Question 1

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) C) and D)
F) None of the above

Question 2

Figure 2-9
Panel (a)  Panel (b)   
-Refer to Figure 2-9, Panel (a) . Production at point K is

Accepted Answer

A)   possible and efficient.
B)   possible but inefficient.
C)   impossible but efficient.
D)   impossible and inefficient.E) None of the above
F) A) and B)

Question 3

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Accepted Answer

A)   the impact of minimum-wage laws on employment in the fast food industry
B)   the effect of changes in household saving rates on the growth rate of national income
C)   the impact of faster money growth on the rate of inflation
D)   a comparison of alternative tax policies and their respective impacts on the rate of the nation's economic growthE) A) and B)
F) None of the above

Question 5

Figure 2-22 
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively...

Question 6

A model that shows how dollars flow through markets among households and firms is called the

Accepted Answer

A)   production possibilities frontier.
B)   circular-flow diagram.
C)   demand and supply diagram.
D)   comparative advantage model.E) C) and D)
F) A) and B)

Question 7

The second number in any ordered pair is

Accepted Answer

A)   the x-coordinate.
B)   the y-coordinate.
C)   the horizontal location of the point.
D)   the slope.E) B) and C)
F) All of the above

Question 8

When an economist evaluates a positive statement, he or she is primarily

Accepted Answer

A)   examining evidence.
B)   acting as a scientist.
C)   concerned with verifying how the world is.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 9

Figure 2-7 
-Refer to Figure 2-7. This economy cannot produce at which point(s) ?

Accepted Answer

A)   L, M
B)   N, O, P, Q
C)   N, O, P
D)   QE) B) and D)
F) A) and D)

Question 10

In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of

Accepted Answer

A)   omitted variables.
B)   reverse causality.
C)   government propaganda.
D)   medical incompetence.E) A) and D)
F) All of the above

Question 11

A demand curve shows the relationship

Accepted Answer

A)   between income and quantity demanded.
B)   between price and income.
C)   between price and quantity demanded.
D)   among income, price, and quantity demanded.E) None of the above
F) A) and C)

Question 12

In the circular-flow diagram, payments for labor, land, and capital flow from firms to households through the markets for the factors of production.

Accepted Answer

A) True 
 B)False

Question 13

Figure 2-17 
-Refer to Figure 2-17. The curves shown are

Accepted Answer

A)   supply curves.
B)   demand curves.
C)   preference curves.
D)   income-consumption curves.E) All of the above
F) None of the above

Question 14

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 15

Figure 2-21 
-Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Accepted Answer

A)   the price of snowblowers
B)   a change in consumers' incomes
C)   a change in the seasons
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 16

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Accepted Answer

A)   households
B)   firms
C)   government
D)   markets for factors of productionE) B) and C)
F) A) and B)

Question 17

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) A) and B)
F) A) and C)

Question 18

One way to characterize the difference between positive statements and normative statements is as follows:

Accepted Answer

A)   Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future.
B)   Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.
C)   Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation.
D)   Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.E) A) and B)
F) None of the above

Question 19

Figure 2-10
Panel (a)  Panel (b)   
-Refer to Figure 2-10, Panel (a) . To gain 2 tractors by moving from point W to point V, society must sacrifice

Accepted Answer

A)   12 sofas.
B)   employment.
C)   efficiency.
D)   More than one of the above is correct.E) C) and D)
F) B) and C)

Question 20

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a(n)

Accepted Answer

A)   pie chart.
B)   bar graph.
C)   time-series graph
D)   coordinate system.E) B) and D)
F) All of the above

Exam 2: Thinking Like an Economist

A demand curve shows the relationship

Correct Answer
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A model that shows how dollars flow through markets among households and firms is called the

Correct Answer
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When an economist evaluates a positive statement, he or she is primarily

Correct Answer
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In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct Answer
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The second number in any ordered pair is

Correct Answer
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Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Correct Answer
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negatively...
View Answer

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a(n)

Correct Answer
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One way to characterize the difference between positive statements and normative statements is as follows:

Correct Answer
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Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct Answer
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The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Correct Answer
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Figure 2-17 -Refer to Figure 2-17. The curves shown are

Correct Answer
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Figure 2-21 -Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Correct Answer
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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . To gain 2 tractors by moving from point W to point V, society must sacrifice

Correct Answer
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The goal of an economist who formulates new theories is to

Correct Answer
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Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . Production at point K is

Correct Answer
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In the circular-flow diagram, payments for labor, land, and capital flow from firms to households through the markets for the factors of production.

Correct Answer
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Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which point(s) ?

Correct Answer
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Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Correct Answer
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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.

Correct Answer
verified

Exam 2: Thinking Like an Economist

A demand curve shows the relationship

Correct AnswerverifiedShow Answer

A model that shows how dollars flow through markets among households and firms is called the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When an economist evaluates a positive statement, he or she is primarily

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct AnswerverifiedShow Answer

The second number in any ordered pair is

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Correct Answerverifiednegatively...View AnswerShow Answer

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a(n)

Correct AnswerverifiedShow Answer

One way to characterize the difference between positive statements and normative statements is as follows:

Correct AnswerverifiedShow Answer

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct AnswerverifiedShow Answer

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Correct AnswerverifiedShow Answer

Figure 2-17 -Refer to Figure 2-17. The curves shown are

Correct AnswerverifiedShow Answer

Figure 2-21 -Refer to Figure 2-21. Which of the following could be an omitted variable in the graph?

Correct AnswerverifiedShow Answer

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . To gain 2 tractors by moving from point W to point V, society must sacrifice

Correct AnswerverifiedShow Answer

The goal of an economist who formulates new theories is to

Correct AnswerverifiedShow Answer

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a) . Production at point K is

Correct AnswerverifiedShow Answer

In the circular-flow diagram, payments for labor, land, and capital flow from firms to households through the markets for the factors of production.

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. This economy cannot produce at which point(s) ?

Correct AnswerverifiedShow Answer

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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negatively...
View Answer

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