Question 1

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

Accepted Answer

A)  If the price of a product decreases, people's willingness to buy that product will increase.
B)  Reducing tax rates on the wealthy would benefit the nation.
C)  If the national saving rate were to increase, so would the rate of economic growth.
D)  The elimination of trade restrictions would increase an economy's standard of living.E) A) and B)
F) A) and C)

Question 2

When economists are trying to help improve the world, they are

Accepted Answer

A)  in the realm of positive economics rather than normative economics.
B)  in the realm of macroeconomics rather than microeconomics.
C)  scientists.
D)  policy advisers.E) None of the above
F) A) and D)

Question 3

The institution that sets the nation's monetary policy is called the

Accepted Answer

The answer of The institution that sets the nation's monetary...

Question 4

Economists at which administrative department help design tax policy?

Accepted Answer

Department...

Question 5

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 quality.E) A) and D)
F) C) and D)

Question 6

Microeconomics is the study of

Accepted Answer

A)  how money affects the economy.
B)  how individual households and firms make decisions.
C)  how government affects the economy.
D)  how the economy as a whole works.E) B) and D)
F) B) and C)

Question 7

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-22 
-Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Accepted Answer

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

Question 9

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. 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 the cost of producing a restaurant meal
C)  a change in the price of restaurant meals
D)  a change in the price of moviesE) A) and B)
F) A) and D)

Question 10

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 11

An ordered pair is

Accepted Answer

A)  the process of checking calculations twice before placing them on a graph.
B)  two numbers that can be represented by a single point on a graph.
C)  two numbers that are represented by two points on a graph.
D)  two points on a graph that are of equal distance from the origin.E) C) and D)
F) A) and D)

Question 12

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  goods
B)  services
C)  capital
D)  profitE) A) and B)
F) B) and C)

Question 14

In the simple circular-flow diagram, who buys the factors of production?

Accepted Answer

A)  households only
B)  firms only
C)  both households and firms
D)  neither households nor firmsE) A) and C)
F) C) and D)

Question 15

Figure 2-7 
-Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

Accepted Answer

A)  zero
B)  15 tvs
C)  20 engines and 15 tvs
D)  20 enginesE) C) and D)
F) A) and D)

Question 16

In the circular-flow diagram, firms consume all the goods and services that they produce.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-14 
-Refer to Figure 2-14. Points A, B, and D represent feasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 18

When economists disagree about whether a policy is fair, they are expressing a difference in

Accepted Answer

The answer of When economists disagree about whether a policy...

Question 19

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) None of the above
F) C) and D)

Question 20

In the ordered pair (3, 6) , 3 is the

Accepted Answer

A)  x-coordinate.
B)  y-coordinate.
C)  origin.
D)  slope.E) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

Microeconomics and macroeconomics are closely intertwined.

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

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Points outside the production possibilities frontier represent infeasible levels of production.

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

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

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Microeconomics is the study of

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In the ordered pair (3, 6) , 3 is the

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In the simple circular-flow diagram, who buys the factors of production?

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While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

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

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Figure 2-14 -Refer to Figure 2-14. Points A, B, and D represent feasible outcomes for this economy.

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Economists at which administrative department help design tax policy?

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When economists are trying to help improve the world, they are

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The institution that sets the nation's monetary policy is called the

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When economists disagree about whether a policy is fair, they are expressing a difference in

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

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In the circular-flow diagram, firms consume all the goods and services that they produce.

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Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. Which of the following could result in a movement from point A to point B?

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An ordered pair is

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Figure 2-7 -Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

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Department...
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