Exam 2: Thinking Like an Economist

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions?

Figure 2-21 -Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

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

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Economists speaking like policy advisers make

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Figure 2-16 -Refer to Figure 2-16. 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?

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Figure 2-5 -Refer to Figure 2-5. If this economy devotes all of its resources to the production of dryers, then it will produce

President Truman once said he wanted to find a one-armed economist because when he asked his economists for advice, they always answered, "On the one hand, ... On the other hand, ..." Truman's observation that economists' advice is not always straightforward

John Maynard Keynes described economics as an easy subject at which very few excel. Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?

An economic theory about international trade that is based on the assumption that there are only two countries trading two goods

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) and Panel (b). A shift of the economy's production possibilities frontier from Panel (a) to Panel (b) could be caused by

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

One way to characterize the difference between positive statements and normative statements is as follows:

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.

The bowed shape of the production possibilities frontier can be explained by the fact that