Exam 2: Thinking Like an Economist

Economists all agree that the government's carbon tax is the best way to reduce pollution emissions

Graph 2-4 -Refer to Graph 2-4. On the production possibilities frontier shown, the opportunity cost of getting five additional bikes by moving from point A to point C is:

Microeconomics is the study of decision making at the level of the individual household and firm, while macroeconomics is the study of the economy as a whole.

Graph 2-7 -Refer to Graph 2-7. In the production possibilities frontier shown, what is the opportunity cost to society of moving from point C to point E?

Graph 2-6 -Refer to Graph 2-6. In the graph shown, the movement from frontier A to B can best be described as:

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.

While the scientific method is applicable to studying natural sciences, it is not useful in studying an economic system.

Graph 2-9 -Refer to Graph 2-9. In the graph shown, the movement from point A to point B is:

The slope of a line is calculated as:

The concept of opportunity cost is best represented by the:

What is the purpose of models in economics? What are the two economic models presented in chapter two?

The difference between natural scientists and economists is that natural scientists do not use simplifying assumptions in their models.

Suppose an economy produces two products. These are fish and logs. If fish stocks become depleted by over-fishing, what would happen to the production possibilities frontier?

Making the argument that because empty alcohol containers are found at many accidents, containers therefore cause accidents, is an example of:

Graph 2-3 -Refer to Graph 2-3. On the production possibilities frontier shown, at which point or points is it possible for this economy to produce?

Table 2-1 -Refer to Table 2-1. What is the opportunity cost of increasing the production of cheese from 900 kg to 1200 kg?

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the:

Table 2-1 -Refer to Table 2-1. What is the most accurate statement about the opportunity cost of producing an additional 50 computers in Erehwon?

Graph 2-13 -Refer to Graph 2-13. For the production possibilities frontier illustrated in the graph shown: a. how would you measure the opportunity cost of obtaining more computers? b. how does that opportunity cost change as society chooses to produce and consume more computers? c. why does the opportunity cost change that way?

What is the difference between a movement along a curve and a shift of a curve? What is the simplest way to tell when it is necessary to shift a curve?