Exam 2: Thinking Like an Economist

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

If a line passes through the points (20,5) and (10,10), then the slope of the line is 1/2.

Economists use one standard set of assumptions to answer all economic questions.

The institution that sets the nation's monetary policy is called the

Deciding that A causes B when in fact B causes A is a mistake called omitted variable bias.

Different values are not a reason for disagreement among economists.

Figure 2-15 ​ ​ -Refer to Figure 2-15. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

The circular flow model is not used anymore because it fails to perfectly replicate real world situations.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

Good assumptions simplify a problem without substantially affecting the answer.

Economists at which of the following government offices help formulate spending plans and regulatory policies?

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

Table 2-3 ​ -Refer to Table 2-3. Which of the following combinations of corn and rice is not currently attainable but would be attainable if there was an improvement in overall production technology?

In the ordered pair (19, 25), 25 is the

Figure 2-12 ​ ​ ​ ​ ​ ​ -Refer to Figure 2-12. What does the arrow going from oval B to rectangle 2 represent in the figure?

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Which of the following statements is correct about the roles of economists?

Figure 2-3 -Refer to Figure 2-3. It is not possible for this economy to produce at point

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