Exam 2: Thinking Like an Economist

In the markets for goods and services in the circular-flow diagram,

Which of the following transactions does not take place in the markets for the factors of production in the circular-flow diagram?

It is possible for an economy to increase its production of both goods if the economy

Figure 2-4 -Refer to Figure 2-4. The opportunity cost of obtaining 10 additional lamps by moving from point W to point Z is

A circular-flow diagram is a visual model of the economy.

Figure 2-5 -Refer to Figure 2-5. If this economy devotes one-half of its available resources to the production of soccer balls and the other half to the production of sweaters, it could produce

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of an additional doghouse increases as more doghouses are produced.

The x-coordinate of an ordered pair specifies the

In the circular-flow diagram, firms consume all the goods and services that they produce.

In the circular-flow diagram, in the markets for

When studying the effects of changes in public policy, economists believe that

A relatively steep demand curve indicates that

A production possibilities frontier shifts outward when

"Allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do" is an example of a

John Maynard Keynes observed that during rare times of deep financial and economic crisis, when the "invisible hand" has temporarily ceased to function,

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

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

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

John Maynard Keynes believed the ideas of economists to be

Which of the following statements about models is correct?