Exam 2: Thinking Like an Economist

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

In the circular flow diagram, who owns the factors of production and consumes all of the goods and services produced?

In the circular-flow diagram,

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?

Figure 2-8 -Refer to Figure 2-8. Point K represents an outcome in which

Macroeconomics is the study of

Evaluating normative statements involves values as well as facts.

The slope of a line passing through the points (15, 3) and (10, 6) is

Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

"Minimum wage laws result in unemployment" is a normative statement, while "the minimum wage should be higher" is a positive statement.

Figure 2-13 -Refer to Figure 2-13. Which of the following statements is true about point G for this economy?

Who would be more likely to study the effects of rent control on housing in New York City, a macroeconomist or a microeconomist?

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Table 2-3 Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

Which types of models are built with assumptions?

Which of the following is an example of a positive, as opposed to normative, statement?

Economists speaking like scientists make

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two -Refer to Figure 2-14. If this society moves from point U to point V,