Question 1

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

Accepted Answer

The answer of Which type of statement - positive or...

Question 2

Congress relies on economists at the Congressional Budget Office to

Accepted Answer

A)   enforce the nation's antitrust laws.
B)   set the nation's monetary policy.
C)   provide evidence that incumbent members of Congress are performing well in their jobs.
D)   provide independent evaluations of policy proposals.E) None of the above
F) A) and C)

Question 3

Economists usually have to make do with whatever data the world happens to give them.

Accepted Answer

A) True 
 B)False

Question 4

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) B) and D)
F) None of the above

Question 5

Figure 2-9
Panel a)  Panel b) 
  
-Refer to Figure 2-9, 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 D)
F) B) and C)

Question 6

Figure 2-6 
-Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Accepted Answer

A)   This economy has moved from a point of inefficient production to a point of efficient production.
B)   This economy has experienced economic growth.
C)   This economy has experienced an increase in employment.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 7

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 8

Some, but not all, government economists are employed within the administrative branch of government. Which of the following government agencies employs economists outside of the administrative branch?

Accepted Answer

A)   the Department of Labor
B)   the Department of the Treasury
C)   the Congressional Budget Office
D)   the Council of Economic AdvisersE) B) and C)
F) A) and B)

Question 9

Factors of production are

Accepted Answer

A)   used to produce goods and services.
B)   also called output.
C)   abundant in most economies.
D)   assumed to be owned by firms in the circular-flow diagram.E) B) and D)
F) None of the above

Question 10

An economy's production of two goods is efficient if

Accepted Answer

A)   all members of society consume equal portions of the goods.
B)   the goods are produced using only some of society's available resources.
C)   it is impossible to produce more of one good without producing less of the other.
D)   the opportunity cost of producing more of one good is zero.E) B) and C)
F) A) and B)

Question 11

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-21 
-Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Accepted Answer

A)   omitted variable bias.
B)   reverse causality.
C)   slope mismatch.
D)   shifting versus moving along a curve.E) A) and B)
F) None of the above

Question 13

For economists, historical episodes

Accepted Answer

A)   are not worthy of study because they offer few insights into current economic events and problems.
B)   are not worthy of study because laboratory experiments provide more reliable data.
C)   are worthy of study because economists rely entirely on observation, rather than on theory.
D)   are worthy of study because they serve as valuable substitutes for laboratory experiments.E) A) and B)
F) A) and C)

Question 14

When two variables have a negative correlation,

Accepted Answer

A)   they tend to move in opposite directions.
B)   they tend to move in the same direction.
C)   one variable will move while the other remains constant.
D)   the variables' values are never positive.E) C) and D)
F) B) and C)

Question 15

Table 2-5
 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

Accepted Answer

A)   1600 bushels of corn and 300 bushels of wheat
B)   1400 bushels of corn and 800 bushels of wheat
C)   1000 bushels of corn and 2000 bushels of wheat
D)   600 bushels of corn and 1800 bushels of wheatE) None of the above
F) A) and C)

Question 16

Figure 2-2 
-Refer to Figure 2-2. Boxes C and D of this circular-flow diagram represent

Accepted Answer

A)   households and government.
B)   firms and government.
C)   the markets for goods and services and the markets for financial assets.
D)   the markets for goods and services and the markets for factors of production.E) All of the above
F) B) and C)

Question 17

An ordered pair is

Accepted Answer

A)   the process of checking calculations twice before placing them on a graph.
B)   two numbers that can be represented by a single point on a graph.
C)   two numbers that are represented by two points on a graph.
D)   two points on a graph that are of equal distance from the origin.E) B) and D)
F) B) and C)

Question 18

Which types of models are built with assumptions?

Accepted Answer

A)   economic models, but not models in other disciplines such as physics and biology
B)   economic models as well as models in other disciplines such as physics and biology
C)   models that are built for teaching purposes but not for research purposes
D)   bad modelsE) A) and B)
F) All of the above

Question 19

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

Question 20

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Accepted Answer

A)   Dylan receives a salary for his work as a financial analyst for an investment firm.
B)   Kristin buys two business suits to wear to her job as a Chief Information Officer.
C)   Jim receives clean water in his home in exchange for paying his water bill.
D)   Caroline owns a nail salon and receives payments from her clients for her services.E) A) and B)
F) A) and C)

Exam 2: Thinking Like an Economist

Figure 2-21 -Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Correct AnswerverifiedShow Answer

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

Correct AnswerverifiedShow Answer

When two variables have a negative correlation,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. Boxes C and D of this circular-flow diagram represent

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An ordered pair is

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Congress relies on economists at the Congressional Budget Office to

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An economy's production of two goods is efficient if

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Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

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Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . Production at point K is

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Factors of production are

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Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

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Economists try to address their subject with a scientist's objectivity.

Correct AnswerverifiedShow Answer

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

For economists, historical episodes

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Which types of models are built with assumptions?

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Figure 2-6 -Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct?

Correct AnswerverifiedShow Answer

Economists usually have to make do with whatever data the world happens to give them.

Correct AnswerverifiedShow Answer

Some, but not all, government economists are employed within the administrative branch of government. Which of the following government agencies employs economists outside of the administrative branch?

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