Question 1

A statement describing how the world should be

Accepted Answer

A)   is a normative statement.
B)   is a positive statement.
C)   would only be made by an economist speaking as a scientist.
D)   would only be made by an economist employed by the government.E) All of the above
F) A) and C)

Question 2

When two variables have a negative correlation and the x-variable decreases,

Accepted Answer

A)   the y-variable increases.
B)   the y-variable decreases.
C)   the y-variable stays the same.
D)   the x-variable can never be positive.E) A) and B)
F) C) and D)

Question 3

The x-coordinate is the

Accepted Answer

A)   first number of an ordered pair and represents the point's horizontal location.
B)   second number of an ordered pair and represents the point's horizontal location.
C)   first number of an ordered pair and represents the point's vertical location.
D)   second number of an ordered pair and represents the point's vertical location.E) A) and C)
F) A) and B)

Question 4

Figure 2-10
Panel (a)  Panel (b)   
-Refer to Figure 2-10, Panel (a) . Production at point Y is

Accepted Answer

A)   impossible and inefficient.
B)   impossible but efficient.
C)   possible but inefficient.
D)   possible and efficient.E) B) and C)
F) A) and D)

Question 5

Which of the following is not held constant when looking at an individual's demand curve?

Accepted Answer

A)   income
B)   price
C)   preferences
D)   the availability of alternative goodsE) None of the above
F) A) and B)

Question 6

Which of the following is not correct?

Accepted Answer

A)   When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words.
B)   Graphs are one way of expressing the relationships among variables.
C)   When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects.
D)   When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns.E) All of the above
F) A) and B)

Question 7

For economists, statements about the world are of two types:

Accepted Answer

A)   assumptions and theories.
B)   true statements and false statements.
C)   specific statements and general statements.
D)   positive statements and normative statements.E) A) and D)
F) None of the above

Question 8

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Accepted Answer

A) True 
 B)False

Question 9

Almost all economists agree that local and state governments should

Accepted Answer

A)   eliminate subsidies to professional sports franchises.
B)   increase subsidies to professional sports franchises.
C)   copy economic policy from Washington, D.C.
D)   prevent companies from outsourcing work.E) B) and C)
F) All of the above

Question 10

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.E) B) and D)
F) A) and D)

Question 11

A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

Accepted Answer

A)   would likely be made by an economist acting as a policy advisor.
B)   would require values and data to be evaluated.
C)   would require data but not values to be evaluated.
D)   could not be evaluated by economists acting as scientists.E) B) and C)
F) All of the above

Question 12

Table 2-6 
-Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

Accepted Answer

The answer of Table 2-6 
-Refer to Table 2-6. Consider...

Question 13

Figure 2-10
Panel (a)  Panel (b)   
-Refer to Figure 2-10, Panel (a)  and Panel (b) . Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a)  to Panel (b) ?

Accepted Answer

A)   The tradeoff between the production of tractors and sofas changes.
B)   Production of 2 tractors and 10 sofas becomes efficient.
C)   Production of 6 tractors and 14 sofas becomes possible.
D)   The opportunity cost of a sofa is higher at all levels of sofa production.E) A) and B)
F) A) and C)

Question 14

In the ordered pair (3, 6) , 3 is the

Accepted Answer

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

Question 15

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 16

In the circular-flow diagram, which of the following items flows from firms to households 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 profitE) All of the above
F) A) and B)

Question 17

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. The opportunity cost of moving from point U to point R is

Accepted Answer

A)   60 bushels of apples.
B)   80 bushels of apples.
C)   80 sweaters.
D)   160 sweaters.E) A) and D)
F) None of the above

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Economists speaking like policy advisers make

Accepted Answer

A)   positive statements.
B)   descriptive statements.
C)   claims about how the world is.
D)   claims about how the world should be.E) All of the above
F) B) and C)

Question 20

A macroeconomist - as opposed to a microeconomist - would study

Accepted Answer

A)   the effects of rent control on housing in New York City.
B)   the effects of foreign competition on the US auto industry.
C)   the effects of borrowing by the federal government.
D)   the effects of raising the gasoline tax on transit ridership.E) B) and C)
F) A) and B)

Exam 2: Thinking Like an Economist

When two variables have a negative correlation and the x-variable decreases,

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Economists speaking like policy advisers make

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

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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. The opportunity cost of moving from point U to point R is

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Almost all economists agree that local and state governments should

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A macroeconomist - as opposed to a microeconomist - would study

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A positive economic statement such as "Pollution taxes decrease the quantity of pollution generated by firms"

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Which of the following is not held constant when looking at an individual's demand curve?

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

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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

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"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

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A statement describing how the world should be

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Which of the following is not correct?

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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) and Panel (b) . Which of the following is not a result of the shift of the economy's production possibilities frontier from Panel (a) to Panel (b) ?

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The x-coordinate is the

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Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of pizzas from 4,000 to 6,000?

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

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In the ordered pair (3, 6) , 3 is the

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For economists, statements about the world are of two types:

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Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production at point Y is

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