Question 1

Evaluating normative statements involves values as well as facts.

Accepted Answer

A) True 
 B)False

Question 2

Normative statements are

Accepted Answer

A)   prescriptive,whereas positive statements are descriptive.
B)   descriptive,whereas positive statements are prescriptive.
C)   backward-looking,whereas positive statements are forward-looking.
D)   forward-looking,whereas positive statements are backward-looking.E) None of the above
F) A) and C)

Question 3

When two variables have a negative correlation,

Accepted Answer

A)   when the x-variable decreases,the y-variable decreases.
B)   when the x-variable decreases,the y-variable increases.
C)   when the x-variable increases,the y-variable increases.
D)   More than one of the above is correct.E) All of the above
F) A) and D)

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) All of the above

Question 5

Which of the following concepts cannot be illustrated by the production possibilities frontier?

Accepted Answer

A)   efficiency
B)   opportunity cost
C)   equality
D)   trade-offsE) B) and D)
F) All of the above

Question 6

Trade-offs are involved in most policy decisions.

Accepted Answer

A) True 
 B)False

Question 7

Among economic models,the circular-flow diagram is unusual in that it

Accepted Answer

A)   drastically simplifies the real world.
B)   features more than one type of market.
C)   features flows of dollars.
D)   does not involve mathematics.E) C) and D)
F) B) and C)

Question 8

Which of these terms are used interchangeably?

Accepted Answer

A)   "goods and services" and "inputs"
B)   "goods and services" and "factors of production"
C)   "inputs" and "factors of production"
D)   "land,labor,and capital" and "goods and services"E) B) and C)
F) C) and D)

Question 9

Economists speaking like policy advisers make

Accepted Answer

A)   positive statements.
B)   descriptive statements.
C)   claims about how the world is.
D)   claims about how the world should be.E) A) and D)
F) B) and C)

Question 10

Normative statements are

Accepted Answer

A)   descriptive.
B)   claims about how the world should be.
C)   claims about how the world is.
D)   made by economists speaking as scientists.E) A) and B)
F) A) and C)

Question 11

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

Question 12

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 13

Figure 2-3 
-Refer to Figure 2-3.Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

A)   J,L
B)   J,L,M
C)   K,N
D)   ME) None of the above
F) All of the above

Question 14

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 15

In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

Accepted Answer

A) True 
 B)False

Question 16

The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

Accepted Answer

A)   performing an experiment in an economic system.
B)   applying mathematical methods to economic analysis.
C)   analyzing available data.
D)   formulating theories about economic events.E) All of the above
F) C) and D)

Question 17

In surveys of professional economists,fourteen propositions were endorsed by an overwhelming majority of respondents.

Accepted Answer

A) True 
 B)False

Question 18

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

Accepted Answer

A) True 
 B)False

Question 19

The point where both x and y are zero is known as the

Accepted Answer

A)   origin.
B)   null.
C)   zero coordinate.
D)   center.E) C) and D)
F) B) and D)

Question 20

Normative conclusions

Accepted Answer

A)   come from positive analysis alone.
B)   are based on ignorance of positive analysis.
C)   involve value judgments.
D)   reflect the economist's role as scientist.E) A) and C)
F) C) and D)

Exam 2: Thinking Like an Economist

Among economic models,the circular-flow diagram is unusual in that it

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Which of the following concepts cannot be illustrated by the production possibilities frontier?

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Normative statements are

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Normative conclusions

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

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The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in

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When two variables have a negative correlation,

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

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Which of the following is correct?

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In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

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The point where both x and y are zero is known as the

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Figure 2-3 -Refer to Figure 2-3.Unemployment could cause this economy to produce at which point(s) ?

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Which of these terms are used interchangeably?

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In surveys of professional economists,fourteen propositions were endorsed by an overwhelming majority of respondents.

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Normative statements are

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Trade-offs are involved in most policy decisions.

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

Correct AnswerverifiedShow Answer

Economists speaking like policy advisers make

Correct AnswerverifiedShow Answer

Evaluating normative statements involves values as well as facts.

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The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

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