Question 1

When two variables have a positive correlation,

Accepted Answer

A)  when the x-variable increases, the y-variable decreases.
B)  when the x-variable decreases, the y-variable increases.
C)  when the x-variable increases, the y-variable increases.
D)  More than one of the above is correct.E) None of the above
F) C) and D)

Question 2

Figure 2-14 
-Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Accepted Answer

A) True 
 B)False

Question 3

If an economy is producing efficiently, then

Accepted Answer

A)  there is no way to produce more of one good without producing less of another good.
B)  it is possible to produce more of both goods without increasing the quantities of inputs that are being used.
C)  it is possible to produce more of one good without producing less of another good.
D)  it is not possible to produce more of any good at any cost.E) A) and B)
F) A) and D)

Question 4

Economists sometimes give conflicting advice because

Accepted Answer

A)  graduate students in economics are encouraged to argue with each other.
B)  economists have different values and scientific judgment.
C)  economists acting as scientists do not like to agree with economists acting as policy advisers.
D)  economics is more of a belief system than a science.E) B) and D)
F) C) and D)

Question 5

Larry Summers, a chief economic adviser to President Obama, stated that as a result of using Keynesian policies in 2008 and 2009,

Accepted Answer

A)  US government policy moved in a strongly activist direction.
B)  the US has shifted from worrying about an economic depression to thinking about what kind of expansion the country will have.
C)  the US has shifted from rescuing the economy to economic recovery.
D)  All of the above are correct.E) C) and D)
F) All of the above

Question 6

Figure 2-9
 
-Refer to Figure 2-9, Panel (a)  and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a)  to Panel (b)  could be caused by

Accepted Answer

A)  unemployment.
B)  an improvement in computer production technology.
C)  an improvement in printer production technology.
D)  an improvement in both computer and printer production technology.E) All of the above
F) A) and C)

Question 7

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)  a landowner leases land to a farmer
B)  a farmer hires a teenager to help with harvest
C)  a construction company rents trucks for its business
D)  a woman buys corn for dinnerE) B) and C)
F) C) and D)

Question 8

The bowed shape of the production possibilities frontier can be explained by the fact that

Accepted Answer

A)  all resources are scarce.
B)  economic growth is always occurring.
C)  the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.
D)  the only way to get more of one good is to get less of the other.E) A) and C)
F) A) and B)

Question 9

Figure 2-3 
-Refer to Figure 2-3. Inefficient production is represented by which point(s) ?

Accepted Answer

A)  J, L
B)  J, L, M
C)  K, N
D)  ME) All of the above
F) A) and B)

Question 10

Which of the following statements about economic models is correct?

Accepted Answer

A)  Economic models are built to mirror reality exactly.
B)  Economic models are useful, but they should not be used for the purpose of improving public policies.
C)  Because economic models omit many details, they allow us to see what is truly important.
D)  Economic models seldom incorporate equations or diagrams.E) C) and D)
F) A) and D)

Question 11

Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Accepted Answer

A)  the government destroys the failing markets that caused an economic crisis.
B)  innovation and enterpreneurial initiative have great power to drive economic growth.
C)  economists destroy long-held beliefs about how markets function.
D)  free markets need government intervention to create economic growth.E) B) and C)
F) A) and B)

Question 12

Unemployment would cause an economy to

Accepted Answer

A)  produce inside its production possibilities frontier.
B)  produce on its production possibilities frontier.
C)  produce outside its production possibilities frontier.
D)  experience an inward shift of its production possibilities frontier.E) A) and D)
F) All of the above

Question 13

A model can be accurately described as a

Accepted Answer

A)  theoretical abstraction with very little value.
B)  device that is useful only to the people who created it.
C)  realistic and carefully constructed theory.
D)  simplification of reality.E) A) and D)
F) None of the above

Question 14

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Accepted Answer

A) True 
 B)False

Question 15

For economists, statements about the world are of two types:

Accepted Answer

A)  assumptions and theories.
B)  true statements and false statements.
C)  specific statements and general statements.
D)  positive statements and normative statements.E) B) and C)
F) None of the above

Question 16

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is correct?

Accepted Answer

A)  A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)  A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)  A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)  A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) None of the above
F) All of the above

Question 18

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

Question 19

When economists make

Accepted Answer

A)  positive statements, they are speaking not as policy advisers but as scientists.
B)  positive statements, they are speaking not as scientists but as forecasters.
C)  normative statements, they are speaking not as policy advisers but as scientists.
D)  normative statements, they are speaking not as policy advisers but as model-builders.E) B) and C)
F) None of the above

Question 20

In principle, we can

Accepted Answer

A)  ignore positive statements when choosing among various public policy alternatives.
B)  ignore normative statements when choosing among various public policy alternatives.
C)  confirm or refute positive statements by examining evidence.
D)  confirm or refute normative statements by examining evidence.E) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

Trade-offs are involved in most policy decisions.

Correct Answer
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Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Correct Answer
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Economists sometimes give conflicting advice because

Correct Answer
verified

For economists, statements about the world are of two types:

Correct Answer
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Figure 2-9 -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct Answer
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When two variables have a positive correlation,

Correct Answer
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In principle, we can

Correct Answer
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Which of the following statements about economic models is correct?

Correct Answer
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Figure 2-14 -Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Correct Answer
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The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Correct Answer
verified

Larry Summers, a chief economic adviser to President Obama, stated that as a result of using Keynesian policies in 2008 and 2009,

Correct Answer
verified

A model can be accurately described as a

Correct Answer
verified

Which of the following is correct?

Correct Answer
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Correct Answer
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If an economy is producing efficiently, then

Correct Answer
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The bowed shape of the production possibilities frontier can be explained by the fact that

Correct Answer
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Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Correct Answer
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Unemployment would cause an economy to

Correct Answer
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Figure 2-3 -Refer to Figure 2-3. Inefficient production is represented by which point(s) ?

Correct Answer
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When economists make

Correct Answer
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Exam 2: Thinking Like an Economist

Trade-offs are involved in most policy decisions.

Correct AnswerverifiedShow Answer

Economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which

Correct AnswerverifiedShow Answer

Economists sometimes give conflicting advice because

Correct AnswerverifiedShow Answer

For economists, statements about the world are of two types:

Correct AnswerverifiedShow Answer

Figure 2-9 -Refer to Figure 2-9, Panel (a) and Panel (b) . A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

In principle, we can

Correct AnswerverifiedShow Answer

Which of the following statements about economic models is correct?

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14. When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Correct AnswerverifiedShow Answer

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Correct AnswerverifiedShow Answer

Larry Summers, a chief economic adviser to President Obama, stated that as a result of using Keynesian policies in 2008 and 2009,

Correct AnswerverifiedShow Answer

A model can be accurately described as a

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an economy is producing efficiently, then

Correct AnswerverifiedShow Answer

The bowed shape of the production possibilities frontier can be explained by the fact that

Correct AnswerverifiedShow Answer

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Correct AnswerverifiedShow Answer

Unemployment would cause an economy to

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. Inefficient production is represented by which point(s) ?

Correct AnswerverifiedShow Answer

When economists make

Correct AnswerverifiedShow Answer

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