question

Which of the following terms are most closely associated with the study of economics?

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comparative advantage and deadweight loss

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Economists, like mathematicians, physicists, and psychologists,

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all the above are correct

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By scientific method we mean

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the dispassionate development and testing of theories about how the world works

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Economists regard events from the past as

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interesting and valuable, because those events are capable of helping us to understand the past, the present, and the future.

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The goal of an economist who formulates new theories is to

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contribute to an understanding of how the world works

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For an economist, the idea of making assumptions is regarded generally as a

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good idea, since doing so helps to simplify the complex world and make it easier to understand

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The decision of which assumptions to make is

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usually regarded as an art in scientific thinking

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When studying the effects of public policy changes, economists

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sometimes make different assumptions about the short run and the long run

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Which types of models are built with assumptions?

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economic models as well as models in other disciplines such as physics and sociology

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A model can be accurately described as a

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simplification of reality

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The circular-flow diagram is a

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visual model of how the economy is organized

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Factors of production are

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inputs into the production process

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In the circular-flow diagram,

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households are sellers in the markets for the factors of production

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In the circular-flow diagram,

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income paid to the factors of production flows from firms to households

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In the simple circular-flow diagram, households

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own the factors of production

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Which arrow represents the flow of goods and services?

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(this is an image, it's the inside arrow at the top of the flow chart) B

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Which arrow represents the flow of spending by households?

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(this is an image, it's the arrow on the outside rounding the top right corner) A

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In the markets for factors of production,

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households provide firms with labor, land, and capital

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The amount by which firms' sales revenue exceeds their payments to factors of production is called

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profit

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An economic outcome is said to be efficient if the economy is

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getting all it can get from the scarce resources it has available

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Production is efficient if the economy is producing at a point

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on the production possibilities frontier

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The economy has the ability to produce at which point or points?

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(this is an image) "The economy can produce any combination on or inside the frontier." BDE

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Which point represents the situation in which the economy is producing its maximum possible quantity of tubas?

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(this is an image) The dot closest to the tuba line. E

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At which point or points can the economy not currently produce?

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(this is an image) Any dot on past the curve, so AE.

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Which of the following events would explain the shift of the production possibilities frontier from A to B?

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(this is an image, curve A is increasing to curve B) The economy experienced a technological advance in the production of batteries

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Unemployment would cause an economy to

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produce inside its production possibilities frontier

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A production possibilities frontier can shift outward if

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there is a technological improvement

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The field of economics is traditionally divided into two broad subfields,

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microeconomics and macroeconomics

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Which of the following would be considered a topic of study in macroeconomics?

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unemployment in the nation OR the economy annual's growth rate

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

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the effect on the economy of changes in the nation's unemployment rate

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When economists are trying to explain the world, they are

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policy advisors

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When economists are trying to help improve the world they are

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scientists

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For economists, statements about the world are of two types:

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positive statements and normative statements

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Which of the following is an example of a positive statement?

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Prices rise when the government prints too much money

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Which of the following is an example of a normative statement?

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Reducing tax rates on the wealthy would benefit the nation

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Economists at the Treasury Department

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provide advice on tax policy to the President

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Economists in which cabinet-level department help enforce antitrust laws?

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Department of Justice

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Economists who are primarily responsible for advising Congress on economic matters work in which agency?

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the Congressional Budget Office

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The Council of Economic Advisers has

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three members and a staff of economists

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The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

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scientific judgments and values

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Almost all economists agree that rent control

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adversely affects the availability and quality of housing

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A survey of economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?

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all the above are correct

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John Maynard Keynes referred to economics as an easy subject,

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at which very few excel

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