Exam 2: Thinking Like an Economist

In the simple circular-flow diagram,

Figure 2-2 -Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Points on the production possibilities frontier represent efficient levels of production.

When an economist evaluates a positive statement, he or she is primarily

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). Production at point Y is

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

Unemployment causes production levels to be inefficient.

A statement describing how the world should be

Figure 2-4 -Refer to Figure 2-4. This economy cannot produce at which point(s)?

Figure 2-6 -Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

The three main factors of production, or categories of inputs, used by firms to produce goods and services are

In the ordered pair (5, 3), 3 is the

A model that shows how dollars flow through markets among households and firms is called the

In the ordered pair (20, 30), 20 is the

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

In principle, we can

Economists regard events from the past as

Changes in one variable on a graph might be caused by the other variable on the graph or by a third omitted variable.

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The opportunity cost of moving from point M to point L is