Question 1

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

Accepted Answer

A) True 
 B)False

Question 2

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 bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is

Accepted Answer

The answer of Figure 2-14  Consider the production possibilities...

Question 3

Which of these statements about economic models is correct?

Accepted Answer

A)  For economists, economic models provide insights about the world.
B)  Economic models are built with assumptions.
C)  Economic models are often composed of equations and diagrams.
D)  All of the above are correct.E) All of the above
F) A) and C)

Question 4

Figure 2-22 
-Refer to Figure 2-22. What is the x-coordinate of point R?

Accepted Answer

The answer of Figure 2-22 
-Refer to Figure 2-22. What...

Question 5

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  L, M
B)  N, O, P, Q
C)  N, O, P
D)  QE) B) and D)
F) A) and B)

Question 7

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 8

Just like models constructed in other areas of science, economic models

Accepted Answer

A)  incorporate assumptions that contradict reality.
B)  incorporate all details of the real world.
C)  complicate reality.
D)  avoid the use of diagrams and equations.E) None of the above
F) All of the above

Question 9

Which of the following statements is correct about the roles of economists?

Accepted Answer

A)  Economists are best viewed as policy advisers.
B)  Economists are best viewed as scientists.
C)  In trying to explain the world, economists are policy advisers; in trying to improve the world, they are scientists.
D)  In trying to explain the world, economists are scientists; in trying to improve the world, they are policy advisers.E) C) and D)
F) A) and C)

Question 10

Economic models

Accepted Answer

A)  are not useful because they omit many real-world details.
B)  are usually composed of diagrams and equations.
C)  are useful because they do not omit any real-world details.
D)  are usually plastic representations of the economy.E) A) and B)
F) A) and C)

Question 11

To display information on two variables, an economist must use

Accepted Answer

A)  a bar graph.
B)  a pie chart.
C)  the coordinate system.
D)  a time-series graph.E) A) and B)
F) A) and C)

Question 12

Table 2-6 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Accepted Answer

The answer of Table 2-6 
-Refer to Table 2-6. Consider...

Question 13

Table 2-6 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

Accepted Answer

The answer of Table 2-6 
-Refer to Table 2-6. Consider...

Question 14

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

Accepted Answer

A)  0 cups of coffee.
B)  2 cups of coffee.
C)  4 cups of coffee.
D)  6 cups of coffee.E) None of the above
F) All of the above

Question 15

When economists make

Accepted Answer

A)  positive statements, they are speaking not as scientists but as policy advisers.
B)  positive statements, they are speaking not as scientists but as forecasters.
C)  normative statements, they are speaking not as scientists but as policy advisers.
D)  normative statements, they are speaking not as policy advisers but as model-builders.E) All of the above
F) A) and B)

Question 16

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

Accepted Answer

A) True 
 B)False

Question 17

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Accepted Answer

A)  the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing
B)  the tradeoff between production of jewelry and production of clothing
C)  the opportunity cost of clothing in terms of jewelry
D)  the effect of economic growth on production possibilities involving jewelry and clothingE) B) and C)
F) C) and D)

Question 18

Figure 2-6 
-Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Accepted Answer

A)  120 pillows and 320 blankets.
B)  180 pillows and 180 blankets.
C)  240 pillows and 200 blankets.
D)  We would have to know the details of this economy's technology in order to determine this.E) A) and D)
F) A) and C)

Question 19

Economic models can help us understand reality only when they include all details of the economy.

Accepted Answer

A) True 
 B)False

Question 20

When an economy is operating at a point on its production possibilities frontier, then

Accepted Answer

A)  consumers are content with the mix of goods and services that is being produced.
B)  there is no way to produce more of one good without producing less of the other.
C)  equal amounts of the two goods are being produced.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Exam 2: Thinking Like an Economist

A circular-flow diagram is a visual model of the economy.

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When economists make

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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The opportunity cost of one cup of coffee is highest when the economy produces

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Economic models

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Which of the following statements is correct about the roles of economists?

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An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

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Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

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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 bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is

Correct AnswerverifiedShow Answer

Economic models can help us understand reality only when they include all details of the economy.

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When an economy is operating at a point on its production possibilities frontier, then

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Figure 2-22 -Refer to Figure 2-22. What is the x-coordinate of point R?

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Figure 2-6 -Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

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The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

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To display information on two variables, an economist must use

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Which of these statements about economic models is correct?

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Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

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A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

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

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Just like models constructed in other areas of science, economic models

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The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

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