Exam 2: Thinking Like an Economist

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 Here chooses to produce relatively more consumer goods than There. What will happen as a result?

In a pie chart, what does each "slice" of the pie represent?

Figure 2-7 -What would unemployment cause an economy to do?

Who said, "The whole of science is nothing more than a refinement of everyday thinking"?

What is the x-coordinate?

How would any economist who says all policy decisions are easy be best described?

Suppose an economy produces two goods: winter coats and skis. This economy always operates on its production possibilities frontier. Last year, it produced 750 units of coats and 250 pairs of skis. This year, it is producing 820 units of coats and 275 sets of skis. Which of the following would NOT explain the increase in output?

What would be considered a topic of study in macroeconomics?

What is a duty of Human Resources and Skills Development Canada?

What is the production possibilities frontier?

-Refer to Table 2-1. How does the opportunity cost of producing an additional 100 toy cars change as more toy cars are produced?

Figure 2-6 -Refer to Figure 2-6. What was the most likely cause of the movement from point C to point D?

What are factors of production?

What do economists at Industry Canada do?

What is a model?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of goods and services?

Why are production possibilities frontiers usually bowed outward?

Figure 2-10 -Refer to Figure 2-10. How are the price of roses and the quantity of roses related?

When studying the effects of public policy changes, what do economists do?

Figure 2-3 -Refer to Figure 2-3. At which point or points can the economy produce?