Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Accepted Answer

The answer of When economists are trying to explain the...

Question 3

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Accepted Answer

A) True 
 B)False

Question 4

In addition to advising the president, one duty of the Council of Economic Advisers is to

Accepted Answer

A)   prepare the federal budget.
B)   write government regulations.
C)   advise Congress on economic matters.
D)   write the annual Economic Report of the President.E) A) and B)
F) A) and C)

Question 5

Economic models

Accepted Answer

A)   are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models.
B)   are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models.
C)   are simplifications of reality, and in this respect economic models are no different from other scientific models.
D)   are simplifications of reality, and in this respect economic models are very different from other scientific models.E) None of the above
F) A) and B)

Question 6

Figure 2-17 
-Refer to Figure 2-17. The slope of the curve between points A and B is

Accepted Answer

A)   -5
B)   -1/5
C)   1/5
D)   5E) B) and D)
F) B) and C)

Question 7

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) A) and B)
F) A) and C)

Question 8

When economists disagree about whether a policy is fair, they are expressing a difference in

Accepted Answer

The answer of When economists disagree about whether a policy...

Question 9

In conducting their research, economists often substitute historical events and historical episodes for

Accepted Answer

A)   theories and observations.
B)   laboratory experiments.
C)   models.
D)   assumptions.E) B) and D)
F) B) and C)

Question 10

Which of the following is a correct statement about production possibilities frontiers?

Accepted Answer

A)   An economy can produce only on the production possibilities frontier.
B)   An economy can produce at any point inside or outside a production possibilities frontier.
C)   An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier.
D)   An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.E) None of the above
F) A) and C)

Question 11

Figure 2-2 
-Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

Accepted Answer

A)   Box D must represent the markets for factors of production.
B)   Box C must represent the markets for goods and services.
C)   firms are buyers in the markets represented by Box D.
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 12

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 13

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) B) and C)
F) A) and C)

Question 14

Figure 2-3 
-Refer to Figure 2-3. What is the name of the model depicted in the figure?

Accepted Answer

The answer of Figure 2-3 
-Refer to Figure 2-3. What...

Question 15

Which of the following is not an example of a graph of a single variable?

Accepted Answer

A)   a pie chart
B)   a bar graph
C)   a time-series graph
D)   a scatterplotE) B) and C)
F) All of the above

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Accepted Answer

A) True 
 B)False

Question 18

Table 2-3
Production Possibilities for Footville
 
-Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Accepted Answer

A)   400 socks
B)   300 socks
C)   200 socks
D)   100 socksE) None of the above
F) A) and B)

Question 19

In the circular-flow diagram, which of the following items does not flow from firms to households?

Accepted Answer

A)   goods
B)   services
C)   capital
D)   profitE) A) and D)
F) A) and C)

Question 20

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

Exam 2: Thinking Like an Economist

In the circular-flow diagram, which of the following items does not flow from firms to households?

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Figure 2-17 -Refer to Figure 2-17. The slope of the curve between points A and B is

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

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Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

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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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Figure 2-3 -Refer to Figure 2-3. What is the name of the model depicted in the figure?

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Normative statements are not

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Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

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Economic models

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All scientific models, including economic models, simplify reality in order to improve our understanding of it.

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When economists disagree about whether a policy is fair, they are expressing a difference in

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Which of the following is a correct statement about production possibilities frontiers?

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

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When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Correct AnswerverifiedShow Answer

A circular-flow diagram is a visual model of the economy.

Correct AnswerverifiedShow Answer

In addition to advising the president, one duty of the Council of Economic Advisers is to

Correct AnswerverifiedShow Answer

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Correct AnswerverifiedShow Answer

In conducting their research, economists often substitute historical events and historical episodes for

Correct AnswerverifiedShow Answer

Economists, like mathematicians, physicists, and biologists,

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Which of the following is not an example of a graph of a single variable?

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