Exam 2: Thinking Like an Economist

Dean says that, 'the imposition of a tax on beer will raise its price'.Kylie argues that, 'taxes should be imposed on beer because university students drink too much'.We can conclude that:

In the circular-flow diagram, the only return households get from supplying factors of production to firms are wages.

In a circular-flow diagram, spending on goods and services flows from households to firms and income flows from firms to households.

Data to test economic theories generally come from:

Consider the statement 'banning the export of live parrots from Australia has resulted in the black market price for cockatoos rising and an increase in poaching'.This is an example of a normative statement.

The concept of opportunity cost is best represented by the:

Because it is difficult for economists to use experiments to generate economic data, they:

Select the macroeconomic statement from the following:

Graph 2-3 -Refer to Graph 2-3.On the production possibilities frontier shown, what does point F represent?

Table 2-1 $\text { Production possibilities for Poland }$ Vodka (l) Potatoes (kg) 1000 0 850 400 650 760 430 900 175 1200 0 1700 -Refer to Table 2-1.What is the opportunity cost to Poland of increasing the production of Vodka from 430 to 850?

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

Economists mostly agree that their role in public policy formation is to analyse proposals and inform public debate.

Graph 2-7 -Refer to Graph 2-7.In the production possibilities frontier unemployment most likely caused a movement from:

Sometimes economists who have the same positive views about how the economy works give conflicting advice on policy because they have different values.

Which of the following does economics NOT attempt to do?

Any point inside the production possibilities frontier is an efficient one.

What is the purpose of models in economics? What are the two economic models presented in chapter two?

According to John Maynard Keynes, an economist should only give advice based on disinterested observations.

For economists, statements about the world are of two types:

The foundation stones from which economic models are built are: