Question 1

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Accepted Answer

A) True 
 B)False

Question 2

The goal of an economist who formulates new theories is to

Accepted Answer

A)  provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works.
B)  provoke stimulating debate in scientific journals.
C)  contribute to an understanding of how the world works.
D)  demonstrate that economists, like other scientists, can formulate testable theories.E) B) and C)
F) A) and B)

Question 3

As a substitute for laboratory experiments, economists use evidence available through history's

Accepted Answer

natural ex...

Question 4

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Accepted Answer

The answer of Is the following a positive or normative...

Question 5

Figure 2-9
Panel (a) 
Panel (b)   
-Refer to Figure 2-9, Panel (a) . The movement from point M to point K could be caused by

Accepted Answer

A)  an advance in production technology.
B)  an improvement in efficiency.
C)  economic growth.
D)  unemployment.E) All of the above
F) B) and C)

Question 6

The circular-flow diagram is an example of

Accepted Answer

A)  a laboratory experiment.
B)  an economic model.
C)  a mathematical model.
D)  All of the above are correct.E) C) and D)
F) B) and D)

Question 7

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

Accepted Answer

A)  shift to the right.
B)  shift to the left.
C)  not shift; instead, Martina will move along her demand curve downward and to the right.
D)  not shift; instead, Martina will move along her demand curve upward and to the left.E) None of the above
F) B) and D)

Question 8

Figure 2-22 
-Refer to Figure 2-22. What are the coordinates of point C?

Accepted Answer

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

Question 9

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. The slope of the line containing points A and B is

Accepted Answer

A)  -1/2.
B)  -2.
C)  1/2.
D)  2.E) B) and D)
F) B) and C)

Question 10

In building economic models, economists often omit

Accepted Answer

A)  assumptions.
B)  theories.
C)  details.
D)  equations.E) A) and B)
F) A) and C)

Question 11

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A)  all resources are scarce.
B)  economic growth is always occurring.
C)  the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.
D)  the only way to get more of one good is to get less of the other.E) None of the above
F) A) and B)

Question 12

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Accepted Answer

The answer of In the circular flow diagram, when Brian...

Question 13

Economists work both inside and outside the administrative branch of the U.S. government.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2-16​ 
-Refer to Figure 2-16. Efficient production is represented by which point(s) ?

Accepted Answer

A)  B, D, E
B)  D
C)  C, B
D)  A, CE) A) and D)
F) A) and C)

Question 15

A duty of economists at the Department of Labor is to

Accepted Answer

A)  analyze data on workers.
B)  schedule federal holidays.
C)  enforce the nation's antitrust laws.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 16

Figure 2-5 
-Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Accepted Answer

A)  The economy has insufficient resources to produce at a more desirable point.
B)  The economy's available technology prevents it from producing at a more desirable point.
C)  There is widespread unemployment in the economy.
D)  Any of the above statements would be a legitimate explanation for this situation.E) A) and C)
F) C) and D)

Question 17

When two variables have a negative correlation,

Accepted Answer

A)  they tend to move in opposite directions.
B)  they tend to move in the same direction.
C)  one variable will move while the other remains constant.
D)  the variables' values are never positive.E) B) and C)
F) A) and C)

Question 18

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Accepted Answer

The answer of Like biologists and physicists, economists use the...

Question 19

Positive statements can be evaluated using data alone, but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 20

In the simple circular-flow diagram, households

Accepted Answer

A)  are the only decision makers.
B)  own the factors of production.
C)  are buyers of inputs.
D)  consume only some of the goods and services that firms produce.E) B) and D)
F) B) and C)

Exam 2: Thinking Like an Economist

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Correct AnswerverifiedShow Answer

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Correct AnswerverifiedShow Answer

Figure 2-16​ -Refer to Figure 2-16. Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. What are the coordinates of point C?

Correct AnswerverifiedShow Answer

In building economic models, economists often omit

Correct AnswerverifiedShow Answer

Positive statements can be evaluated using data alone, but normative statements cannot.

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Correct AnswerverifiedShow Answer

When two variables have a negative correlation,

Correct AnswerverifiedShow Answer

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . The movement from point M to point K could be caused by

Correct AnswerverifiedShow Answer

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points A and B is

Correct AnswerverifiedShow Answer

Economists work both inside and outside the administrative branch of the U.S. government.

Correct AnswerverifiedShow Answer

The circular-flow diagram is an example of

Correct AnswerverifiedShow Answer

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Correct AnswerverifiedShow Answer

The goal of an economist who formulates new theories is to

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram, households

Correct AnswerverifiedShow Answer

The bowed shape of the production possibilities frontier can be explained by the fact that

Correct AnswerverifiedShow Answer

A duty of economists at the Department of Labor is to

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

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As a substitute for laboratory experiments, economists use evidence available through history's

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Figure 2-16 -Refer to Figure 2-16. Efficient production is represented by which point(s) ?

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