Exam 2: Thinking Like an Economist

Figure 2-14 -Refer to Figure 2-14. It is possible for this economy to produce 30 doghouses and 20 dishwashers.

In the circular flow diagram, when Daphne purchases a new mobile phone, she participates in the markets for

According to the circular-flow diagram, if Suzy is a worker who delivers flowers for Happy Day Flower Company, she participates

Figure 2-3 -Refer to Figure 2-3. What is the name of the model depicted in the figure?

In the circular-flow diagram, which of the following items flows from firms to households through the markets for the factors of production?

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of one sofa is

The slope of a line is equal to

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. A movement from point A to point Z is called

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Figure 2-16 -Refer to Figure 2-16. Taking cause and effect into account, which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

The y-coordinate is the

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

Microeconomics is the study of how households and firms make decisions and how they interact in specific markets.

In the circular-flow diagram, which of the following items does not flow from households to firms?

Figure 2-4 -Refer to Figure 2-4. Efficient production is represented by which point(s)?

Production possibilities frontiers are usually bowed outward. This is because

The trade-off between the production of one good and the production of another good can change over time because of technological advances.

Figure 2-4 -Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?