Question 1

According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

Accepted Answer

A) True 
 B)False

Question 2

Economic models are most often composed of diagrams and equations.

Accepted Answer

A) True 
 B)False

Question 3

Figure 2-22 
-Refer to Figure 2-22. What is the x-coordinate of point R?

Accepted Answer

The answer of Figure 2-22 
-Refer to Figure 2-22. What...

Question 4

When studying the effects of changes in public policy, economists believe that

Accepted Answer

A)   it is important to distinguish between the short run and the long run.
B)   the assumptions used in studying those effects should be the same for the short run as for the long run.
C)   the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)   the long-run effects of those changes are always more beneficial to society than are the short-run effects.E) A) and B)
F) A) and C)

Question 5

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

Question 6

Economists view normative statements as

Accepted Answer

A)   prescriptive, making a claim about how the world ought to be.
B)   descriptive, making a claim about how the world is.
C)   statements about the normal condition of the world.
D)   pessimistic, putting the worst possible interpretation on things.E) A) and D)
F) All of the above

Question 7

Figure 2-23 
-Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

Accepted Answer

A) True 
 B)False

Question 8

A production possibilities frontier can shift outward if

Accepted Answer

A)   government increases the amount of money in the economy.
B)   there is a technological improvement.
C)   resources are shifted from the production of one good to the production of the other good.
D)   the economy abandons inefficient production methods in favor of efficient production methods.E) All of the above
F) A) and C)

Question 9

The Council of Economic Advisers

Accepted Answer

A)   was created in 1776 and consists of three members and a staff of several dozen economists.
B)   was created in 1776 and consists of thirty members and a staff of a dozen economists.
C)   was created in 1946 and consists of three members and a staff of several dozen economists.
D)   was created in 1946 and consists of thirty members and a staff of a dozen economists.E) B) and D)
F) None of the above

Question 10

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Accepted Answer

A) True 
 B)False

Question 11

When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

Accepted Answer

A)   is asked to explain the cause of an economic event.
B)   is asked to recommend a policy to improve economic outcomes.
C)   is asked as a policy adviser.
D)   does not have enough information to respond.E) None of the above
F) All of the above

Question 12

Economists view positive statements as

Accepted Answer

A)   affirmative, justifying existing economic policy.
B)   optimistic, putting the best possible interpretation on things.
C)   descriptive, making a claim about how the world is.
D)   prescriptive, making a claim about how the world ought to be.E) None of the above
F) All of the above

Question 13

An economic outcome is said to be efficient if the economy is

Accepted Answer

A)   using all of the scarce resources it has available.
B)   conserving on resources, rather than using all available resources.
C)   getting all it can get from the scarce resources it has available.
D)   able to produce more than what is currently being produced without additional resources.E) None of the above
F) B) and C)

Question 14

Table 2-3
Production Possibilities for Footville
 
-Refer to Table 2-3. Which of the following statements is correct?

Accepted Answer

A)   The opportunity cost of an additional 200 shoes is constant at 200 socks.
B)   The opportunity cost of an additional 200 shoes is constant at 300 socks.
C)   Footville's production possibilities frontier is a straight, downward­sloping line.
D)   The opportunity cost of an additional 200 shoes increases as more socks are produced.E) None of the above
F) A) and B)

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. If this society moves from point U to point V,

Accepted Answer

A)   it gives up 40 bushels of apples to get 80 sweaters.
B)   it gives up 140 bushels of apples to get 80 sweaters.
C)   it gives up 80 sweaters to get 140 bushels of apples.
D)   it gives up 80 sweaters to get 40 bushels of apples.E) All of the above
F) B) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

In the markets for goods and services in the circular flow diagram, households act as

Accepted Answer

The answer of In the markets for goods and services...

Question 18

When an economy is operating inside its production possibilities frontier, we know that

Accepted Answer

A)   there are unused resources or inefficiencies in the economy.
B)   all of the economy's resources are fully employed.
C)   economic growth would have to occur in order for the economy to move to a point on the frontier.
D)   in order to produce more of one good, the economy would have to give up some of the other good.E) B) and D)
F) All of the above

Question 19

Economists speaking like policy advisers make

Accepted Answer

A)   claims about how the world is.
B)   descriptive statements.
C)   normative statements.
D)   More than one of the above is correct.E) C) and D)
F) B) and D)

Question 20

Figure 2-5 
-Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

Accepted Answer

A)   it is not using all of its resources.
B)   it is not using the most efficient production process.
C)   it does not have the resources and technology to produce that level of output.
D)   All of the above are correct.E) C) and D)
F) B) and C)

Exam 2: Thinking Like an Economist

Figure 2-23 -Refer to Figure 2-23. Given the technology available for manufacturing doghouses and dishwashers, this economy does not have enough of the factors of production to support the level of output represented by point C.

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When an economy is operating inside its production possibilities frontier, we know that

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An economic outcome is said to be efficient if the economy is

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According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

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Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

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Economic models are most often composed of diagrams and equations.

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When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist

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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. If this society moves from point U to point V,

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When studying the effects of changes in public policy, economists believe that

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

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Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. Which of the following statements is correct?

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Economists speaking like policy advisers make

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Figure 2-5 -Refer to Figure 2-5. This economy cannot currently produce 70 washers and 70 dryers because

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In the markets for goods and services in the circular flow diagram, households act as

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Which of the following statements is (are) correct?

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Economists view positive statements as

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Figure 2-22 -Refer to Figure 2-22. What is the x-coordinate of point R?

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A production possibilities frontier can shift outward if

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The Council of Economic Advisers

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Economists view normative statements as

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