Question 1

Figure 2-6 
-Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Accepted Answer

A)   zero.
B)   40 blankets.
C)   120 pillows.
D)   360 blankets.E) B) and C)
F) A) and B)

Question 2

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Accepted Answer

A)   is useless, since the real world has many countries trading many goods.
B)   can be useful only in situations involving two countries and two goods.
C)   can be useful in the classroom, but is useless in the real world.
D)   can be useful in helping economists understand the complex world of international trade involving many countries and many goods.E) A) and C)
F) A) and B)

Question 3

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

Accepted Answer

A)   the effects of rent control on the availability of housing in New York City
B)   the economic impact of tornadoes on cities and towns in Oklahoma
C)   how tariffs on shoes affects the shoe industry
D)   the effect on the economy of changes in the nation's unemployment rateE) A) and B)
F) A) and C)

Question 4

In the circular-flow diagram, another name for goods and services produced by firms is

Accepted Answer

A)   factors of production.
B)   output.
C)   inputs.
D)   resources.E) None of the above
F) A) and B)

Question 5

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Accepted Answer

A) True 
 B)False

Question 6

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Accepted Answer

A) True 
 B)False

Question 7

Table 2-4
Production Possibilities for Picnicland 
-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Accepted Answer

A)   150 hotdogs
B)   225 hotdogs
C)   300 hotdogs
D)   450 hotdogsE) None of the above
F) All of the above

Question 8

The slope of a steep upward-sloping line will be a

Accepted Answer

A)   small positive number.
B)   large positive number.
C)   small negative number.
D)   large negative number.E) B) and C)
F) A) and D)

Question 9

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

Accepted Answer

A) True 
 B)False

Question 10

The circular-flow diagram is a

Accepted Answer

A)   visual model of the economy.
B)   visual model of the relationships among money, prices, and businesses.
C)   model that shows the effects of government on the economy.
D)   mathematical model of how the economy works.E) None of the above
F) C) and D)

Question 11

Economists at which administrative department help design tax policy?

Accepted Answer

Department...

Question 12

Figure 2-6 
-Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

Accepted Answer

A)   0 blankets and 360 pillows.
B)   200 blankets and 240 pillows.
C)   320 blankets and 120 pillows.
D)   360 blankets and 0 pillows.E) None of the above
F) All of the above

Question 13

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Accepted Answer

The answer of Is the following a positive or normative...

Question 14

Figure 2-7 
-Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

Accepted Answer

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

Question 15

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two.
-Refer to Figure 2-14. Which point(s) on the graph is(are) unattainable given current resources and technology?

Accepted Answer

The answer of Figure 2-14  Consider the production possibilities...

Question 16

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)   households and firms are both buyers.
B)   households and firms are both sellers.
C)   households are buyers and firms are sellers.
D)   households are sellers and firms are buyers.E) B) and C)
F) A) and D)

Question 17

Which of the following statements is (are)  correct?

Accepted Answer

A)   Relative to some other scientists, economists find it more difficult to conduct experiments.
B)   Theory and observation are important in economics as well as in other sciences.
C)   To obtain data, economists often rely upon the natural experiments offered by history.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 18

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 19

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Accepted Answer

A) True 
 B)False

Question 20

Who would be more likely to study the effects of rent control on housing in New York City, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Exam 2: Thinking Like an Economist

Figure 2-7 -Refer to Figure 2-7. This economy has the ability to produce at which point(s) ?

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When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other depends on how much of each good is being produced.

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Economists at which administrative department help design tax policy?

Correct AnswerverifiedDepartment...View AnswerShow Answer

In the markets for goods and services in the circular-flow diagram,

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Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

Correct AnswerverifiedShow Answer

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Correct AnswerverifiedShow Answer

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The unemployment rate in Nevada is higher than the unemployment rate in New York.

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of rent control on housing in New York City, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. Which point(s) on the graph is(are) unattainable given current resources and technology?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

Correct AnswerverifiedShow Answer

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Correct AnswerverifiedShow Answer

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

The slope of a steep upward-sloping line will be a

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

Which of the following statements is (are) correct?

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In the circular-flow diagram, another name for goods and services produced by firms is

Correct AnswerverifiedShow Answer

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Department...
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