Exam 2: Thinking Like an Economist

In the markets for goods and services, as in the markets for the factors of production, households are buyers and firms are sellers.

Figure 2-10 -Refer to Figure 2-10. What is the slope of the curve between point A and point B?

An efficient outcome in economics is one in which the economy is conserving the largest possible amount of resources, while still meeting the needs of society.

Figure 2-10 -Refer to Figure 2-10. What is the movement from point B to point C?

In what region of the production possibilities frontier can an economy produce?

Figure 2-2 -Refer to Figure 2-2. What do boxes A and B represent?

Figure 2-6 -Refer to Figure 2-6. What is the opportunity cost to society of moving from point B to point C?

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of toy cars from 200 to 300?

Figure 2-11 -Refer to Figure 2-11. Points A, B, and D represent feasible or attainable outcomes for society.

Which statement does NOT illustrate a characteristic of an economic model?

What is another name for goods and services produced by firms?

What did John Maynard Keynes believe the ideas of economists to be?

What do economists do when they attempt to simplify the real world and make it easier to understand?

While the scientific method is applicable to studying natural sciences, it is not useful in studying an economic system.

What is a characteristic of the circular-flow model?

Figure 2-3 -Refer to Figure 2-3. Which point or points are inefficient?

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 550 to 600?

An economy is being efficient if it is impossible to produce more of one good without producing less of another.

What are economists who try to explain economic phenomena considered?

What is the first number in an ordered pair?