Question 1

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a.On the graph,identify the area of feasible outcomes and the area of infeasible outcomes.
b.On the graph,label a point that is efficient and a point that is inefficient.
c.On the graph,illustrate the effect of the discovery of a new vein of iron ore,a resource needed to make both horseshoes and hammers,on this economy.
d.On a second graph,illustrate the effect of a new computerized assembly line in the production of hammers on this economy.

Accepted Answer

The answer of Draw a production possibilities frontier showing increasing...

Question 2

Figure 2-4
Panel (a) 
 
Panel (b)  
-Refer to Figure 2-4,Panel (a) and Panel (b) .A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Accepted Answer

A)  unemployment.
B)  an improvement in computer production technology.
C)  an improvement in printer production technology.
D)  an improvement in both computer and printer production technology.E) A) and B)
F) C) and D)

Question 3

Figure 2-3 
-Refer to Figure 2-3.This economy has the ability to produce at which point(s) ?

Accepted Answer

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

Question 4

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) A) and B)
F) B) and C)

Question 5

Figure 2-7
In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.
Commuter Rail Passengers by Frequency of Service 
-Refer to Figure 2-16.A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars.You warn the policymaker about making a reverse causality mistake with which of the following statements?

Accepted Answer

A)  Higher gas prices are causing more people to choose the commuter rail over driving.
B)  The service frequency was increased in response to an increase in the number of passengers per hour.
C)  There is a positive relationship between frequency of stops and number of passengers.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 6

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Accepted Answer

A)  the respondents were almost equally divided on the propositions.
B)  the respondents favored the propositions by a slight margin.
C)  the respondents disagreed with the propositions by a slight margin.
D)  there was overwhelming endorsement of the propositions among the respondents.E) C) and D)
F) All of the above

Question 7

Figure 2-5 
-Refer to Figure 2-5.Cups of coffee per day and the hours that someone can go without sleep appear to have

Accepted Answer

A)  a positive correlation.
B)  a negative correlation.
C)  a random correlation.
D)  no correlation.E) A) and C)
F) B) and C)

Question 8

An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Accepted Answer

A) True 
 B)False

Question 9

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) A) and C)
F) A) and B)

Question 10

The use of the coordinate system allows

Accepted Answer

A)  for the display of the flows of dollars,goods and services,and factors of production in an economic system.
B)  for the display of how labor and other resources are organized in the production process.
C)  for the display of two variables on a single graph.
D)  for the creation of pie charts and bar graphs.E) C) and D)
F) A) and B)

Question 11

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

Question 12

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Accepted Answer

A) True 
 B)False

Question 13

In the past,environmentalists thought of economics as a method of maximizing profits.Presently,

Accepted Answer

A)  there is now realization that economics offers a framework for natural resource allocation.
B)  economists are helping to formulate the intellectual framework behind approaches to protecting endangered species,reducing pollution,and preventing climate change.
C)  economics informs environmental studies but economists still do not work for environmental advocacy groups.
D)  More than one of the above is correct.E) A) and B)
F) C) and D)

Question 14

Graphs such as bar graphs and pie charts are limited in that they

Accepted Answer

A)  can only show variables that are positively related.
B)  can only show variables that have a negative correlation.
C)  provide information on only one variable.
D)  provide information on no more than two variables.E) None of the above
F) B) and C)

Question 15

In economics,capital refers to

Accepted Answer

A)  the finances necessary for firms to produce their products.
B)  buildings and machines used in the production process.
C)  the money households use to purchase firms' output.
D)  stocks and bonds.E) B) and D)
F) B) and C)

Question 16

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 17

Figure 2-1 
-Refer to Figure 2-1.Which arrow represents the flow of spending by households?

