and Z is

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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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Economic models

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When constructing a production possibilities frontier, which of the following assumptions is not made?

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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . To gain 2 donuts by moving from point L to point M, society must sacrifice

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

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Figure 2-21 -Refer to Figure 2-21. According to the graph, snowstorms

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When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

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Albert Einstein once made the following observation about science:

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

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The slope of a line is equal to

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Figure 2-13 -Refer to Figure 2-13. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

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In surveys of professional economists, fourteen propositions were endorsed by an overwhelming majority of respondents.

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

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