Question 1

One thing economists do to help them understand how the real world works is

Accepted Answer

A)  make assumptions.
B)  ignore the past.
C)  try to capture every aspect of the real world in the models they construct.
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 2

Historical episodes allow economists to illustrate and evaluate current economic theories.

Accepted Answer

A) True 
 B)False

Question 3

The scientific method is applicable to studying

Accepted Answer

A)  natural sciences, but not social sciences.
B)  social sciences, but not natural sciences.
C)  both natural sciences and social sciences.
D)  None of the above is correct.E) B) and C)
F) A) and B)

Question 4

Figure 2-3 
-Refer to Figure 2-3. What do the inner arrows represent in the figure?

Accepted Answer

flow of in...

Question 5

When economists are trying to explain the world, they are

Accepted Answer

A)  scientists.
B)  policy advisers.
C)  in the realm of microeconomics rather than macroeconomics.
D)  in the realm of normative economics rather than positive economics.E) C) and D)
F) All of the above

Question 6

Figure 2-15 
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

Accepted Answer

The answer of Figure 2-15 
-Refer to Figure 2-15. Consider...

Question 7

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

Accepted Answer

A)  spending.
B)  revenue.
C)  income.
D)  wages, rent, and profit.E) B) and C)
F) C) and D)

Question 10

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Accepted Answer

A) True 
 B)False

Question 11

The second number in any ordered pair is

Accepted Answer

A)  the x-coordinate.
B)  the y-coordinate.
C)  the horizontal location of the point.
D)  the slope.E) A) and D)
F) All of the above

Question 12

An assumption an economist might make while studying international trade is

Accepted Answer

A)  there are only two countries.
B)  countries only produce two goods.
C)  technology does not change.
D)  All of the above are possible assumptions.E) A) and D)
F) All of the above

Question 13

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 14

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)  using all of the scarce resources it has available.
B)  conserving on resources, rather than using all available resources.
C)  getting all it can get from the scarce resources it has available.
D)  able to produce more than what is currently being produced without additional resources.E) All of the above
F) C) and D)

Question 15

Figure 2-3 
-Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

Accepted Answer

A)  produce and sell goods and services
B)  hire and use factors of production
C)  own and sell factors of production
D)  exchange goods and services between firms and householdsE) All of the above
F) A) and D)

Question 16

Which of the following is not correct about most economic models?

Accepted Answer

A)  They are composed of equations and diagrams.
B)  They contribute very little to economists' understanding of the real world.
C)  They omit many features of the real-world economy.
D)  In constructing models, economists make assumptions.E) A) and D)
F) A) and C)

Question 17

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  goods and services
B)  land, labor, and capital
C)  dollars spent on goods and services
D)  wages, rent, and profitE) A) and B)
F) A) and C)

Question 19

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 20

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...

Exam 2: Thinking Like an Economist

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

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An assumption an economist might make while studying international trade is

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The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

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Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

Correct AnswerverifiedShow Answer

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Correct AnswerverifiedShow Answer

The scientific method is applicable to studying

Correct AnswerverifiedShow Answer

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Correct AnswerverifiedShow Answer

When economists are trying to explain the world, they are

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The second number in any ordered pair is

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An economic outcome is said to be efficient if the economy is

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One thing economists do to help them understand how the real world works is

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"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

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Figure 2-3 -Refer to Figure 2-3. What do the inner arrows represent in the figure?

Correct Answerverifiedflow of in...View AnswerShow Answer

Historical episodes allow economists to illustrate and evaluate current economic theories.

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

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

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

Which of the following is not correct about most economic models?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

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flow of in...
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