Question 1

Economists build economic models by

Accepted Answer

A)  generating data.
B)  conducting controlled experiments in a lab.
C)  making assumptions.
D)  reviewing statistical forecasts.E) A) and D)
F) A) and C)

Question 2

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

Question 3

Figure 2-5 
-Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Accepted Answer

A)  0 washers.
B)  20 washers.
C)  40 washers.
D)  None of the above; the economy cannot move from point D to point C.E) B) and C)
F) A) and D)

Question 4

A production possibilities frontier shifts outward when

Accepted Answer

A)  the economy experiences economic growth.
B)  the desires of the economy's citizens change.
C)  at least one of the basic principles of economics is violated.
D)  opportunity costs are lessened.E) A) and D)
F) C) and D)

Question 5

Where can an economy not produce?

Accepted Answer

A)  inside its production possibilities frontier
B)  on its production possibilities frontier
C)  outside its production possibilities frontier
D)  at the endpoints of its production possibilities frontierE) A) and B)
F) A) and C)

Question 6

Economic models are most often composed of diagrams and equations.

Accepted Answer

A) True 
 B)False

Question 7

Figure 2-11 
-Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Accepted Answer

A)  simultaneous technological advances in the book and DVD industries.
B)  a reallocation of resources away from the production of DVDs and toward the production of books.
C)  economic growth.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 8

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)  can only show variables that are positively related.
B)  can only show variables that have a negative correlation.
C)  provide information on only one variable.
D)  provide information on no more than two variables.E) A) and D)
F) B) and C)

Question 9

Figure 2-15 
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Accepted Answer

The answer of Figure 2-15 
-Refer to Figure 2-15. Consider...

Question 10

Figure 2-7 
-Refer to Figure 2-7. Efficient production is represented by which point(s) ?

Accepted Answer

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

Question 11

Figure 2-1 
-Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Accepted Answer

A)  A only
B)  A and B
C)  C only
D)  C and DE) A) and D)
F) None of the above

Question 12

What you must give up to get something else is called the

Accepted Answer

The answer of What you must give up to get...

Question 13

Figure 2-22 
-Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Accepted Answer

movement a...

Question 14

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Accepted Answer

A)  Collect and analyze data.
B)  Go to a laboratory and generate data to test the theory.
C)  Publish the theory without testing it.
D)  Consult with other economists to see they agree with the theory.E) A) and D)
F) C) and D)

Question 15

Which of the following statements is correct?

Accepted Answer

A)  Few economic models incorporate assumptions.
B)  Different economic models employ different sets of assumptions.
C)  Good economic models attempt to mimic reality as closely as possible.
D)  Economic models, to be accepted, must be tested by conducting experiments.E) B) and C)
F) All of the above

Question 16

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

Accepted Answer

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

Question 17

In the circular-flow diagram,

Accepted Answer

A)  factors of production flow from government to firms.
B)  goods and services flow from households to firms.
C)  income paid to the factors of production flows from firms to households.
D)  spending on goods and services flows from firms to households.E) A) and B)
F) A) and C)

Question 18

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a.On the graph, identify the area of feasible outcomes and the area of infeasible outcomes.
b.On the graph, label a point that is efficient and a point that is inefficient.
c.On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy.
d.On a second graph, illustrate the effect of a new computerized assembly line in the production of hammers on this economy.

Accepted Answer

The answer of Draw a production possibilities frontier showing increasing...

Question 19

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 D)
F) None of the above

Question 20

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. In the ordered pair (8, 24)

Accepted Answer

A)  the x-coordinate is 8 and the y-coordinate is 24.
B)  the x-coordinate is 24 and the y-coordinate is 8.
C)  the numbers tell the location of the origin.
D)  the 8 represents the price and the 24 represents the number of restaurant meals.E) B) and C)
F) C) and D)

Exam 2: Thinking Like an Economist

Where can an economy not produce?

Correct Answer
verified

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

Correct Answer
verified

Economists build economic models by

Correct Answer
verified

Economic models are most often composed of diagrams and equations.

Correct Answer
verified

Graphs such as bar graphs and pie charts are limited in that they

Correct Answer
verified

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Correct Answer
verified

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Correct Answer
verified

A production possibilities frontier shifts outward when

Correct Answer
verified

Correct Answer
verified

What you must give up to get something else is called the

Correct Answer
verified

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Correct Answer
verified
movement a...
View Answer

Economic models

Correct Answer
verified

Figure 2-7 -Refer to Figure 2-7. Efficient production is represented by which point(s) ?

Correct Answer
verified

John Maynard Keynes believed the ideas of economists to be

Correct Answer
verified

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Correct Answer
verified

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair (8, 24)

Correct Answer
verified

Figure 2-1 -Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

Exam 2: Thinking Like an Economist

Where can an economy not produce?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists build economic models by

Correct AnswerverifiedShow Answer

Economic models are most often composed of diagrams and equations.

Correct AnswerverifiedShow Answer

Graphs such as bar graphs and pie charts are limited in that they

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

Correct AnswerverifiedShow Answer

Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?

Correct AnswerverifiedShow Answer

A production possibilities frontier shifts outward when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What you must give up to get something else is called the

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Correct Answerverifiedmovement a...View AnswerShow Answer

Economic models

Correct AnswerverifiedShow Answer

Figure 2-7 -Refer to Figure 2-7. Efficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

John Maynard Keynes believed the ideas of economists to be

Correct AnswerverifiedShow Answer

Figure 2-11 -Refer to Figure 2-11. The shift of the production possibilities frontier from A to B illustrates

Correct AnswerverifiedShow Answer

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair (8, 24)

Correct AnswerverifiedShow Answer

Figure 2-1 -Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
movement a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified