Question 1

Figure 2-14 
-Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 2

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A)  performing an experiment in an economic system.
B)  applying mathematical methods to economic analysis.
C)  analyzing available data.
D)  formulating theories about economic events.E) All of the above
F) A) and D)

Question 3

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 4

In the circular-flow diagram, in the markets for

Accepted Answer

A)  goods and services, households and firms are both sellers.
B)  goods and services, households are sellers and firms are buyers.
C)  the factors of production, households are sellers and firms are buyers.
D)  the factors of production, households and firms are both buyers.E) None of the above
F) All of the above

Question 5

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A)  ask winners of the Nobel Prize in Economics to evaluate their theories.
B)  argue that data is impossible to collect in economics.
C)  gather data from historical episodes of economic change.
D)  assume that data would support their theories.E) None of the above
F) C) and D)

Question 6

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Accepted Answer

A) True 
 B)False

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

Which of the following is not an assumption of the productions possibilities frontier?

Accepted Answer

A)  A country produces only two goods or types of goods.
B)  Technology does not change.
C)  The amount of available resources does not change.
D)  There is a fixed quantity of money.E) A) and C)
F) C) and D)

Question 9

Economists use some familiar terms in specialized ways

Accepted Answer

A)  to make the subject sound more complex than it is.
B)  because every respectable field of study has its own language.
C)  to provide a new and useful way of thinking about the world.
D)  because it was too difficult to come up with new terms.E) B) and D)
F) B) and C)

Question 10

Figure 2-5 
-Refer to Figure 2-5. A movement from point C to point D could be caused by

Accepted Answer

A)  unemployment.
B)  a decrease in society's preference for sweaters.
C)  fewer resources available for production of sweaters.
D)  All of the above are correct.E) A) and B)
F) B) and C)

Question 11

Figure 2-7 
-Refer to Figure 2-7. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Accepted Answer

A)  point J
B)  point K
C)  point L
D)  point ME) B) and C)
F) None of the above

Question 12

Figure 2-1 
-Refer to Figure 2-1. Which arrow represents the flow of income payments?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) B) and C)
F) A) and C)

Question 13

For economists, conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-11 
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B can best be described as

Accepted Answer

A)  a downturn in the economy.
B)  economic growth.
C)  an enhancement of equality.
D)  an improvement in the allocation of resources.E) B) and D)
F) B) and C)

Question 15

Which of the following trade-offs does the production possibilities frontier illustrate?

Accepted Answer

A)  if an economy wants to increase efficiency in production, then it must sacrifice equality in consumption
B)  once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other
C)  for an economy to consume more of one good, it must stop consuming the other good entirely
D)  for an economy to produce and consume goods, it must sacrifice environmental qualityE) A) and B)
F) A) and C)

Question 16

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-6 
-Refer to Figure 2-6. Efficient production is represented by which point(s) ?

Accepted Answer

A)  A, B
B)  A, B, C, F, G
C)  C, F, G
D)  DE) A) and B)
F) C) and D)

Question 18

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

Accepted Answer

A)  Gasoline prices ought to be lower than they are now.
B)  The federal government should raise taxes on wealthy people.
C)  The social security system is a good system and it deserves to be preserved as it is.
D)  All of the above are normative statements.E) A) and B)
F) B) and D)

Question 19

Figure 2-15
Relationship between Price and Cups of Coffee 
-Refer to Figure 2-15. Which of the following could result in a movement from point A to point B?

Accepted Answer

A)  a change in income
B)  a change in preferences
C)  a change in the price of coffee
D)  a change in the price of teaE) A) and C)
F) C) and D)

Question 20

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Correct AnswerverifiedShow Answer

Which of the following is not an assumption of the productions possibilities frontier?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For economists, conducting experiments is often difficult and sometimes impossible.

Correct AnswerverifiedShow Answer

Economists use some familiar terms in specialized ways

Correct AnswerverifiedShow Answer

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B can best be described as

Correct AnswerverifiedShow Answer

In the circular-flow diagram, in the markets for

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following trade-offs does the production possibilities frontier illustrate?

Correct AnswerverifiedShow Answer

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

Correct AnswerverifiedShow Answer

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Correct AnswerverifiedShow Answer

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

Correct AnswerverifiedShow Answer

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. Which of the following could result in a movement from point A to point B?

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Figure 2-5 -Refer to Figure 2-5. A movement from point C to point D could be caused by

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Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of income payments?

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Figure 2-14 -Refer to Figure 2-14. Points B and C represent infeasible outcomes for this economy.

Correct AnswerverifiedShow Answer

When a variable that is named on an axis of a graph changes, the curve shifts.

Correct AnswerverifiedShow Answer

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. Which point on the graph best represents the fact that, because resources are scarce, not every conceivable outcome is feasible?

Correct AnswerverifiedShow Answer

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