Question 1

Duties of the Council of Economic Advisers include

Accepted Answer

A)  advising the president and writing the annual Economic Report of the President.
B)  implementing the president's tax policies.
C)  managing of the nation's money supply.
D)  managing the Social Security program.

Question 2

According to the circular-flow diagram, if Christian is a worker who delivers flowers for Happy Day Flower Company, he 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.

Question 3

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 4

What you must give up to get something else is called the

Accepted Answer

The answer of What you must give up to get...

Question 5

Economic growth causes a production possibilities frontier to shift outward.

Accepted Answer

A) True 
 B)False

Question 6

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

Accepted Answer

A)  the nation is producing beyond its capacity, so inflation will occur.
B)  the nation is not using all available resources or is using inferior technology or both.
C)  the nation is producing an efficient combination of goods.
D)  there will be a large opportunity cost if the nation tries to increase production of any good.

Question 7

Points inside the production possibilities frontier represent feasible levels of production.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the price level is measured along the vertical axis on a graph. When the price level changes, there will be a

Accepted Answer

A)  rotation of the curve.
B)  shift of the curve.
C)  movement along the curve.
D)  change in the slope of the curve.

Question 9

Figure 2-2
 
-Refer to Figure 2-2. If Boxes A and B represent households and firms, then Boxes C and D of this circular-flow diagram represent

Accepted Answer

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

Question 10

Figure 2-11
  ​
-With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 11

Economic models can help us understand reality only when they include all details of the economy.

Accepted Answer

A) True 
 B)False

Question 12

Figure 2-3
 
-Refer to Figure 2-3. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

Accepted Answer

A)  The economy has insufficient resources to produce at a more desirable point.
B)  The economy's available technology prevents it from producing at a more desirable point.
C)  There is widespread unemployment in the economy.
D)  The economy is experiencing economic growth.

Question 13

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 14

Economists sometimes give conflicting advice because

Accepted Answer

A)  graduate students in economics are encouraged to argue with each other.
B)  economists have different values and scientific judgments.
C)  economists acting as scientists do not like to agree with economists acting as policy advisers.
D)  economics is more of a belief system than a science.

Question 15

Figure 2-14
​
  ​
-Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

Accepted Answer

The answer of Figure 2-14
​
  ​
-Refer to Figure 2-14....

Question 16

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Accepted Answer

The answer of Like biologists and physicists, economists use the...

Question 17

The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

Accepted Answer

A) True 
 B)False

Question 18

Unemployment causes production levels to be inefficient.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-3
 
-Refer to Figure 2-3. If this economy devotes all of its resources to the production of forks, then it will produce

Accepted Answer

A)  80 knives and 0 forks.
B)  40 knives and 50 forks.
C)  0 knives and 100 forks.
D)  50 knives and 80 forks.

Question 20

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

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Figure 2-3 -Refer to Figure 2-3. If this economy devotes all of its resources to the production of forks, then it will produce

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Figure 2-11 ​ -With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

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

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There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different values about what policy should try to accomplish.

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Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

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Duties of the Council of Economic Advisers include

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The Council of Economic Advisers consists of thirty members and a staff of several dozen economists.

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Economic models can help us understand reality only when they include all details of the economy.

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Points inside the production possibilities frontier represent feasible levels of production.

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Figure 2-3 -Refer to Figure 2-3. Suppose this economy is producing at point D. Which of the following statements would best explain this situation?

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Unemployment causes production levels to be inefficient.

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Figure 2-14 ​ ​ -Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

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Figure 2-2 -Refer to Figure 2-2. If Boxes A and B represent households and firms, then Boxes C and D of this circular-flow diagram represent

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Economists sometimes give conflicting advice because

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Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

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Economic growth causes a production possibilities frontier to shift outward.

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Economists try to address their subject with a scientist's objectivity.

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Suppose the price level is measured along the vertical axis on a graph. When the price level changes, there will be a

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What you must give up to get something else is called the

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Figure 2-11 -With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

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Figure 2-14 -Refer to Figure 2-14. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

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