Exam 2: Thinking Like an Economist

The simple circular-flow diagram is a model that includes only some key players in the real economy. Which of the following key players are omitted from the simple circular-flow model?

Good assumptions simplify a problem without substantially affecting the answer.

Economic models

Figure 2-16 In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour.Commuter Rail Passengers by Frequency of Service -Refer to Figure 2-16. A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars. You warn the policymaker about making a reverse causality mistake with which of the following statements?

Figure 2-12 -Refer to Figure 2-12. Which points are not currently attainable but could become achievable for this economy if there is an improvement in technology?

Economists work both inside and outside the administrative branch of the U.S. government.

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

The slope of an upward-sloping line is positive, and the slope of a downward-sloping line is negative.

A macroeconomist, rather than a microeconomist, would study the effects on a market from two firms merging.

"If all economists were laid end to end, they would not reach a conclusion." Who made this whimsical observation?

The point where both x and y are zero is known as the

The circular-flow diagram is a

A circular-flow diagram is a model that

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.

Figure 2-4 -Refer to Figure 2-4. The opportunity cost of this economy moving from point Z to point Y is

Table 2-3 Production Possibilities for Libraryland Bouks Naparines 400 0 300 200 200 350 100 450 0 500 -Refer to Table 2-3. Which of the following statements is correct?

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

Which of these statements about economic models is correct?

When economists are trying to explain the world, they are

Figure 2-1 -Refer to Figure 2-1. Ali buys a new pair of shoes at a shoe store. To which of the arrows does this transaction directly contribute?