Question 1

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Accepted Answer

A)   opinions and education.
B)   opinions and values.
C)   scientific judgments and education.
D)   scientific judgments and values.E) B) and C)
F) C) and D)

Question 4

Use the following Figure to answer the question Figure: 2-2 
-Refer to Figure 2-2. Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular­flow diagram, then Juan's income is represented by a flow of dollars

Accepted Answer

A)   from Box A to Box C.
B)   from Box C to Box A.
C)   from Box B to Box D.
D)   from Box D to Box B.E) A) and C)
F) A) and B)

Question 5

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Accepted Answer

A) True 
 B)False

Question 6

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Accepted Answer

A)   Dylan receives a salary for his work as a financial analyst for an investment firm.
B)   Kristin buys two business suits to wear to her job as a Chief Information Officer.
C)   Jim receives clean water in his home in exchange for paying his water bill.
D)   Caroline owns a nail salon and receives payments from her clients for her services.E) B) and C)
F) A) and B)

Question 8

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Accepted Answer

A)   the impact of minimum-wage laws on employment in the fast food industry
B)   the effect of changes in household saving rates on the growth rate of national income
C)   the impact of faster money growth on the rate of inflation
D)   a comparison of alternative tax policies and their respective impacts on the rate of the nation's economic growthE) B) and C)
F) A) and D)

Question 9

The circular-flow diagram is an example of

Accepted Answer

A)   a laboratory experiment.
B)   an economic model.
C)   a mathematical model.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 10

Use the following Figure to answer the question : Figure 2-4 : 
-Refer to Figure 2-4. Unemployment could cause this economy to produce at which points) ?

Accepted Answer

A)   Q, S
B)   Q, S, T
C)   R, U
D)   TE) B) and C)
F) A) and B)

Question 11

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 12

The scientific method is

Accepted Answer

A)   the use of modern technology to understand the way the world works.
B)   the use of controlled laboratory experiments to understand the way the world works.
C)   the dispassionate development and testing of theories about how the world works.
D)   the search for evidence to support preconceived theories about how the world works.E) B) and C)
F) A) and D)

Question 13

Use the following Figure to answer the question Figure: 2-1 
-Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) B) and C)
F) A) and D)

Question 14

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 15

Joe and Fred are economists. Joe thinks that the wealthiest 10% of the US population should be taxed a rate higher than the rest of society because they can better afford it. Fred thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success. In this example, Joe and Fred

Accepted Answer

A)   disagree about the validity of a positive theory.
B)   have different normative views about tax policy.
C)   must both be incorrect because tax policy is never that simple.
D)   None of the above is correct.E) C) and D)
F) A) and B)

Question 16

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Accepted Answer

A)   One economist believes everyone should pay the same percentage of their income in taxes; another economist believes that wealthier citizens should pay a higher percentage of their income in taxes.
B)   One economist believes that manufacturing firms should face greater regulation to preserve the environment; another economist believes the government should not intervene in free markets.
C)   One economist believes that equality should be valued over efficiency in policy decisions; another economist believes that efficiency should be valued over equality in policy decisions.
D)   One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption.E) B) and C)
F) A) and C)

Question 17

Use the following Figure to answer the question : Figure 2-13 
-Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Accepted Answer

A)   Point G is currently unattainable.
B)   Point G is efficient.
C)   At point G, more cakes are produced than cookies.
D)   There is unemployment at point G.E) C) and D)
F) A) and B)

Question 18

In the circular-flow diagram,

Accepted Answer

A)   factors of production flow from government to firms.
B)   goods and services flow from households to firms.
C)   income paid to the factors of production flows from firms to households.
D)   spending on goods and services flows from firms to households.E) C) and D)
F) A) and B)

Question 19

Use the following Table to answer the question : Table 2-4 : Production Possibilities for Picnicland

-Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Accepted Answer

A)   150 hotdogs
B)   225 hotdogs
C)   300 hotdogs
D)   450 hotdogsE) A) and D)
F) All of the above

Question 20

Economists at which administrative department help enforce the nation's antitrust laws?

Accepted Answer

Department...

Exam 2: Thinking Like an Economist

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct Answer
verified

Use the following Table to answer the question : Table 2-4 : Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Correct Answer
verified

Correct Answer
verified

In the circular-flow diagram,

Correct Answer
verified

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Correct Answer
verified

Economists at which administrative department help enforce the nation's antitrust laws?

Correct Answer
verified
Department...
View Answer

The scientific method is

Correct Answer
verified

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct Answer
verified

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Correct Answer
verified

Correct Answer
verified

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Correct Answer
verified

Use the following Figure to answer the question : Figure 2-13 -Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Correct Answer
verified

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Correct Answer
verified

Use the following Figure to answer the question : Figure 2-4 : -Refer to Figure 2-4. Unemployment could cause this economy to produce at which points) ?

Correct Answer
verified

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

Correct Answer
verified

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Correct Answer
verified

The circular-flow diagram is an example of

Correct Answer
verified

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct Answer
verified

Exam 2: Thinking Like an Economist

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

Use the following Table to answer the question : Table 2-4 : Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the circular-flow diagram,

Correct AnswerverifiedShow Answer

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Correct AnswerverifiedShow Answer

Economists at which administrative department help enforce the nation's antitrust laws?

Correct AnswerverifiedDepartment...View AnswerShow Answer

The scientific method is

Correct AnswerverifiedShow Answer

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

Correct AnswerverifiedShow Answer

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question Figure: 2-1 -Refer to Figure 2-1. Which arrow represents the flow of land, labor, and capital?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward.

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-13 -Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Correct AnswerverifiedShow Answer

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : Figure 2-4 : -Refer to Figure 2-4. Unemployment could cause this economy to produce at which points) ?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Correct AnswerverifiedShow Answer

The circular-flow diagram is an example of

Correct AnswerverifiedShow Answer

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Department...
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
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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
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Correct Answer
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Correct Answer
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Correct Answer
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