Exam 2: Thinking Like an Economist

With respect to how economists study the economy,which of the following statements is most accurate?

Economists sometimes give conflicting advice because

Figure 2-2 -Refer to Figure 2-2.If Box A of this circular-flow diagram represents firms,then which box represents households?

Almost all economists agree that rent control

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Figure 2-5 -Refer to Figure 2-5.If this economy moves from point A to point B,then which of the following statements is correct?

Figure 2-2 -Refer to Figure 2-2.If households are buyers in the markets represented by Box C of this circular-flow diagram,then

If an economy is producing efficiently,then

The y-coordinate is the

There is only one explanation for why economists give conflicting advice on policy issues,and it is that they have different values about what policy should try to accomplish.

Economists,like mathematicians,physicists,and biologists,

Figure 2-11 -Refer to Figure 2-11.The shift of the production possibilities frontier from A to B can best be described as

Using the outline below,draw a circular-flow diagram representing the interactions between households and firms in a simple economy.Explain briefly the various parts of the diagram.

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of an additional doghouse increases as more doghouses are produced.

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Efficiency is illustrated by

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

Economists view positive statements as

In building economic models,economists often omit

Economists speaking like scientists make