Question 1

Table 2-4
Production Possibilities for Picnicland
 
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

Accepted Answer

A)   150 burgers
B)   225 burgers
C)   300 burgers
D)   450 burgersE) A) and B)
F) A) and C)

Question 2

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Accepted Answer

A) True 
 B)False

Question 3

Table 2-6
 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Accepted Answer

The answer of Table 2-6
 
-Refer to Table 2-6. Consider...

Question 4

You know an economist has crossed the line from policy adviser to scientist when he or she

Accepted Answer

A)   claims that the problem at hand is widely misunderstood by non-economists.
B)   makes positive statements.
C)   talks about values.
D)   makes a claim about how the world should be.E) B) and C)
F) A) and C)

Question 5

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) None of the above

Question 6

When studying the effects of changes in public policy, economists believe that

Accepted Answer

A)   it is important to distinguish between the short run and the long run.
B)   the assumptions used in studying those effects should be the same for the short run as for the long run.
C)   the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)   the long-run effects of those changes are always more beneficial to society than are the short-run effects.E) C) and D)
F) None of the above

Question 7

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

Question 8

In the circular-flow diagram, factors of production include land, labor, and capital.

Accepted Answer

A) True 
 B)False

Question 9

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) A) and B)
F) None of the above

Question 10

Figure 2-9
Panel a)  Panel b) 
  
-Refer to Figure 2-9, Panel a) . Production is

Accepted Answer

A)   possible at points J, K, L, and M, but efficient only at points J, L, and M.
B)   possible at points J, K, L, and M, but efficient only at point K.
C)   possible at points J, L, M, and N, but efficient only at points J, L, and M.
D)   possible at points J, L, M, and N, but efficient only at point N.E) All of the above
F) A) and C)

Question 11

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) B) and D)
F) All of the above

Question 12

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 B)
F) B) and C)

Question 13

Figure 2-16 
-Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Accepted Answer

A)   The less coffee a person drinks per day, the more time he can go without sleep.
B)   There is no relationship between how much coffee per day a person drinks and how long he can go without sleep.
C)   The more coffee a person drinks per day, the more time he can go without sleep.
D)   The more coffee a person drinks per day, the less time he can go without sleep.E) C) and D)
F) A) and B)

Question 14

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 15

Economists believe that production possibilities frontiers

Accepted Answer

A)   never have a bowed shape.
B)   rarely have a bowed shape.
C)   often have a bowed shape.
D)   always have a bowed shape.E) A) and C)
F) A) and B)

Question 16

Macroeconomics is the study of economy-wide phenomena.

Accepted Answer

A) True 
 B)False

Question 17

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

Question 18

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 19

Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Accepted Answer

Council of...

Question 20

Figure 2-5 
-Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Accepted Answer

A)   0 dryers and 100 washers.
B)   60 dryers and 50 washers.
C)   80 dryers and 0 washers.
D)   80 dryers and 50 washers.E) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

In the circular-flow diagram, factors of production include land, labor, and capital.

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

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Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Correct AnswerverifiedCouncil of...View AnswerShow Answer

The scientific method is applicable to studying

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The scientific method can be applied to the study of economics.

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

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Figure 2-16 -Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

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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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Economists believe that production possibilities frontiers

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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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Figure 2-5 -Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

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The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

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When studying the effects of changes in public policy, economists believe that

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You know an economist has crossed the line from policy adviser to scientist when he or she

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Macroeconomics is the study of economy-wide phenomena.

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Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

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When economists are trying to explain the world, they are

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Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . Production is

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Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

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Production is efficient if the economy is producing at a point

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Council of...
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