Exam 2: Thinking Like an Economist

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

Figure 2-2 -Refer to Figure 2-2. Devin works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Juan owns office buildings and rents his buildings to companies in exchange for rent payments. If Devin's income is represented by a flow of dollars from Box D to Box B of this circular-flow diagram, then Juan's income is represented by a flow of dollars

Figure 2-14 -Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 10 dishwashers.

Figure 2-8 -Refer to Figure 2-8, Panel (a). The opportunity cost of moving from point J to point L is

The circular-flow diagram is an example of

Figure 2-7 -Refer to Figure 2-7. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammers produced, in terms of nails,

Figure 2-2 -Refer to Figure 2-2. If the owners of land, labor, and capital are represented by Box B of this circular-flow diagram, then

A model that shows how dollars flow through markets among households and firms is called the

The President receives economic policy advice from economists at each of the following except

Figure 2-12 -Refer to Figure 2-12. One difference between points A and B is that

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

The design of tax policy is one of the responsibilities of economists who work at the

Figure 2-3 -Refer to Figure 2-3. This economy has the ability to produce at which point(s)?

Figure 2-10 -Refer to Figure 2-10. The shift of the production possibilities frontier from A to B illustrates

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Figure 2-12 -Refer to Figure 2-12. Which of the following combinations of points are both efficient and attainable for this economy?

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.

When an economist evaluates a positive statement, he or she is primarily

In the circular-flow diagram,

The art in scientific thinking is