Exam 2: Thinking Like an Economist

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

In order to provide information on two variables, what must an economist use?

Figure 2-9 -Refer to Figure 2-9. What do cups of coffee per day and the hours that someone can go without sleep have?

The country of San Ignacio produces two goods: beach towels and soccer balls. Last year, it produced at a point inside its production possibilities frontier and currently it is operating at a point on the (same) production possibilities frontier. Which statement best explains the change?

What are economists who try to improve the world considered?

In the factors of production market, how do households and firms interact?

Why do economists make assumptions?

Using this outline, draw a circular-flow diagram representing the interactions between households and firms in a simple economy. Explain briefly the various parts of the diagram. Figure 2-12

What is the opportunity cost of obtaining more of one good, as it relates to the production possibilities frontier?

Suppose there are two countries, Here and There, which have identical amounts of resources, identical technologies, and identical populations. Both produce two types of goods-consumer goods and capital goods-and they both always operate on their production possibilities frontiers. The only difference is that this year There chooses to produce relatively more capital goods than Here. What will happen as a result?

Because it is difficult for economists to use experiments to generate data, what must they generally do?

Economists outside the government also offer policy advice. Which institution does NOT publish reports by economists?

What is a characteristic of a good theory?

Figure 2-2 -Refer to Figure 2-2. What do boxes C and D represent?

Figure 2-2 -Refer to Figure 2-2. In which market are firms sellers?

Suppose an economy produces two goods: clothes and cars. This economy always operates on its production possibilities frontier. Last year, it produced 91 units of clothes and 48 cars. This year, it is producing 95 units of clothes and 51 cars. Which of the following would NOT explain the increase in output?

"Society would be better if the welfare system were abolished" is a positive statement, not a normative statement.

Which statement best describes economic models?

Which statement best describes economic models?

What do economists at Foreign Affairs Canada and International Trade Canada do?