Question 1

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

Accepted Answer

A)   goods and services
B)   dollars paid to land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) A) and B)
F) All of the above

Question 2

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)   there will be a movement along the curve.
B)   the curve will rotate clockwise.
C)   the curve will be unaffected since only the variables on the axis affect the curve.
D)   the curve will shift.E) A) and B)
F) A) and C)

Question 3

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Accepted Answer

A)   The United States should not restrict employers from outsourcing work to foreign countries.
B)   The United States should withdraw from the North American Free Trade Agreement NAFT
A)  .
C)   The United States should eliminate agricultural subsidies.
D)   Local and state governments should eliminate subsidies to professional sports franchises.E) A) and B)
F) A) and C)

Question 4

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 5

In the simple circular-flow diagram, the participants in the economy are

Accepted Answer

A)   firms and government.
B)   households and firms.
C)   households and government.
D)   households, firms, and government.E) All of the above
F) None of the above

Question 6

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 7

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Accepted Answer

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

Question 8

Use the following Figure to answer the question : Figure 2-22 : 
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively...

Question 9

Use the following Figure to answer the question : Figure 2-21 : 
-Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Accepted Answer

A)   omitted variable bias.
B)   reverse causality.
C)   slope mismatch.
D)   shifting versus moving along a curve.E) B) and D)
F) A) and C)

Question 10

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

Question 11

Which of the following statements is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)   Americans deserve a cleaner environment.
B)   Reducing emissions reduces days missed from school due to asthma.
C)   All Americans are entitled to quality health care.
D)   Economic policies should focus on improving equality.E) B) and C)
F) A) and D)

Question 12

The scientific method is the dispassionate development and testing of theories about how the world works.

Accepted Answer

A) True 
 B)False

Question 13

Positive statements are

Accepted Answer

A)   prescriptive.
B)   claims about how the world should be.
C)   claims about how the world is.
D)   made by economists speaking as policy advisers.E) B) and D)
F) A) and C)

Question 14

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 15

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

Question 16

When two variables move in the same direction, the curve relating them is

Accepted Answer

A)   upward sloping, and we say the variables are positively related.
B)   upward sloping, and we say the variables are negatively related.
C)   downward sloping, and we say the variables are positively related.
D)   downward sloping, and we say the variables are negatively related.E) B) and C)
F) A) and D)

Question 17

Use the following Table to answer the question : Table  2-3 : Production Possibilities for Footville

-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)   400 socks
B)   300 socks
C)   200 socks
D)   100 socksE) A) and B)
F) None of the above

Question 18

Where can an economy not produce?

Accepted Answer

A)   inside its production possibilities frontier
B)   on its production possibilities frontier
C)   outside its production possibilities frontier
D)   at the endpoints of its production possibilities frontierE) A) and B)
F) A) and C)

Question 19

Use the following Figure to answer the question : Figure 2-5:  
-Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

Accepted Answer

A)   0 washers.
B)   20 washers.
C)   40 washers.
D)   None of the above; the economy cannot move from point D to point A.E) All of the above
F) A) and C)

Question 20

A production possibilities frontier shifts outward when

Accepted Answer

A)   the economy experiences economic growth.
B)   the desires of the economy's citizens change.
C)   at least one of the basic principles of economics is violated.
D)   opportunity costs are lessened.E) None of the above
F) A) and C)

Exam 2: Thinking Like an Economist

Use the following Figure to answer the question : Figure 2-5: -Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

Correct AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-21 : -Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-22 : -Refer to Figure 2-22. How are price and quantity related in this graph?

Correct Answerverifiednegatively...View AnswerShow Answer

A production possibilities frontier shifts outward when

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Where can an economy not produce?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Positive statements are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is an example of a positive, as opposed to normative, statement?

Correct AnswerverifiedShow Answer

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Correct AnswerverifiedShow Answer

When two variables move in the same direction, the curve relating them is

Correct AnswerverifiedShow Answer

Use the following Table to answer the question : Table 2-3 : Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram, the participants in the economy are

Correct AnswerverifiedShow Answer

The scientific method is the dispassionate development and testing of theories about how the world works.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Correct AnswerverifiedShow Answer

When a relevant variable that is not named on either axis changes,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
negatively...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified