Question 1

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 is producing at point T,

Accepted Answer

A)   there is unemployment.
B)   production is efficient.
C)   growth can only be achieved through an advancement in technology.
D)   the opportunity cost of producing one more sweater is approximately 40 bushels of apples.E) B) and D)
F) A) and B)

Question 2

Figure 2-17 
-Refer to Figure 2-17. The movement from point A to point B is a(n)

Accepted Answer

A)   shift of the demand curve.
B)   indication of a change in preferences for grapes.
C)   movement along the demand curve.
D)   indication of an increase in income.E) B) and C)
F) A) and C)

Question 3

The nation's antitrust laws are enforced by economists at the Department of

Accepted Answer

A)   Labor.
B)   Health and Human Services.
C)   Justice.
D)   Treasury.E) All of the above
F) B) and C)

Question 4

Which of the following is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)   When the minimum wage is increased, unemployment is a predictable consequence.
B)   The income tax rate should be increased to offset the budget deficit.
C)   Increasing government spending is the best way to help the economy move out of a recession.
D)   More than one of the above are positive statements.E) A) and B)
F) All of the above

Question 5

For economists, substitutes for laboratory experiments often come in the form of

Accepted Answer

A)   natural experiments offered by history.
B)   untested theories.
C)   "rules of thumb" and other such conveniences.
D)   reliance upon the wisdom of elders in the economics profession.E) B) and C)
F) None of the above

Question 6

Figure 2-1 
-Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Accepted Answer

A)   A only
B)   A and B
C)   C only
D)   C and DE) B) and C)
F) None of the above

Question 7

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 8

According to the circular flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Accepted Answer

A)   in the markets for factors of production exchanging labor for income.
B)   in the markets for factors of production exchanging flowers for revenue.
C)   in the markets for goods and services exchanging flowers for wages, rent, and profit.
D)   in the markets for goods and services exchanging labor for income.E) A) and D)
F) B) and D)

Question 9

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) None of the above

Question 10

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

Question 11

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

Question 12

A circular-flow diagram is a model that

Accepted Answer

A)   helps to explain how participants in the economy interact with one another.
B)   helps to explain how the economy is organized.
C)   incorporates all aspects of the real economy.
D)   Both (a)  and (b)  are correct.E) A) and B)
F) A) and C)

Question 13

Economists at which administrative department help design tax policy?

Accepted Answer

Department...

Question 14

The production possibilities frontier illustrates

Accepted Answer

A)   the trade-off between efficiency and equality.
B)   the combination of output that an economy should produce.
C)   the combination of output that each member of society should consume.
D)   None of the above is correct.E) A) and B)
F) A) and D)

Question 15

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 sofa is

Accepted Answer

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

Question 16

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Accepted Answer

A)   have no questions but hundreds of answers.
B)   have 100 questions and 3,000 answers.
C)   have 1,000 questions but no answers.
D)   never produce a winner.E) A) and B)
F) None of the above

Question 17

Figure 2-5 
-Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Accepted Answer

A)   20 dryers.
B)   20 washers.
C)   20 dryers and 20 washers.
D)   60 dryers.E) C) and D)
F) All of the above

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Joe and Fred are economists. Joe thinks that the wealthiest 10% of the US population should be taxed a rate higher than the rest of society because they can better afford it. Fred thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success. In this example, Joe and Fred

Accepted Answer

A)   disagree about the validity of a positive theory.
B)   have different normative views about tax policy.
C)   must both be incorrect because tax policy is never that simple.
D)   None of the above is correct.E) C) and D)
F) A) and C)

Question 20

Figure 2-22 
-Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Accepted Answer

movement a...

Exam 2: Thinking Like an Economist

According to the circular flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Correct Answer
verified

Which of the following is an example of a positive, as opposed to normative, statement?

Correct Answer
verified

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Correct Answer
verified

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

Correct Answer
verified

Economists at which administrative department help design tax policy?

Correct Answer
verified
Department...
View Answer

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 is producing at point T,

Correct Answer
verified

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Correct Answer
verified

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Correct Answer
verified
movement a...
View Answer

Correct Answer
verified

For economists, substitutes for laboratory experiments often come in the form of

Correct Answer
verified

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

Correct Answer
verified

Figure 2-1 -Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Correct Answer
verified

The production possibilities frontier illustrates

Correct Answer
verified

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Correct Answer
verified

Figure 2-17 -Refer to Figure 2-17. The movement from point A to point B is a(n)

Correct Answer
verified

The nation's antitrust laws are enforced by economists at the Department of

Correct Answer
verified

A circular-flow diagram is a model that

Correct Answer
verified

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

Correct Answer
verified

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 sofa is

Correct Answer
verified

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

Correct Answer
verified

Exam 2: Thinking Like an Economist

According to the circular flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Correct AnswerverifiedShow Answer

Which of the following is an example of a positive, as opposed to normative, statement?

Correct AnswerverifiedShow Answer

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists at which administrative department help design tax policy?

Correct AnswerverifiedDepartment...View AnswerShow Answer

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 is producing at point T,

Correct AnswerverifiedShow Answer

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Correct AnswerverifiedShow Answer

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point B considered a shift of the curve or a movement along the curve?

Correct Answerverifiedmovement a...View AnswerShow Answer

Correct AnswerverifiedShow Answer

For economists, substitutes for laboratory experiments often come in the form of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-1 -Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

Correct AnswerverifiedShow Answer

The production possibilities frontier illustrates

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Correct AnswerverifiedShow Answer

Figure 2-17 -Refer to Figure 2-17. The movement from point A to point B is a(n)

Correct AnswerverifiedShow Answer

The nation's antitrust laws are enforced by economists at the Department of

Correct AnswerverifiedShow Answer

A circular-flow diagram is a model that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 sofa is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Department...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
movement a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified