Question 1

John Maynard Keynes referred to economics as an easy subject,

Accepted Answer

A)   at which very few excel.
B)   but not as easy as philosophy or the pure sciences.
C)   which very few can enjoy.
D)   which deals primarily with common sense.E) B) and C)
F) A) and B)

Question 2

The x-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) B) and C)
F) A) and D)

Question 3

Figure 2-22 
-Refer to Figure 2-22. Given that price is measured on the vertical axis, quantity is measured on the horizontal axis, and that the curves are downward-sloping, what type of curves are depicted here?

Accepted Answer

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

Question 4

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 5

In the circular-flow diagram, in the markets for

Accepted Answer

A)   goods and services, households and firms are both sellers.
B)   goods and services, households are buyers and firms are sellers.
C)   the factors of production, households are buyers and firms are sellers.
D)   the factors of production, households and firms are both buyers.E) C) and D)
F) A) and C)

Question 6

Figure 2-5 
-Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

Accepted Answer

A)   it is not using all of its resources.
B)   it is not using the most efficient production process.
C)   it does not have the resources and technology to produce that level of output.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 7

Economic models

Accepted Answer

A)   are people who act out the behavior of firms and households so that economists can study this behavior.
B)   are usually detailed replications of reality.
C)   incorporate simplifying assumptions that often contradict reality, but also help economists better understand reality.
D)   are useful to researchers but not to teachers because economic models omit many details of the real-world economy.E) A) and B)
F) A) and C)

Question 8

Which of the following is not correct?

Accepted Answer

A)   Evaluating statements about how the world should be involves values as well as facts.
B)   Positive statements can, in principle, be confirmed or refuted by examining evidence.
C)   Normative statements can be judged using data alone.
D)   Deciding what is good or bad policy is not just a matter of science.E) A) and B)
F) None of the above

Question 9

Economists make assumptions to

Accepted Answer

A)   mimic the methodologies employed by other scientists.
B)   minimize the number of experiments that yield no useful data.
C)   minimize the likelihood that some aspect of the problem at hand is being overlooked.
D)   focus their thinking on the essence of the problem at hand.E) A) and B)
F) B) and D)

Question 10

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)   there will be a movement along the curve.
B)   the curve will rotate clockwise.
C)   the curve will be unaffected since only the variables on the axis affect the curve.
D)   the curve will shift.E) None of the above
F) A) and D)

Question 11

Differences in scientific judgement between economists are similar to all of the following except

Accepted Answer

A)   astronomers debating whether the sun or earth was at the center of the solar system.
B)   meteorologists debating the existence of global warming.
C)   two politicians arguing about the fairness of the tax code.
D)   explorers debating whether or not the earth was flat before the time of Christopher Columbus.E) B) and C)
F) All of the above

Question 12

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

Question 13

Figure 2-16 
-Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

Accepted Answer

A)   a positive correlation.
B)   a negative correlation.
C)   a random correlation.
D)   no correlation.E) None of the above
F) A) and D)

Question 14

Economists, like mathematicians, physicists, and biologists,

Accepted Answer

A)   make use of the scientific method.
B)   try to address their subject with a scientist's objectivity.
C)   devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 15

Figure 2-4 
-Refer to Figure 2-4. Efficient production is represented by which point(s) ?

Accepted Answer

A)   Q, R, U
B)   R, T, U
C)   R, U
D)   S, TE) A) and C)
F) B) and C)

Question 16

Figure 2-23 
-Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-23 
-Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Accepted Answer

A) True 
 B)False

Question 18

The circular-flow diagram

Accepted Answer

A)   is an economic model.
B)   incorporates two types of decision makers: households and firms.
C)   represents the flows of inputs, outputs, and dollars.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

In the circular-flow diagram, in the markets for

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Figure 2-16 -Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

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When a relevant variable that is not named on either axis changes,

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Economists, like mathematicians, physicists, and biologists,

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Figure 2-23 -Refer to Figure 2-23. Points B and C represent infeasible outcomes for this economy.

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Figure 2-4 -Refer to Figure 2-4. Efficient production is represented by which point(s) ?

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Economists make assumptions to

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The circular-flow diagram

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Figure 2-23 -Refer to Figure 2-23. The opportunity cost of an additional doghouse increases as more doghouses are produced.

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Differences in scientific judgement between economists are similar to all of the following except

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John Maynard Keynes referred to economics as an easy subject,

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

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

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Which of the following is not correct?

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Economic models

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The x-coordinate of an ordered pair specifies the

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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

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Figure 2-22 -Refer to Figure 2-22. Given that price is measured on the vertical axis, quantity is measured on the horizontal axis, and that the curves are downward-sloping, what type of curves are depicted here?

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Figure 2-5 -Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

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In the circular-flow diagram, one loop represents the flow of goods and services, and the other loop represents the flow of factors of production.

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