Question 1

Use the following Figure to answer the question :  Figure 2-9
Panel a) 
 
Panel b)  
-Refer to Figure 2-9, Panel a) . The opportunity cost of one cup of coffee is highest when the economy produces

Accepted Answer

A)   0 cups of coffee.
B)   2 cups of coffee.
C)   4 cups of coffee.
D)   6 cups of coffee.E) A) and B)
F) A) and D)

Question 2

Use the following Figure to answer the question : Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. The slope of the line containing points Y and Z is

Accepted Answer

A)   -0.5.
B)   -1.
C)   -2.
D)   -4.E) None of the above
F) A) and B)

Question 3

Use the following Figure to answer the question : Figure 2-3 : 
-Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

Accepted Answer

The answer of Use the following Figure to answer the...

Question 4

The Council of Economic Advisers

Accepted Answer

A)   was created in 1946.
B)   advises the president of the United States on economic policy matters.
C)   writes the annual Economic Report of the President.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 5

For economists, conducting experiments is often difficult and sometimes impossible.

Accepted Answer

A) True 
 B)False

Question 6

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)   One economist believes the North American Free Trade Agreement NAFT
A)   has led to a loss of American jobs; another economist disputes this claim.
B)   One economist believes that when income taxes are cut, people will increase their spending; another economist believes that when income taxes are cut, people will increase their saving.
C)   One economist advises against increases in sales taxes because she thinks such increases are unfair to low- income people; another economist disputes the idea that increases in sales taxes are unfair to low-income people.
D)   One economist believes that, prior to the Civil War, slavery contributed to economic growth in the South; another economist believes that slavery held back the South's economic growth.E) A) and B)
F) All of the above

Question 7

Normative statements are not

Accepted Answer

A)   descriptive.
B)   prescriptive.
C)   claims about how the world should be.
D)   made by economists speaking as policy advisers.E) None of the above
F) A) and D)

Question 8

In the markets for factors of production in the circular-flow diagram,

Accepted Answer

A)   households provide firms with labor, land, and capital.
B)   households provide firms with savings for investment.
C)   firms provide households with goods and services.
D)   firms provide households with revenue.E) A) and C)
F) B) and C)

Question 9

A circular-flow diagram is a model that

Accepted Answer

A)   helps to explain how participants in the economy interact with one another.
B)   helps to explain how the economy is organized.
C)   incorporates all aspects of the real economy.
D)   Both a)  and b)  are correct.E) None of the above
F) B) and C)

Question 10

Use the following Figure to answer the question : Figure 2-14 :  Consider the production possibilities curve for a country that can produce sweaters, apples in bushels), or a combination of the two.
-Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q?

Accepted Answer

80 bushels...

Question 11

Use the following Figure to answer the question : 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 Use the following Figure to answer the...

Question 12

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Accepted Answer

A) True 
 B)False

Question 13

Microeconomics and macroeconomics are closely intertwined.

Accepted Answer

A) True 
 B)False

Question 14

John Maynard Keynes believed the ideas of economists to be

Accepted Answer

A)   generally incorrect.
B)   powerful.
C)   academic and without practical application.
D)   rantings of madmen.E) C) and D)
F) B) and D)

Question 15

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

Accepted Answer

A) True 
 B)False

Question 16

Use the following Figure to answer the question :  Figure 2-9
Panel a) 
 
Panel b)  
-Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point K to point L is

Accepted Answer

A)   0 cups of coffee.
B)   1 donut.
C)   2 donuts.
D)   4 cups of coffee.E) A) and B)
F) A) and C)

Question 17

Evaluating normative statements involves values as well as facts.

Accepted Answer

A) True 
 B)False

Question 18

Albert Einstein once made the following observation about science:

Accepted Answer

A)   "The whole of science is nothing more than the refinement of everyday thinking."
B)   "The whole of science is nothing more than an interesting intellectual exercise."
C)   "In order to understand science, one must rely solely on abstraction."
D)   "In order to understand science, one must transcend everyday thinking."E) A) and D)
F) C) and D)

Question 19

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Accepted Answer

A) True 
 B)False

Question 20

In building economic models, economists often omit

Accepted Answer

A)   assumptions.
B)   theories.
C)   details.
D)   equations.E) None of the above
F) B) and D)

Exam 2: Thinking Like an Economist

The Council of Economic Advisers

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Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of moving from point K to point L is

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John Maynard Keynes believed the ideas of economists to be

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Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What does the arrow going from oval B to rectangle 2 represent in the figure?

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In building economic models, economists often omit

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In the markets for factors of production in the circular-flow diagram,

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For economists, conducting experiments is often difficult and sometimes impossible.

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Evaluating normative statements involves values as well as facts.

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The trade-off between the production of one good and the production of another good can change over time because of technological advances.

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Use the following Figure to answer the question : Figure 2-14 : Consider the production possibilities curve for a country that can produce sweaters, apples in bushels), or a combination of the two. -Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q?

Correct Answerverified80 bushels...View AnswerShow Answer

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

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Microeconomics and macroeconomics are closely intertwined.

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Normative statements are not

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Albert Einstein once made the following observation about science:

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A circular-flow diagram is a model that

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A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

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Use the following Figure to answer the question : Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points Y and Z is

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Use the following Figure to answer the question : Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The opportunity cost of one cup of coffee is highest when the economy produces

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Use the following Figure to answer the question : 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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A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

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80 bushels...
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