ECON 2023 ..CHAPTER 2 :THINK LIKE AN ECONOMIST 100% CORRECT

The slope of a fairly flat upward-sloping line will be a large negative number. large positive number. small negative number. small positive number. Economic models are not useful because they omit many real-world details. are useful because they do not omit any real-world details. are usually composed of diagrams and equations. are usually plastic representations of the economy. Refer to Figure 2-16. The opportunity cost of obtaining approximately 20 additional gadgets by moving from point B to point C is 0 widgets. 10 widgets. 20 widgets. none of the above; the economy cannot move from point B to point C. When two variables move in the same direction, the curve relating them is upward sloping, and we say the variables are positively related. upward sloping, and we say the variables are negatively related. downward sloping, and we say the variables are positively related. downward sloping, and we say the variables are negatively related. Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600? 200 socks 300 socks 400 socks 100 socks The two loops in the circular-flow diagram represent the flows of inputs and outputs and the flow of dollars. the flow of inputs into production processes and the flow of outputs from production processes. the flow of dollars and the flow of financial assets. the flow of goods and the flow of services. President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would have 100 questions and 3,000 answers. have no questions but hundreds of answers. never produce a winner. have 1,000 questions but no answers. The slope of a line that passes through the points (5, 8) and (12, 12) is -7/4. 7/4. -4/7. 4/7. Economists face an obstacle that many other scientists do not face. What is that obstacle? Economics cannot be addressed objectively; it must be addressed subjectively. The scientific method cannot be applied to the study of economics. It is often impractical to perform experiments in economics. It is often difficult to formulate theories in economics. Refer to Figure 2-1. Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute? C and D B only A and B C only The x-coordinate is the first number of an ordered pair and represents the point's vertical location. second number of an ordered pair and represents the point's vertical location. first number of an ordered pair and represents the point's horizontal location. second number of an ordered pair and represents the point's horizontal location. Which of the following trade-offs does the production possibilities frontier illustrate? Once an economy has reached the efficient points on its production possibilities frontier, the only way of getting more of one good is to get less of the other. If an economy wants to increase efficiency in production, then it must sacrifice equality in consumption. For an economy to consume more of one good, it must stop consuming the other good entirely. For an economy to produce and consume goods, it must sacrifice environmental quality. Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement? 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. 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. 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. One economist believes the government should tax a household’s income; another economist believes the government should tax a household’s consumption. In the circular-flow diagram, another name for goods and services produced by firms is resources. inputs. factors of production. output. The president of the United States receives tax policy advice from economists in the Department of Justice. Federal Reserve. Congressional Budget Office. Department of the Treasury. Refer to Figure 2-16. Efficient production is represented by which point(s)? D C, B B, D, E A, C The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in applying mathematical methods to economic analysis. formulating theories about economic events. analyzing available data. performing an experiment in an economic system. Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents. As a student of economics, you know that this is a case of the “broken window fallacy.” this is a great use of taxpayer dollars. this policy diverts money from spending somewhere else in the economy. Both a and c are correct. Refer to Figure 2-7. This economy cannot produce at which point(s)? N, O, P Q N, O, P, Q L, M Refer to Figure 2-8. Inefficient production is represented by which point(s)? L K, M M L, M Which of these statements about economic models is correct? For economists, economic models provide insights about the world. Economic models are built with assumptions. Economic models are often composed of equations and diagrams. All of the above are correct. Economists make assumptions to provide issues for political discussion. make a complex world easier to understand. create policy alternatives that are incomplete or subject to criticism. make it easier to teach economic concepts and analysis. Refer to Figure 2-6. If this economy devotes one-half of its available resources to the production of blankets and the other half to the production of pillows, it could produce 240 pillows and 200 blankets. 120 pillows and 320 blankets. We would have to know the details of this economy’s technology in order to determine this. 180 pillows and 180 blankets. Between the two ordered pairs (3, 6) and (7, 18), the slope is 1/3 3. -3. -1/3. The slope of a line is equal to the value of y divided by the value of x. the change in the value of x divided by the change in the value of y. the change in the value of y divided by the change in the value of x. the horizontal distance divided by the vertical distance Refer to Figure 2-9, Panel (a). Production is possible at points J, K, L, and M, but efficient only at point K. possible at points J, L, M, and N, but efficient only at points J, L, and M. possible at points J, K, L, and M, but efficient only at points J, L, and M. possible at points J, L, M, and N, but efficient only at point N. Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snow blowers being sold. You inform him that his interpretation is incorrect due to shifting versus moving along a curve. slope mismatch. omitted variable bias. reverse causality. Economists use some familiar terms in specialized ways to provide a new and useful way of thinking about the world. to make the subject sound more complex than it is. because it was too difficult to come up with new terms. because every respectable field of study has its own language. Which of the following is an example of a capital input? an hour of a worker’s time a computer $50,000 a share of stock