Exam 2: Thinking Like an Economist

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

A technological advance in the production of the first good increases the opportunity cost of the first good in terms of the second good.

An economic model can accurately explain how the economy is organized because it is designed to include,to the extent possible,all features of the real world.

Economists speaking like scientists make

The Federal Reserve

In constructing models,economists

When a variable that is not named on either axis of a graph changes,we read the change as a movement along the curve.

Which of the following is not an example of a graph of a single variable?

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

In a certain economy,peanuts and books are produced,and the economy currently operates on its production possibilities frontier.Which of the following events would allow the economy to produce more peanuts and more books,relative to the quantities of those goods that are being produced now?

The circular-flow diagram is a

"Prices rise when the quantity of money rises rapidly" is an example of a

Which of the following statements about the circular-flow diagram is correct?

While the production possibilities frontier is a useful model,it cannot be used to illustrate economic growth.

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point B to point A is zero.

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements,including which of the following?

Figure 2-4 -Refer to Figure 2-4.It is not possible for this economy to produce at point

When studying the effects of public policy changes,economists

The x-coordinate of an ordered pair specifies the

In economics,capital refers to