Question 1

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-16​ 
-Refer to Figure 2-16. The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Accepted Answer

A)  10 gadgets.
B)  30 widgets
C)  10 gadgets and 30 widgets.
D)  0 gadgets.E) None of the above
F) A) and B)

Question 3

Figure 2-4 
-Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

A)  Q, S
B)  Q, S, T
C)  R, U
D)  TE) B) and C)
F) None of the above

Question 4

Figure 2-19
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service 
-Refer to Figure 2-19. A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars. You warn the policymaker about making a reverse causality mistake with which of the following statements?

Accepted Answer

A)  Higher gas prices are causing more people to choose the commuter rail over driving.
B)  The service frequency was increased in response to an increase in the number of passengers per hour.
C)  There is a positive relationship between frequency of stops and number of passengers.
D)  None of the above is correct.E) B) and D)
F) B) and C)

Question 5

Figure 2-16​ 
-Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce

Accepted Answer

A)  0 gadgets and 100 widgets.
B)  50 gadgets and 70 widgets.
C)  100 gadgets and 0 widgets.
D)  80 gadgets and 90 widgets.E) A) and B)
F) B) and D)

Question 6

With respect to how economists study the economy, which of the following statements is most accurate?

Accepted Answer

A)  Economists study the past, but they do not try to predict the future.
B)  Economists use "rules of thumb" to predict the future.
C)  Economists devise theories, collect data, and analyze the data to test the theories.
D)  Economists use controlled experiments in much the same way that biologists and physicists do.E) All of the above
F) A) and B)

Question 7

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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

Question 10

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 1000 units of food and 47 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 1050 units of food and 47 machines. Which of the following statements is correct?

Accepted Answer

A)  Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 47.
B)  Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry.
C)  In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies.
D)  The technological advance reduced the amount of resources needed to produce 47 machines, so these resources could be used to produce more food.E) B) and D)
F) A) and D)

Question 11

Figure 2-14 
-Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

The two loops in the circular-flow diagram represent

Accepted Answer

A)  the flow of goods and the flow of services.
B)  the flow of dollars and the flow of financial assets.
C)  the flow of inputs into production processes and the flow of outputs from production processes.
D)  the flows of inputs and outputs and the flow of dollars.E) A) and B)
F) A) and C)

Question 14

Figure 2-6 
-Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

Accepted Answer

A)  zero.
B)  50 blankets.
C)  60 pillows.
D)  50 blankets and 60 pillows.E) B) and C)
F) None of the above

Question 15

Figure 2-5 
-Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Accepted Answer

A)  0 dryers and 100 washers.
B)  60 dryers and 50 washers.
C)  80 dryers and 0 washers.
D)  80 dryers and 50 washers.E) None of the above
F) B) and C)

Question 16

President Truman once said he wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Accepted Answer

A)  is rooted in the principle that people face tradeoffs.
B)  indicates that economists recognize that there are opportunity costs associated with policy decisions.
C)  confirms that economists are not suited to be presidential advisers.
D)  More than one of the above is correct.E) B) and D)
F) A) and B)

Question 17

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Accepted Answer

The answer of Who would be more likely to study...

Question 18

In the markets for goods and services in the circular-flow diagram,

Accepted Answer

A)  households provide firms with savings for investment.
B)  households provide firms with labor, land, and capital.
C)  firms provide households with output.
D)  firms provide households with profit.E) B) and D)
F) A) and D)

Question 19

When economists disagree about whether the government should tax a household's income or its consumption, they are expressing a difference in

Accepted Answer

scientific...

Question 20

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.E) A) and C)
F) B) and C)

Exam 2: Thinking Like an Economist

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

Correct Answer
verified

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

Correct Answer
verified

With respect to how economists study the economy, which of the following statements is most accurate?

Correct Answer
verified

The two loops in the circular-flow diagram represent

Correct Answer
verified

When two variables have a positive correlation,

Correct Answer
verified

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

Correct Answer
verified

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Correct Answer
verified

Figure 2-16 -Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce

Correct Answer
verified

Figure 2-14 -Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

When economists disagree about whether the government should tax a household's income or its consumption, they are expressing a difference in

Correct Answer
verified
scientific...
View Answer

President Truman once said he wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Correct Answer
verified

Correct Answer
verified

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Correct Answer
verified

In the markets for goods and services in the circular-flow diagram,

Correct Answer
verified

Economic growth causes a production possibilities frontier to shift outward.

Correct Answer
verified

Figure 2-5 -Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Correct Answer
verified

Figure 2-16 -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct Answer
verified

Exam 2: Thinking Like an Economist

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

Correct AnswerverifiedShow Answer

Figure 2-6 -Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

Correct AnswerverifiedShow Answer

With respect to how economists study the economy, which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

The two loops in the circular-flow diagram represent

Correct AnswerverifiedShow Answer

When two variables have a positive correlation,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Figure 2-16​ -Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce

Correct AnswerverifiedShow Answer

Figure 2-14 -Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it produces 35 dishwashers and no doghouses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When economists disagree about whether the government should tax a household's income or its consumption, they are expressing a difference in

Correct Answerverifiedscientific...View AnswerShow Answer

President Truman once said he wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Congressional Budget Office, which is staffed by economists, provides Congress with independent evaluations of policy proposals.

Correct AnswerverifiedShow Answer

In the markets for goods and services in the circular-flow diagram,

Correct AnswerverifiedShow Answer

Economic growth causes a production possibilities frontier to shift outward.

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

Correct AnswerverifiedShow Answer

Figure 2-16​ -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which point(s) ?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Figure 2-16 -Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
scientific...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Figure 2-16 -Refer to Figure 2-16. The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is approximately

Correct Answer
verified

Correct Answer
verified