Question 1

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 2

Figure 2-22 
-Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

Accepted Answer

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

Question 3

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 bushel of corn does not depend on how many bushels of wheat are being produced.
B)  The opportunity cost of a bushel of corn increases as more corn is produced.
C)  The opportunity cost of a bushel of corn decreases as more corn is produced.
D)  The opportunity cost of a bushel of wheat decreases as more wheat is produced.E) None of the above
F) A) and B)

Question 4

In constructing models, economists

Accepted Answer

A)  leave out equations, since equations and models tend to contradict one another.
B)  ignore the long run, since models are useful only for short-run analysis.
C)  sometimes make assumptions that are contrary to features of the real world.
D)  try to include every feature of the economy.E) A) and B)
F) All of the above

Question 5

Which of the following statements applies to economics, as well as to other sciences such as physics?

Accepted Answer

A)  Experiments are considered valid only when they are conducted in a laboratory.
B)  Good theories do not need to be tested.
C)  Real-world observations often lead to theories.
D)  Economics, as well as other sciences, is concerned primarily with abstract concepts.E) None of the above
F) A) and D)

Question 6

Figure 2-16​ 
-Refer to Figure 2-16. The opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C is

Accepted Answer

A)  0 widgets.
B)  10 widgets.
C)  20 widgets.
D)  none of the above; the economy cannot move from point B to point C.E) A) and C)
F) All of the above

Question 7

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 8

Production is efficient if the economy is producing at a point

Accepted Answer

A)  on the production possibilities frontier.
B)  outside the production possibilities frontier.
C)  on or inside the production possibilities frontier.
D)  inside the production possibilities frontier.E) All of the above
F) B) and C)

Question 9

"Prices rise when the quantity of money rises rapidly" is an example of a

Accepted Answer

A)  negative economic statement.
B)  positive economic statement.
C)  normative economic statement.
D)  statement that contradicts one of the basic principles of economics.E) B) and C)
F) A) and B)

Question 10

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 11

When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-6 
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A)  This economy has moved from a point of inefficient production to a point of efficient production.
B)  This economy has experienced economic growth.
C)  This economy has experienced an increase in employment.
D)  None of the above is correct.E) A) and D)
F) B) and C)

Question 13

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-2 
-Refer to Figure 2-2. If the outer loop of this circular-flow diagram represents flows of dollars, then the inner loop includes

Accepted Answer

A)  flows of goods and services from households to firms.
B)  flows of inputs from households to firms.
C)  flows of rent payments paid to owners of land.
D)  flows of wages and salaries paid to workers.E) B) and C)
F) A) and C)

Question 16

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 17

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

Question 18

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 19

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

Accepted Answer

A)  The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers.
B)  Antitrust laws should be used to prevent further concentration in the wireless telephone service market.
C)  The US Department of Justice sued AT&T to block its merger with T-Mobile.
D)  The wireless telephone service market is too highly concentrated.E) All of the above
F) B) and D)

Question 20

"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

Exam 2: Thinking Like an Economist

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

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If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

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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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Macroeconomics is the study of economy-wide phenomena.

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When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve.

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Figure 2-2 -Refer to Figure 2-2. If the outer loop of this circular-flow diagram represents flows of dollars, then the inner loop includes

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Production is efficient if the economy is producing at a point

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Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C is

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In constructing models, economists

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"Prices rise when the quantity of money rises rapidly" is an example of a

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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Which of the following statements applies to economics, as well as to other sciences such as physics?

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Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

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Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

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

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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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Just like other scientific models, economic models simplify reality using

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Figure 2-22 -Refer to Figure 2-22. What is the slope of the line with points A, B, and C?

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Figure 2-16 -Refer to Figure 2-16. The opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C is

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