Exam 2: Thinking Like an Economist

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point B to point D is 15 doghouses.

Figure 2-8 Panel (a)Panel (b) -Refer to Figure 2-8,Panel (a).Production is

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

In the circular-flow diagram,another name for goods and services produced by firms is

For economists,statements about the world are of two types:

Figure 2-1 -Refer to Figure 2-1.Enid completes her first week of employment working as a hairdresser at a salon.On Friday of that week,she receives her first paycheck.To which of the arrows does this transaction directly contribute?

Figure 2-12 -Refer to Figure 2-12.Taking cause and effect into account,which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Which of the following trade-offs does the production possibilities frontier illustrate?

The first number in any ordered pair is

Figure 2-6 -Refer to Figure 2-6.What is the opportunity cost of moving from point A to point B?

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

In the simple circular-flow diagram,

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Identify each of the following topics as being part of microeconomics or macroeconomics: a.the impact of a change in consumer income on the purchase of luxury automobiles b.the effect of a change in the price of Coke on the purchase of Pepsi c.the impact of a war in the Middle East on the rate of inflation in the United States d.factors influencing the rate of economic growth e. factors influencing the demand for tractors f. the impact of tax policy on national saving g. the effect of pollution taxes on the U.S.copper industry h. the degree of competition in the cable television industry i. the effect of a balanced-budget amendment on economic stability j. the impact of deregulation on the savings and loan industry

Positive statements are descriptive,while normative statements are prescriptive.

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Which markets are represented in the simple circular-flow diagram?

Figure 2-13 -Refer to Figure 2-13.The curves shown are

An economy's production of two goods is efficient if