Question 1

Positive statements are

Accepted Answer

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

Question 2

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)   should produce.
B)   wants to produce.
C)   can produce.
D)   demands.E) B) and C)
F) A) and B)

Question 3

Differences in scientific judgement between economists are similar to all of the following except

Accepted Answer

A)   astronomers debating whether the sun or earth was at the center of the solar system.
B)   meteorologists debating the existence of global warming.
C)   two politicians arguing about the fairness of the tax code.
D)   explorers debating whether or not the earth was flat before the time of Christopher Columbus.E) A) and D)
F) A) and C)

Question 4

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

Question 5

Economists make use of assumptions, some of which are unrealistic, for the purpose of

Accepted Answer

A)   teaching economics to people who have never before studied economics.
B)   advancing their political agendas.
C)   developing models when the scientific method cannot be used.
D)   focusing their thinking.E) A) and D)
F) A) and C)

Question 6

Figure 2-8 
-Refer to Figure 2-8. To reach point L, the economy would have to

Accepted Answer

A)   acquire more resources or experience a technological advance.
B)   begin using its available resources more efficiently than it is currently using them.
C)   shift resources away from the production of nails and toward the production of hammers.
D)   None of the above are correct; the economy will never be able to reach point L.E) B) and C)
F) A) and D)

Question 7

Positive statements can be evaluated using data alone, but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 8

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

Accepted Answer

A)   shift to the right.
B)   shift to the left.
C)   not shift; instead, Martina will move along her demand curve downward and to the right.
D)   not shift; instead, Martina will move along her demand curve upward and to the left.E) C) and D)
F) B) and D)

Question 9

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

Question 10

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Accepted Answer

A) True 
 B)False

Question 11

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)   would likely be made by an economist acting as a policy advisor.
B)   would require values and data to be evaluated.
C)   would require data but not values to be evaluated.
D)   could not be evaluated by economists acting as scientists.E) All of the above
F) A) and C)

Question 12

Which of the following is not correct?

Accepted Answer

A)   When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words.
B)   Graphs are one way of expressing the relationships among variables.
C)   When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects.
D)   When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns.E) A) and B)
F) A) and C)

Question 13

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

Question 14

In the ordered pair (20, 30) , 20 is the

Accepted Answer

A)   the x-coordinate.
B)   the horizontal location of the point.
C)   the y-coordinate.
D)   Both a and b are correct.E) None of the above
F) B) and D)

Question 15

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 16

Figure 2-18
Relationship between Price and Restaurant Meals 
-Refer to Figure 2-18. Which of the following could result in a movement from point B to point Z?

Accepted Answer

A)   a change in the price of a restaurant meal
B)   a change in the number of restaurant meals demanded
C)   a change in income
D)   Both a and b are correct.E) A) and C)
F) B) and C)

Question 17

When an economist evaluates a positive statement, he or she is primarily

Accepted Answer

A)   examining evidence.
B)   acting as a scientist.
C)   concerned with verifying how the world is.
D)   All of the above are correct.E) A) and C)
F) A) and B)

Question 18

Figure 2-12 
-Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

A)   a decrease in unemployment
B)   a technological advance in the consumer goods industries
C)   a general technological advance
D)   an increase in the availability of capital-producing resourcesE) A) and C)
F) None of the above

Question 19

Economists at which administrative department help formulate spending plans and regulatory policies?

Accepted Answer

Office of ...

Question 20

Figure 2-22 
-Refer to Figure 2-22. How are price and quantity related in this graph?

Accepted Answer

negatively...

Exam 2: Thinking Like an Economist

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

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Economists at which administrative department help formulate spending plans and regulatory policies?

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It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

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Positive statements are

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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.

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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

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Which of the following is not correct?

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Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. Which of the following could result in a movement from point B to point Z?

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The production possibilities frontier is a graph that shows the various combinations of output that an economy

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Economists make use of assumptions, some of which are unrealistic, for the purpose of

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When an economist evaluates a positive statement, he or she is primarily

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Differences in scientific judgement between economists are similar to all of the following except

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Figure 2-22 -Refer to Figure 2-22. How are price and quantity related in this graph?

Correct Answerverifiednegatively...View AnswerShow Answer

Figure 2-8 -Refer to Figure 2-8. To reach point L, the economy would have to

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In the ordered pair (20, 30) , 20 is the

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Positive statements can be evaluated using data alone, but normative statements cannot.

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A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Correct AnswerverifiedShow Answer

Figure 2-12 -Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Correct AnswerverifiedShow Answer

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

Correct AnswerverifiedShow Answer

If an economy is producing efficiently, then

Correct AnswerverifiedShow Answer

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negatively...
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