Accepted Answer

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

Question 18

One difference between a hypothetical benevolent king implementing the best policy and the president implementing the best policy in the real world is the president has to be concerned about

Accepted Answer

A)  any misunderstandings in communicating the policy to the public.
B)  whether the policy will affect his standing among different groups in the electorate.
C)  what amendments will be suggested by members of Congress.
D)  All of the above are correct.E) A) and D)
F) All of the above

Question 19

Figure 2-4
Panel (a) 
 
Panel (b)  
-Refer to Figure 2-4,Panel (a) .Production at point B is

Accepted Answer

A)  impossible and inefficient.
B)  impossible but efficient.
C)  possible but inefficient.
D)  possible and efficient.E) A) and B)
F) All of the above

Question 20

When constructing a production possibilities frontier,which of the following assumptions is not made?

Accepted Answer

A)  The economy produces only two goods or two types of goods.
B)  Firms produce goods using factors of production.
C)  The technology available to firms is given.
D)  The quantities of the factors of production that are available are increasing over the relevant time period.E) B) and C)
F) A) and C)

Exam 2: Thinking Like an Economist

In the past,environmentalists thought of economics as a method of maximizing profits.Presently,

Correct Answer
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The use of the coordinate system allows

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

Correct Answer
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Figure 2-3 -Refer to Figure 2-3.This economy has the ability to produce at which point(s) ?

Correct Answer
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Figure 2-4 Panel (a) Panel (b) -Refer to Figure 2-4,Panel (a) and Panel (b) .A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct Answer
verified

Graphs such as bar graphs and pie charts are limited in that they

Correct Answer
verified

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of spending by households?

Correct Answer
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Figure 2-5 -Refer to Figure 2-5.Cups of coffee per day and the hours that someone can go without sleep appear to have

Correct Answer
verified

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Correct Answer
verified

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Correct Answer
verified

In economics,capital refers to

Correct Answer
verified

One difference between a hypothetical benevolent king implementing the best policy and the president implementing the best policy in the real world is the president has to be concerned about

Correct Answer
verified

When constructing a production possibilities frontier,which of the following assumptions is not made?

Correct Answer
verified

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Correct Answer
verified

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

Correct Answer
verified

An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Correct Answer
verified

Correct Answer
verified

Figure 2-4 Panel (a) Panel (b) -Refer to Figure 2-4,Panel (a) .Production at point B is

Correct Answer
verified

The circular-flow diagram is a

Correct Answer
verified

Exam 2: Thinking Like an Economist

In the past,environmentalists thought of economics as a method of maximizing profits.Presently,

Correct AnswerverifiedShow Answer

The use of the coordinate system allows

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 2-3 -Refer to Figure 2-3.This economy has the ability to produce at which point(s) ?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-4 Panel (a) Panel (b) -Refer to Figure 2-4,Panel (a) and Panel (b) .A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

Correct AnswerverifiedShow Answer

Graphs such as bar graphs and pie charts are limited in that they

Correct AnswerverifiedShow Answer

Figure 2-1 -Refer to Figure 2-1.Which arrow represents the flow of spending by households?

Correct AnswerverifiedShow Answer

Figure 2-5 -Refer to Figure 2-5.Cups of coffee per day and the hours that someone can go without sleep appear to have

Correct AnswerverifiedShow Answer

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Correct AnswerverifiedShow Answer

A survey which sought the opinion of professional economists on fourteen propositions about economic policy found that

Correct AnswerverifiedShow Answer

In economics,capital refers to

Correct AnswerverifiedShow Answer

One difference between a hypothetical benevolent king implementing the best policy and the president implementing the best policy in the real world is the president has to be concerned about

Correct AnswerverifiedShow Answer

When constructing a production possibilities frontier,which of the following assumptions is not made?

Correct AnswerverifiedShow Answer

When economists are trying to explain the world,they are scientists,and when they are trying to help improve the world,they are policy advisers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 2-4 Panel (a) Panel (b) -Refer to Figure 2-4,Panel (a) .Production at point B is

Correct AnswerverifiedShow Answer

The circular-flow diagram is a

Correct AnswerverifiedShow Answer

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