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Chapter 2 Thinking Like an Economist




Question;30. A circular-flow model and production possibilities frontier are;similar in that;a.;neither;allows economic analysis to occur.;b.;neither;can be represented visually on a graph.;c.;both;make use of assumptions.;d.;both;make use of complex equations to arrive at solutions.;31. An economic theory about international trade that is based on the;assumption that there are only two countries trading two goods;a.;is;useless, since the real world has many countries trading many goods.;b.;can be;useful only in situations involving two countries and two goods.;c.;can be;useful in the classroom, but is useless in the real world.;d.;can be;useful in helping economists understand the complex world of international;trade involving many countries and many goods.;32. The art in scientific thinking -- whether in chemistry, economics;or biology -- is;a.;the;design and implementation of laboratory experiments.;b.;knowing;when to stop collecting data and when to start analyzing the data.;c.;deciding;which assumptions to make.;d.;being;able to mathematically model natural phenomena.;33. The art in scientific thinking is;a.;finding;the right problem to study.;b.;deciding;which assumptions to make.;c.;the;ability to make an abstract subject easy to understand.;d.;not;something in which economists have to be skilled.;34. The decision of which assumptions to make is;a.;an easy;decision for an economist, but a difficult decision for a physicist or a;chemist.;b.;not a;particularly important decision for an economist.;c.;usually;regarded as an art in scientific thinking.;d.;usually;regarded as the easiest part of the scientific method.;35. An example of a price that changes only infrequently is the price;of;a.;stocks;on the New York Stock Exchange.;b.;crude;oil.;c.;residential;real estate.;d.;magazines;sold at newsstands.;36. When studying the effects of public policy changes, economists;a.;always;refrain from making assumptions.;b.;sometimes;make different assumptions about the short run and the long run.;c.;consider;only the direct effects of those policy changes and not the indirect effects.;d.;consider;only the short-run effects of those policy changes and not the long-run;effects.;37. When studying the effects of changes in public policy, economists;believe that;a.;it is;important to distinguish between the short run and the long run.;b.;the;assumptions used in studying those effects should be the same for the short;run as for the long run.;c.;the;short-run effects of those changes are always more beneficial to society than;are the long-run effects.;d.;the;long-run effects of those changes are always more beneficial to society than;are the short-run effects.;38. A model can be accurately described as a;a.;theoretical;abstraction with very little value.;b.;device;that is useful only to the people who created it.;c.;realistic;and carefully constructed theory.;d.;simplification;of reality.;39. Which of the following statements about models is correct?;a.;The more;details a model includes, the better the model.;b.;Models;assume away irrelevant details.;c.;Models;cannot be used to explain how the economy functions.;d.;Models;cannot be used to make predictions.


Paper#55177 | Written in 18-Jul-2015

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