Question 1

Economists regard events from the past as

Accepted Answer

A)   irrelevant, since history is unlikely to repeat itself.
B)   of limited interest, since those events seldom provide any useful economic data.
C)   interesting but not particularly valuable, since those events cannot be used to evaluate present-day economic theories.
D)   interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future.E) C) and D)
F) A) and D)

Question 2

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)   opinions and education.
B)   opinions and values.
C)   scientific judgments and education.
D)   scientific judgments and values.E) C) and D)
F) B) and C)

Question 3

When a relevant variable that is not named on either axis changes,

Accepted Answer

A)   there will be a movement along the curve.
B)   the curve will rotate clockwise.
C)   the curve will be unaffected since only the variables on the axis affect the curve.
D)   the curve will shift.E) A) and D)
F) None of the above

Question 4

Figure 2-15
Relationship between Price and Cups of Coffee
 
-Refer to Figure 2-15. 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 5

A statement describing how the world should be

Accepted Answer

A)   is a normative statement.
B)   is a positive statement.
C)   would only be made by an economist speaking as a scientist.
D)   would only be made by an economist employed by the government.E) B) and C)
F) A) and D)

Question 6

Normative statements are

Accepted Answer

A)   descriptive.
B)   claims about how the world should be.
C)   claims about how the world is.
D)   made by economists speaking as scientists.E) B) and C)
F) B) and D)

Question 7

When two variables move in opposite directions, the curve relating them is

Accepted Answer

A)   upward sloping, and we say the variables are positively related.
B)   upward sloping, and we say the variables are negatively related.
C)   downward sloping, and we say the variables are positively related.
D)   downward sloping, and we say the variables are negatively related.E) None of the above
F) A) and B)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

President Truman once said the wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Accepted Answer

A)   is rooted in the principle that people face tradeoffs.
B)   indicates that economists recognize that there are opportunity costs associated with policy decisions.
C)   confirms that economists are not suited to be presidential advisers.
D)   More than one of the above is correct.E) A) and C)
F) B) and C)

Question 10

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 1050 units of food and 47 machines. Which of the following statements is correct?

Accepted Answer

A)   Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 47.
B)   Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry.
C)   In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies.
D)   The technological advance reduced the amount of resources needed to produce 47 machines, so these resources could be used to produce more food.E) A) and B)
F) All of the above

Question 11

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an example of using the scientific method with a natural experiment?

Accepted Answer

A)   Measuring how long it takes a marble to fall from a ten story building.
B)   Comparing plant growth with and without a soil additive.
C)   Tracking the price of oil when a war in the Middle East interrupts the flow of crude oil.
D)   Observing the reaction when two chemicals are mixed together.E) A) and B)
F) None of the above

Question 13

"The US should not restrict employers from outsourcing work to foreign countries" is a normative statement.

Accepted Answer

A) True 
 B)False

Question 14

In the circular-flow diagram, factors of production include land, labor, and capital.

Accepted Answer

A) True 
 B)False

Question 15

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Accepted Answer

A) True 
 B)False

Question 16

Figure 2-8
 
-Refer to Figure 2-8, 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) A) and B)
F) A) and C)

Question 17

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Accepted Answer

A)   the Federal Reserve
B)   the Congressional Budget Office
C)   the Department of the Treasury
D)   the Department of CommerceE) B) and D)
F) None of the above

Question 18

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

Accepted Answer

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

Question 19

In the simple circular-flow diagram, the participants in the economy are

Accepted Answer

A)   firms and government.
B)   households and firms.
C)   households and government.
D)   households, firms, and government.E) All of the above
F) A) and B)

Question 20

The slope of a line is equal to

Accepted Answer

A)   the change in the value of x divided by the change in the value of y.
B)   the change in the value of y divided by the change in the value of x.
C)   the horizontal distance divided by the vertical distance.
D)   the value of y divided by the value of x.E) B) and C)
F) A) and C)

Exam 2: Thinking Like an Economist

Normative statements are

Correct Answer
verified

When two variables move in opposite directions, the curve relating them is

Correct Answer
verified

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Correct Answer
verified

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Correct Answer
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Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. The slope of the line containing points Y and Z is

Correct Answer
verified

When a relevant variable that is not named on either axis changes,

Correct Answer
verified

Economists regard events from the past as

Correct Answer
verified

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

Correct Answer
verified

President Truman once said the wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Correct Answer
verified

A statement describing how the world should be

Correct Answer
verified

Which of the following is an example of using the scientific method with a natural experiment?

Correct Answer
verified

In the simple circular-flow diagram, the participants in the economy are

Correct Answer
verified

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct Answer
verified

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Correct Answer
verified

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

Correct Answer
verified

"The US should not restrict employers from outsourcing work to foreign countries" is a normative statement.

Correct Answer
verified

The slope of a line is equal to

Correct Answer
verified

Correct Answer
verified

In the circular-flow diagram, factors of production include land, labor, and capital.

Correct Answer
verified

Figure 2-8 -Refer to Figure 2-8, Panel (a) . Production at point K is

Correct Answer
verified

Exam 2: Thinking Like an Economist

Normative statements are

Correct AnswerverifiedShow Answer

When two variables move in opposite directions, the curve relating them is

Correct AnswerverifiedShow Answer

Since 1946, the president of the United States has received guidance from the Council of Economic Advisers.

Correct AnswerverifiedShow Answer

Economists who are primarily responsible for advising Congress on economic matters work in which agency?

Correct AnswerverifiedShow Answer

Figure 2-15 Relationship between Price and Cups of Coffee -Refer to Figure 2-15. The slope of the line containing points Y and Z is

Correct AnswerverifiedShow Answer

When a relevant variable that is not named on either axis changes,

Correct AnswerverifiedShow Answer

Economists regard events from the past as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

President Truman once said the wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Correct AnswerverifiedShow Answer

A statement describing how the world should be

Correct AnswerverifiedShow Answer

Which of the following is an example of using the scientific method with a natural experiment?

Correct AnswerverifiedShow Answer

In the simple circular-flow diagram, the participants in the economy are

Correct AnswerverifiedShow Answer

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct AnswerverifiedShow Answer

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

"The US should not restrict employers from outsourcing work to foreign countries" is a normative statement.

Correct AnswerverifiedShow Answer

The slope of a line is equal to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the circular-flow diagram, factors of production include land, labor, and capital.

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8, Panel (a) . Production at point K is

Correct AnswerverifiedShow Answer

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