Exam 2: Thinking Like an Economist

When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced.

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Economists make assumptions to

Which of the following is not an assumption of the productions possibilities frontier?

Figure 2-4 -Refer to Figure 2-4. Efficient production is represented by which point(s)?

Who would be more likely to study the inflation rate in the United States, a macroeconomist or a microeconomist?

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the vertical location of the point.

A circular-flow model and production possibilities frontier are similar in that

When economists make normative statements, they are

When an economy is operating at a point on its production possibilities frontier, then

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). The opportunity cost of one cup of coffee is highest when the economy produces

One thing economists do to help them understand how the real world works is

Figure 2-3 -Refer to Figure 2-3. What do the ovals represent in the figure?

Which of the following is an example of a normative, as opposed to positive, statement?

The inner loop of the circular-flow diagram represents the flows of inputs and outputs. Which of the following does not appear on the inner loop?

A microeconomist - as opposed to a macroeconomist - might study

Figure 2-7 -Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. What is the opportunity cost of increasing production of mobile phones from 200 to 500?

In the circular-flow diagram, firms consume all the goods and services that they produce.