Question 1

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

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

Question 2

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)  is useless, since the real world has many countries trading many goods.
B)  can be useful only in situations involving two countries and two goods.
C)  can be useful in the classroom, but is useless in the real world.
D)  can be useful in helping economists understand the complex world of international trade involving many countries and many goods.E) C) and D)
F) None of the above

Question 3

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 4

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 5

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Accepted Answer

The answer of Economists at which administrative department analyze data...

Question 6

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Accepted Answer

The answer of In the circular flow diagram, when Brian...

Question 7

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) A) and B)
F) A) and C)

Question 8

Figure 2-6 
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Accepted Answer

A)  zero.
B)  40 blankets.
C)  120 pillows.
D)  360 blankets.E) B) and C)
F) A) and D)

Question 9

Figure 2-2 
-Refer to Figure 2-2. Carla regularly buys fruits and vegetables at a grocery store. Roberto regularly pays a lawn-care company to mow his lawn. If the flow of fruits and vegetables from the grocery store to Carla is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Roberto to the lawn-care company is represented by an arrow

Accepted Answer

A)  from Box A to Box D.
B)  from Box B to Box C.
C)  from Box C to Box B.
D)  from Box D to Box A.E) None of the above
F) C) and D)

Question 10

Figure 2-14 
-Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 11

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Accepted Answer

The answer of Suppose a war in the Middle East...

Question 12

Figure 2-3 
-Refer to Figure 2-3. What does the arrow going from oval A to rectangle 2 represent in the figure?

Accepted Answer

goods and ...

Question 13

The Economic Report of the President

Accepted Answer

A)  discusses recent developments in the economy and presents analysis of current policy issues.
B)  is written by the Council of Economic Advisers.
C)  is the responsibility of the economists at the Office of Management and Budget.
D)  Both a and b are correct.E) All of the above
F) A) and D)

Question 14

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Accepted Answer

A)  Tariffs and import quotas usually reduce general economic welfare.
B)  A large federal budget deficit has an adverse effect on the economy.
C)  Minimum wage increases unemployment among young and unskilled workers.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 15

Figure 2-4 
-Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

Accepted Answer

A)  R
B)  S
C)  T
D)  UE) All of the above
F) A) and D)

Question 16

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Accepted Answer

The answer of Is the following a positive or normative...

Question 17

Figure 2-17​ 
-Refer to Figure 2-17. The opportunity cost of producing an additional pair of shoes increases as more shoes are produced.

Accepted Answer

A) True 
 B)False

Question 18

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) B) and C)
F) B) and D)

Question 19

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 20

In the circular-flow diagram, one loop represents the flow of goods, services, and factors of production, and the other loop represents the corresponding flow of dollars.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Correct Answer
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Figure 2-3 -Refer to Figure 2-3. What does the arrow going from oval A to rectangle 2 represent in the figure?

Correct Answer
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goods and ...
View Answer

Figure 2-17 -Refer to Figure 2-17. The opportunity cost of producing an additional pair of shoes increases as more shoes are produced.

Correct Answer
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Figure 2-4 -Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

Correct Answer
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A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Correct Answer
verified

A circular-flow diagram is a model that

Correct Answer
verified

Points outside the production possibilities frontier represent infeasible levels of production.

Correct Answer
verified

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

Correct Answer
verified

In the markets for goods and services in the circular-flow diagram,

Correct Answer
verified

Good assumptions simplify a problem without substantially affecting the answer.

Correct Answer
verified

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Correct Answer
verified

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Correct Answer
verified

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Correct Answer
verified

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Correct Answer
verified

The Economic Report of the President

Correct Answer
verified

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Correct Answer
verified

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct Answer
verified

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Correct Answer
verified

In the circular-flow diagram, one loop represents the flow of goods, services, and factors of production, and the other loop represents the corresponding flow of dollars.

Correct Answer
verified

Exam 2: Thinking Like an Economist

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. What does the arrow going from oval A to rectangle 2 represent in the figure?

Correct Answerverifiedgoods and ...View AnswerShow Answer

Figure 2-17​ -Refer to Figure 2-17. The opportunity cost of producing an additional pair of shoes increases as more shoes are produced.

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

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A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

Correct AnswerverifiedShow Answer

A circular-flow diagram is a model that

Correct AnswerverifiedShow Answer

Points outside the production possibilities frontier represent infeasible levels of production.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the markets for goods and services in the circular-flow diagram,

Correct AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Correct AnswerverifiedShow Answer

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Correct AnswerverifiedShow Answer

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Correct AnswerverifiedShow Answer

The Economic Report of the President

Correct AnswerverifiedShow Answer

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Correct AnswerverifiedShow Answer

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, one loop represents the flow of goods, services, and factors of production, and the other loop represents the corresponding flow of dollars.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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goods and ...
View Answer

Figure 2-17 -Refer to Figure 2-17. The opportunity cost of producing an additional pair of shoes increases as more shoes are produced.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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