Question 1

According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-4
 
-Refer to Figure 2-4.The opportunity cost of obtaining 10 additional lamps by moving from point W to point Z is

Accepted Answer

A)   0 notepads.
B)   10 notepads.
C)   50 notepads.
D)   None of the above; the economy cannot move from point W to point Z.

Question 3

Almost all economists agree that rent control

Accepted Answer

A)   has no effect on the rental income of landlords.
B)   allows the market for housing to work more efficiently.
C)   adversely affects the availability and quality of housing.
D)   is a very inexpensive way to help the most needy members of society.

Question 4

Table 2-5
 
-Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of a dozen cookies does not depend on how many pounds of coffee are being produced.
B)   The opportunity cost of a dozen cookies increases as more cookies are produced.
C)   The opportunity cost of a dozen cookies decreases as more cookies are produced.
D)   The opportunity cost of a pound of coffee decreases as more coffee is produced.

Question 5

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)   the respondents were almost equally divided on the propositions.
B)   the respondents favored the propositions by a slight margin.
C)   the respondents disagreed with the propositions by a slight margin.
D)   there was overwhelming endorsement of the propositions among the respondents.

Question 6

Unemployment would cause an economy to

Accepted Answer

A)   produce inside its production possibilities frontier.
B)   produce on its production possibilities frontier.
C)   produce outside its production possibilities frontier.
D)   experience an inward shift of its production possibilities frontier.

Question 7

A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

Accepted Answer

A)   less than 0.
B)   between zero and 1.
C)   between one and infinity.
D)   undefined.

Question 8

Historical episodes are

Accepted Answer

A)   valuable to economists because they allow economists to see how the science of economics has evolved.
B)   valuable to economists because they allow economists to evaluate economic theories.
C)   not of concern to economists because economics is about predicting the future, not dwelling on the past.
D)   not of concern to economists because the exact circumstances of historical episodes are unlikely to be observed again.

Question 9

Figure 2-14
 
-Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 10

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.

Question 11

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.

Question 12

Figure 2-15
Relationship between Price and Cups of Coffee
 
-Refer to Figure 2-15.A movement from point A to point Z is called

Accepted Answer

A)   a shift in demand.
B)   a movement along the demand curve.
C)   a shift in supply.
D)   a movement along the supply curve.

Question 13

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Accepted Answer

A)   sound logic.
B)   reverse causality.
C)   omitted variables.
D)   bias.

Question 14

Two variables that have a negative correlation move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is correct?

Accepted Answer

A)   Few economic models incorporate assumptions.
B)   Different economic models employ different sets of assumptions.
C)   Good economic models attempt to mimic reality as closely as possible.
D)   Economic models, to be accepted, must be tested by conducting experiments.

Question 16

Figure 2-9

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

Accepted Answer

A)   0 computers.
B)   6 computers.
C)   10 computers.
D)   12 computers.

Question 17

Positive statements are not

Accepted Answer

A)   descriptive.
B)   prescriptive.
C)   claims about how the world is.
D)   made by economists speaking as scientists.

Question 18

In the circular-flow diagram,which of the following items does not flow from households to firms?

Accepted Answer

A)   revenue
B)   land, labor, and capital
C)   factors of production
D)   profit

Question 19

Table 2-5
 
-Refer to Table 2-5.Table 2-5 shows one set of production possibilities.What is the opportunity cost of an increase in the production of coffee from 350 pounds to 650 pounds?

Accepted Answer

A)   400 dozen cookies
B)   300 dozen cookies
C)   200 dozen cookies
D)   200 pounds of coffee

Question 20

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Accepted Answer

A)   the effect of foreign direct investment on economic growth
B)   the effect of a sales tax on the cigarette industry
C)   the effect of an investment tax credit on the economy's capital stock
D)   the effect of a war on government spending

Exam 2: Thinking Like an Economist.

Which of the following statements is correct?

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

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Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15.A movement from point A to point Z is called

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A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

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Table 2-5 -Refer to Table 2-5.Table 2-5 shows one set of production possibilities.What is the opportunity cost of an increase in the production of coffee from 350 pounds to 650 pounds?

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In the circular-flow diagram,which of the following items does not flow from households to firms?

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Positive statements are not

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Historical episodes are

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According to John Maynard Keynes,an economist must possess a rare combination of skills including being a mathematician,historian,statesman,and philosopher.

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

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A demand curve displaying the relationship between the price of cars and the quantity demanded of cars should have a slope that is

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Table 2-5 -Refer to Table 2-5.Table 2-5 shows one set of production possibilities.Which of the following statements is correct?

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Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 45 doghouses and 30 dishwashers.

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Two variables that have a negative correlation move in opposite directions.

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Unemployment would cause an economy to

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Almost all economists agree that rent control

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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?

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Figure 2-4 -Refer to Figure 2-4.The opportunity cost of obtaining 10 additional lamps by moving from point W to point Z is

Correct AnswerverifiedShow Answer

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

Correct AnswerverifiedShow Answer

Suppose that someone makes the argument that because empty alcohol containers are found at many accidents,the containers cause accidents.This would be an example of

Correct AnswerverifiedShow Answer

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