Question 1

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Accepted Answer

The answer of Is the following a positive or normative...

Question 2

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Accepted Answer

The answer of Suppose a war in the Middle East...

Question 3

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.

Question 4

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Accepted Answer

The answer of When economists are trying to explain the...

Question 5

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 6

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.

Question 7

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.

Question 8

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Accepted Answer

A) True 
 B)False

Question 9

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Accepted Answer

A)   amount of the other good that must be given up.
B)   market price of the additional amount produced.
C)   amount of resources that must be devoted to its production.
D)   number of dollars that must be spent to produce it.

Question 10

Figure 2-2 
-Refer to Figure 2-2. Boxes A and B of this circular-flow diagram represent

Accepted Answer

A)   firms and households.
B)   households and government.
C)   the markets for goods and services and the markets for financial assets.
D)   the markets for goods and the markets for services.

Question 11

Just like other scientific models, economic models simplify reality using

Accepted Answer

The answer of Just like other scientific models, economic models...

Question 12

Assumptions can simplify the complex world and make it easier to understand.

Accepted Answer

A) True 
 B)False

Question 13

Figure 2-8 
-Refer to Figure 2-8. Point K represents an outcome in which

Accepted Answer

A)   production is inefficient.
B)   some of the economy's resources are unemployed.
C)   the economy is using all of its resources to produce hammers.
D)   the economy is using all of its nails to produce hammers.

Question 14

Figure 2-9
Panel a)  Panel b) 
  
-Refer to Figure 2-9, Panel a) . The movement from point M to point K could be caused by

Accepted Answer

A)   an advance in production technology.
B)   an improvement in efficiency.
C)   economic growth.
D)   unemployment.

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. Which combination of points show production possibilities only achievable with improvements in technology or increases in resources?

Accepted Answer

A)   Q, R, U, and V
B)   S and X
C)   T and W
D)   None of the above is correct.

Question 16

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profit

Question 17

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

Accepted Answer

A)   The US Department of Justice should allow a merger between AT&T and T-Mobile because it would have little effect on consumers.
B)   Antitrust laws should be used to prevent further concentration in the wireless telephone service market.
C)   The US Department of Justice sued AT&T to block its merger with T-Mobile.
D)   The wireless telephone service market is too highly concentrated.

Question 18

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.

Question 19

The Federal Reserve

Accepted Answer

A)   designs tax policy.
B)   enforces the nation's antitrust laws.
C)   sets the nation's monetary policy.
D)   analyzes data on workers.

Question 20

The President counts among his economic advisors the Congressional Budget Office.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

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

Correct Answer
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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?

Correct Answer
verified

The Federal Reserve

Correct Answer
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In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct Answer
verified

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Correct Answer
verified

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

Correct Answer
verified

The President counts among his economic advisors the Congressional Budget Office.

Correct Answer
verified

Correct Answer
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Figure 2-2 -Refer to Figure 2-2. Boxes A and B of this circular-flow diagram represent

Correct Answer
verified

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct Answer
verified

Assumptions can simplify the complex world and make it easier to understand.

Correct Answer
verified

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The movement from point M to point K could be caused by

Correct Answer
verified

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

Correct Answer
verified

Figure 2-8 -Refer to Figure 2-8. Point K represents an outcome in which

Correct Answer
verified

If an economy is producing efficiently, then

Correct Answer
verified

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Correct Answer
verified

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Correct Answer
verified

Just like other scientific models, economic models simplify reality using

Correct Answer
verified

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Correct Answer
verified

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

Correct Answer
verified

Exam 2: Thinking Like an Economist

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The Federal Reserve

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct AnswerverifiedShow Answer

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The President counts among his economic advisors the Congressional Budget Office.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-2 -Refer to Figure 2-2. Boxes A and B of this circular-flow diagram represent

Correct AnswerverifiedShow Answer

Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a

Correct AnswerverifiedShow Answer

Assumptions can simplify the complex world and make it easier to understand.

Correct AnswerverifiedShow Answer

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a) . The movement from point M to point K could be caused by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-8 -Refer to Figure 2-8. Point K represents an outcome in which

Correct AnswerverifiedShow Answer

If an economy is producing efficiently, then

Correct AnswerverifiedShow Answer

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

Correct AnswerverifiedShow Answer

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the

Correct AnswerverifiedShow Answer

Just like other scientific models, economic models simplify reality using

Correct AnswerverifiedShow Answer

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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