Exam 2: Thinking Like an Economist

In a pie chart, what does each "slice" of the pie represent?

Of what use is a coordinate system?

Figure 2-7 -Refer to Figure 2-7. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

Since natural experiments offered by history cannot be used in economics, carefully constructed laboratory experiments must be used.

For what reason are production possibilities frontiers usually bowed outward?

Suppose a nation is currently producing at a point inside its production possibilities frontier. What do we know?

What do almost all economists agree about rent control?

Figure 2-6 -When an economy is operating inside its production possibilities frontier, what do we know?

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Which of the following is NOT a positive statement?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

In a circular-flow diagram, one loop shows the flow of real goods, services, and factors of production, and the other loop shows the corresponding flow of dollars.

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of spending by households?

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

When economists attempt to simplify the real world and make it easier to understand, what do they do?

The field of economics is divided into two subfields: microeconomics and macroeconomics.

What is the point where both x and y are zero?

Why do economists use models?

What does the x-coordinate give?

Figure 2-2 -Refer to Figure 2-2. In which market are households sellers?