Exam 2: Thinking Like an Economist

Points on the production possibilities frontier represent efficient levels of production.

When a production possibilities frontier is bowed outward, the opportunity cost of one good in terms of the other is constant.

The art in scientific thinking -- whether in chemistry, economics, or biology -- is

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). To gain 2 tractors by moving from point W to point V, society must sacrifice

Which two groups of decision makers are included in the simple circular-flow diagram?

Assumptions can simplify the complex world and make it easier to understand.

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of income payments?

When economists disagree about whether a policy is fair, they are expressing a difference in

Figure 2-23 -Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

Production is efficient if the economy is producing at a point

Figure 2-8 -Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

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

According to economist John Maynard Keynes, a great economist must also be a(n)

Figure 2-11 -Refer to Figure 2-11. Which of the following events would explain the shift of the production possibilities frontier from A to B?

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

In the circular-flow diagram, which of the following items represents a payment for a factor of production?

When economists disagree about whether the government should tax a household's income or its consumption, they are expressing a difference in

In the simple circular-flow diagram, the participants in the economy are

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

Figure 2-9 Panel (a) Panel (b) -Refer to Figure 2-9, Panel (a). Production at point K is