Transcript Who said, “The whole of science is nothing more than the

Who said, “The whole of science is nothing
more than the refinement of everyday
thinking”?
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Isaac Newton
Albert Einstein
Benjamin Franklin
Sigmund Freud
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Refer to Figure 2-8. If this economy puts all of its
resources into the production of bathtubs it could
produce
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35 barrels and no bathtubs.
no barrels and 16 bathtubs.
20 barrels and 12 bathtubs.
This economy would not choose to put all
of its resources into the production of one
good.
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A macroeconomist would study each
of the following EXCEPT the
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effect of changes in
saving rates on GDP.
effect of tax policy on the
rate of economic growth.
impact of monetary policy
on the rate of inflation.
impact of minimum-wage
laws on employment in
the fast food industry.
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A normative statement
describes how the world
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is.
will be in the future.
ought to be.
was in the past.
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The President of the United States receives
tax policy advice from economists in the
1. Congressional
Budget Office.
2. Federal Reserve.
3. Department of
Treasury.
4. Department of
Justice.
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Refer to Figure 2-9. What would you say about the
relationship between coffee and hours without sleep?
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The more coffee a person drinks per day, the
longer he can go without sleep.
There is no relationship between how much
coffee per day a person drinks and how long
they can go without sleep.
The relationship between cups of coffee per
day and time without sleep is too
unpredictable to consider.
The less coffee a person drinks per day, the
more time he can go without sleep.
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Which of the following is a correct
statement about slope?
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A horizontal line has a zero
slope, and a vertical line has
an infinite slope.
A horizontal line has a slope of
1, and a vertical line has a
slope of -1.
A horizontal line has an infinite
slope, and a vertical line has a
zero slope.
None of the above are correct.
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Bill has noticed that increases in unemployment insurance claims are
associated with recessions, and therefore advocates limits on
unemployment insurance so as to prevent recessions. Martha has noticed
that most drug addicts once attended schools, and therefore advocates
getting rid of schools so as to prevent drug addiction.
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The reasoning of both Bill and Martha
suffers from the reverse causality
problem.
Bill’s reasoning suffers from the
reverse causality problem and Martha’s
reasoning suffers from the omitted
variable problem.
Martha’s reasoning suffers from the
reverse causality problem and Bill’s
reasoning suffers from the omitted
variable problem.
The reasoning of both Bill and Martha
suffers from the omitted variable
problem.
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Which of the following is NOT
true concerning models?
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Models assume away
irrelevant details.
Models can explain how
the economy is
organized.
Models cannot be used to
make predictions.
Models simplify reality.
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Factors of production are
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1. used to produce
goods and services.
2. owned by firms.
3. abundant in most
economies.
4. used by both firms
and households.
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Refer to Figure 2-1. Which arrow shows
the flow of spending by households?
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B
D
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C
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Refer to Figure 2-2. Factors of production
are owned by
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the government.
firms.
households.
All are correct.
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The curved shape of the production
possibilities frontier can be explained by
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1. economic growth.
2. scarcity.
3. increasing cost of
production.
4. constant cost of
production.
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Refer to Figure 2-3. Which point represents
the maximum possible production of tubas?
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E
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D
A
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Refer to Figure 2-4. The opportunity cost in terms
of toothbrushes of getting 10 additional toasters by
moving from point B to point A is
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5 toothbrushes.
10 toothbrushes.
zero, since the economy has
the additional resources to
produce 10 additional toasters.
20 toothbrushes.
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When an economy is operating inside its
production possibilities frontier we know
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to produce more of one good,
the economy would have to
give up some of the other
good.
moving to a point on its
production possibilities frontier
would be economic growth.
the economy is operating with
efficiency.
there are unused resources or
inefficiencies in the economy.
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Refer to Figure 2-7. Which of the following would
most likely have caused the production possibilities
frontier to shift outward from A to B?
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an increase in resources
necessary to produce capital
goods
an increase in unemployment
an improvement in the technology
of producing consumer goods
an increase in the overall level of
technology in the economy
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Refer to Figure 2-8.. If this economy moved
from point C to point E,
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there would be no gain in either
bathtubs or barrels.
it still would not be producing efficiently.
It is not possible for this economy to
move from point C to point E without
additional resources.
it would be producing more barrels and
more bathtubs than at point C.
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Microeconomics is the study of
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the behavior of
consumers.
how individual
households and firms
make decisions.
how the economy as a
whole works.
how government affects
the economy.
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Which of the following would be considered a
topic of study in macroeconomics?
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the effect of an increase in the
price of imported coffee beans on
the U.S. coffee industry
the effect of an increase in the
price of imported oil on the U.S.
inflation rate
the impact of agricultural price
support programs in the cotton
industry
the effect on U.S. steel producers
of an import quota imposed on
foreign steel
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