Question 1

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

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Accepted Answer

A) True 
 B)False

Question 4

The first number in any ordered pair is

Accepted Answer

A)   the x-coordinate.
B)   the y-coordinate.
C)   the vertical location of the point.
D)   the slope.E) B) and D)
F) All of the above

Question 5

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

Question 6

When a variable that is named on an axis of a graph changes, the curve shifts.

Accepted Answer

A) True 
 B)False

Question 7

As a substitute for laboratory experiments, economists use evidence available through history's

Accepted Answer

natural ex...

Question 8

Table 2-5 
-Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

Accepted Answer

A)   bowed outward indicating increasing opportunity costs.
B)   bowed outward indicating decreasing opportunity costs.
C)   a straight line indicating constant opportunity costs.
D)   bowed inward indicating increasing opportunity costs.E) All of the above
F) None of the above

Question 9

Another term for factors of production is

Accepted Answer

A)   inputs.
B)   output.
C)   goods.
D)   services.E) A) and B)
F) None of the above

Question 10

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 C)
F) A) and D)

Question 11

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)   labor
B)   land
C)   capital
D)   moneyE) A) and B)
F) A) and C)

Question 12

Figure 2-15 
-Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

Accepted Answer

The answer of Figure 2-15 
-Refer to Figure 2-15. Consider...

Question 13

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

Question 14

Figure 2-6 
-Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

Accepted Answer

A)   120 pillows and 320 blankets.
B)   180 pillows and 180 blankets.
C)   240 pillows and 200 blankets.
D)   We would have to know the details of this economy's technology in order to determine this.E) C) and D)
F) None of the above

Question 15

Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Accepted Answer

A) True 
 B)False

Question 16

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of a capital input?

Accepted Answer

A)   a computer
B)   a share of stock
C)   an hour of a worker's time
D)   $50,000E) All of the above
F) A) and C)

Question 18

Figure 2-3 
-Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

Accepted Answer

A)   revenue
B)   goods and services sold
C)   factors of production
D)   labor, land, and capitalE) None of the above
F) All of the above

Question 19

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Accepted Answer

A) True 
 B)False

Question 20

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

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

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Figure 2-3 -Refer to Figure 2-3. What is flowing from rectangle 1 to oval A?

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Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one car is

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Because almost all economists oppose policies that restrict trade among nations, policymakers do not restrict imports of certain goods.

Correct AnswerverifiedShow Answer

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

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In the circular-flow diagram, which of the following is not a factor of production?

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A pie chart is a way to display information regarding two variables.

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Which of the following is an example of a capital input?

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Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

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Figure 2-6 -Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce

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Another term for factors of production is

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The first number in any ordered pair is

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Factors of production are

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In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

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Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

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

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As a substitute for laboratory experiments, economists use evidence available through history's

Correct Answerverifiednatural ex...View AnswerShow Answer

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

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

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When a variable that is named on an axis of a graph changes, the curve shifts.

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