Question 1

Economic models are most often composed of diagrams and equations.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2-4 
-Refer to Figure 2-4. Inefficient production is represented by which points) ?

Accepted Answer

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

Question 3

The circular-flow diagram is a

Accepted Answer

A)   visual model of the economy.
B)   visual model of the relationships among money, prices, and businesses.
C)   model that shows the effects of government on the economy.
D)   mathematical model of how the economy works.E) None of the above
F) All of the above

Question 4

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Accepted Answer

A)   should produce.
B)   wants to produce.
C)   can produce.
D)   demands.E) None of the above
F) A) and B)

Question 5

The x-coordinate of an ordered pair specifies the

Accepted Answer

A)   diagonal location of the point.
B)   vertical location of the point.
C)   horizontal location of the point.
D)   quadrant location in which the point is located.E) A) and B)
F) A) and C)

Question 6

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Accepted Answer

A)   households
B)   firms
C)   government
D)   markets for factors of productionE) A) and B)
F) A) and C)

Question 7

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not correct?

Accepted Answer

A)   The slope of a line will be a small positive number for a fairly flat upward-sloping line.
B)   The slope of a line will be a large positive number for a steep upward-sloping line.
C)   The slope of a line will be a negative number for a downward-sloping line.
D)   The slope of a line will be infinite for a horizontal line.E) B) and C)
F) B) and D)

Question 9

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

Accepted Answer

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

Question 10

Figure 2-20
Relationship Between Years of Education and Annual Income 
-Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

Accepted Answer

A)   positive
B)   negative
C)   inverse
D)   normativeE) A) and D)
F) C) and D)

Question 11

Which of the following statements are positive and which are normative?
a. The minimum wage creates unemployment among young and unskilled workers.
b. The minimum wage ought to be abolished.
c. If the price of a product in a market decreases, then, other things equal, quantity demanded will increase.
d. A little bit of inflation is worse for society than a little bit of unemployment.
e. There is a tradeoff between inflation and unemployment in the short run.
f. If consumer income increases, then, other things equal, the demand for automobiles will increase.
g. The U.S. income distribution is not fair.
h. U.S. workers deserve more liberal unemployment benefits.
i. If interest rates increase, then investment will decrease.
j. If welfare benefits were reduced, then the country would be better off.

Accepted Answer

a, c, e, f, and i ar...

Question 12

Economic models

Accepted Answer

A)   are not useful because they omit many real-world details.
B)   are usually composed of diagrams and equations.
C)   are useful because they do not omit any real-world details.
D)   are usually plastic representations of the economy.E) B) and D)
F) C) and D)

Question 13

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

Accepted Answer

A)   zero.
B)   40 blankets.
C)   120 pillows.
D)   360 blankets.E) B) and D)
F) C) and D)

Question 14

The circular-flow diagram

Accepted Answer

A)   is an economic model.
B)   incorporates two types of decision makers: households and firms.
C)   represents the flows of inputs, outputs, and dollars.
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 15

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) C) and D)

Question 16

Two variables that have a positive correlation move in the same direction.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-3 
-Refer to Figure 2-3. Which shape refers to the markets for goods and services?

Accepted Answer

A)   oval A
B)   oval B
C)   rectangle 1
D)   rectangle 2E) None of the above
F) B) and C)

Question 18

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Accepted Answer

A)   the $50 represents a cost of production for Denny's firm.
B)   the $50 represents wages, rent, and profit to Denny's firm.
C)   Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton.
D)   Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.E) B) and C)
F) A) and B)

Question 19

Which of the following is correct?

Accepted Answer

A)   A horizontal line has an infinite slope, and a vertical line has a zero slope.
B)   A horizontal line has a slope of 1, and a vertical line has a slope of -1.
C)   A horizontal line has a zero slope, and a vertical line has an infinite slope.
D)   A horizontal line has a slope of -1, and a vertical line has a slope of 1.E) B) and C)
F) None of the above

Question 20

An assumption an economist might make while studying international trade is

Accepted Answer

A)   there are only two countries.
B)   countries only produce two goods.
C)   technology does not change.
D)   All of the above are possible assumptions.E) None of the above
F) B) and C)

Exam 2: Thinking Like an Economist

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

Correct Answer
verified

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

Correct Answer
verified

Two variables that have a positive correlation move in the same direction.

Correct Answer
verified

An assumption an economist might make while studying international trade is

Correct Answer
verified

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

Correct Answer
verified

Figure 2-3 -Refer to Figure 2-3. Which shape refers to the markets for goods and services?

Correct Answer
verified

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Correct Answer
verified

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Correct Answer
verified

Figure 2-4 -Refer to Figure 2-4. Inefficient production is represented by which points) ?

Correct Answer
verified

Figure 2-20 Relationship Between Years of Education and Annual Income -Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

Correct Answer
verified

The circular-flow diagram

Correct Answer
verified

The x-coordinate of an ordered pair specifies the

Correct Answer
verified

Economic models

Correct Answer
verified

Correct Answer
verified
a, c, e, f, and i ar...
View Answer

Economic models are most often composed of diagrams and equations.

Correct Answer
verified

The circular-flow diagram is a

Correct Answer
verified

Exam 2: Thinking Like an Economist

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

Correct AnswerverifiedShow Answer

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

Correct AnswerverifiedShow Answer

Two variables that have a positive correlation move in the same direction.

Correct AnswerverifiedShow Answer

An assumption an economist might make while studying international trade is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3. Which shape refers to the markets for goods and services?

Correct AnswerverifiedShow Answer

The production possibilities frontier is a graph that shows the various combinations of output that an economy

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Correct AnswerverifiedShow Answer

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Correct AnswerverifiedShow Answer

Figure 2-4 -Refer to Figure 2-4. Inefficient production is represented by which points) ?

Correct AnswerverifiedShow Answer

Figure 2-20 Relationship Between Years of Education and Annual Income -Refer to Figure 2-20. According to the graph, the correlation between years of education and annual income is

Correct AnswerverifiedShow Answer

The circular-flow diagram

Correct AnswerverifiedShow Answer

The x-coordinate of an ordered pair specifies the

Correct AnswerverifiedShow Answer

Economic models

Correct AnswerverifiedShow Answer

Correct Answerverifieda, c, e, f, and i ar...View AnswerShow Answer

Economic models are most often composed of diagrams and equations.

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

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a, c, e, f, and i ar...
View Answer

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