Exam 2: Thinking Like an Economist

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Economists at which administrative department help enforce the nation's antitrust laws?

A pie chart is a way to display information regarding two variables.

Economists acting as scientists make positive statements, while economists acting as policy advisers make normative statements.

Figure 2-10 ​ ​ ​ ​ ​ -Refer to Figure 2-10. The opportunity cost of an additional doghouse increases as more doghouses are produced.

Table 2-4 Mobile Phones Pizzas 0 10,000 200 8,000 500 6,000 900 4,000 1400 2,000 2000 0 -Refer to Table 2-4. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Figure 2-15 ​ ​ -Refer to Figure 2-15. What is the x-coordinate of point R?

In the markets for goods and services in the circular flow diagram, households act as

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Figure 2-10 ​ ​ ​ ​ ​ -Refer to Figure 2-10. The opportunity cost of moving from point B to point A is zero.

The bowed-outward shape of the production possibilities frontier can be explained by the fact that

Production possibilities frontiers can be used to illustrate scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological advances, and economic growth.

Figure 2-3 -Refer to Figure 2-3. Efficient production is represented by which point(s)?

Table 2-3 ​ -Refer to Table 2-3. What is the opportunity cost of increasing the production of corn from 500 bushels to 1000 bushels?

Figure 2-10 ​ ​ ​ ​ ​ -Refer to Figure 2-10. Points B and C represent infeasible outcomes for this economy.

Another term for factors of production is

Figure 2-12 ​ ​ ​ ​ ​ ​ -Refer to Figure 2-12. What is the name of the model depicted in the figure?

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

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes. a.On the graph, identify the area of feasible outcomes and the area of infeasible outcomes. b.On the graph, label a point that is efficient and a point that is inefficient. c.On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy. d.On a second graph, illustrate the effect of a new computerized assembly line in the production of hammers on this economy.