Question 1

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

Question 2

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

Accepted Answer

A)   households and firms are both buyers.
B)   households and firms are both sellers.
C)   households are buyers and firms are sellers.
D)   households are sellers and firms are buyers.E) B) and C)
F) All of the above

Question 3

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct about the extent of disagreement among economists?

Accepted Answer

A)   There is a great deal of agreement among economists on virtually every economic issue.
B)   There is a great deal of agreement among economists on many important economic issues.
C)   All disagreements among economists are attributable to differences in their values.
D)   All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.E) B) and C)
F) None of the above

Question 5

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

Accepted Answer

A)   0 bananas and 200 baseballs.
B)   180 bananas and 125 baseballs.
C)   300 bananas and 0 baseballs.
D)   300 bananas and 200 baseballs.E) None of the above
F) B) and C)

Question 6

In the circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 7

The opportunity cost of something is what you give up to get it.

Accepted Answer

A) True 
 B)False

Question 8

Examples of graphs of a single variable include pie charts,bar graphs,and time-series graphs.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not correct?

Accepted Answer

A)   Evaluating statements about how the world should be involves values as well as facts.
B)   Positive statements can,in principle,be confirmed or refuted by examining evidence.
C)   Normative statements can be judged using data alone.
D)   Deciding what is good or bad policy is not just a matter of science.E) A) and B)
F) A) and C)

Question 10

Positive statements are not

Accepted Answer

A)   descriptive.
B)   prescriptive.
C)   claims about how the world is.
D)   made by economists speaking as scientists.E) None of the above
F) A) and B)

Question 11

Economists at the Department of Justice

Accepted Answer

A)   track the behavior of the nation's money supply.
B)   advise Congress on economic matters.
C)   help enforce the nation's antitrust laws.
D)   prepare the federal budget.E) A) and B)
F) A) and C)

Question 12

In the circular-flow diagram,which of the following items represents a payment for a factor of production?

Accepted Answer

A)   interest
B)   capital
C)   spending by households on goods
D)   spending by households on servicesE) None of the above
F) C) and D)

Question 13

Figure 2-4 
-Refer to Figure 2-4.The opportunity cost of obtaining 10 additional toasters by moving from point D to point A is

Accepted Answer

A)   0 toothbrushes.
B)   10 toothbrushes.
C)   50 toothbrushes.
D)   None of the above;the economy cannot move from point D to point A.E) C) and D)
F) A) and B)

Question 14

Positive statements can be evaluated using data alone,but normative statements cannot.

Accepted Answer

A) True 
 B)False

Question 15

The scientific method can be applied to the study of economics.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Accepted Answer

A)   a landowner leases land to a farmer
B)   a farmer hires a teenager to help with harvest
C)   a retired farmer sells his combine to a new farmer
D)   a woman buys corn for dinnerE) A) and B)
F) A) and C)

Question 17

Figure 2-3 
-Refer to Figure 2-3.Inefficient production is represented by which point(s) ?

Accepted Answer

A)   J,L
B)   J,L,M
C)   K,N
D)   ME) A) and B)
F) A) and C)

Question 18

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) A) and D)
F) A) and C)

Question 19

The slope of a line is equal to

Accepted Answer

A)   the change in the value of x divided by the change in the value of y.
B)   the change in the value of y divided by the change in the value of x.
C)   the horizontal distance divided by the vertical distance.
D)   the value of y divided by the value of x.E) All of the above
F) C) and D)

Question 20

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 profitE) A) and D)
F) All of the above

Exam 2: Thinking Like an Economist

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

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Economists at the Department of Justice

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Positive statements are not

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Positive statements can be evaluated using data alone,but normative statements cannot.

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Examples of graphs of a single variable include pie charts,bar graphs,and time-series graphs.

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In the circular-flow diagram,which of the following items represents a payment for a factor of production?

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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?

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In the circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

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Figure 2-4 -Refer to Figure 2-4.The opportunity cost of obtaining 10 additional toasters by moving from point D to point A is

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

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Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

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The scientific method can be applied to the study of economics.

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Which of the following is not correct?

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The slope of a line is equal to

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The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

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Figure 2-3 -Refer to Figure 2-3.Inefficient production is represented by which point(s) ?

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Which of the following is not correct?

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Which of the following statements is correct about the extent of disagreement among economists?

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

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The opportunity cost of something is what you give up to get it.

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