Exam 2: Thinking Like an Economist

According to the circular flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

In the circular-flow diagram, factors of production are the goods and services produced by firms.

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

Almost all economists agree that tariffs and import quotas

The scientific method can be applied to the study of economics.

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Economists use some familiar terms in specialized ways

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. The opportunity cost of moving from point U to point R is

Economists at the U.S. Department of the Treasury help design U.S. coins and paper money.

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

For an economist, the idea of making assumptions is regarded generally as a

A normative economic statement such as "The minimum wage should be abolished"

Who would be more likely to study the effects of foreign competition on the accounting industry, a macroeconomist or a microeconomist?

In addition to advising the president, one duty of the Council of Economic Advisers is to

A pie chart is a way to display information regarding two variables.

A model that shows how dollars flow through markets among households and firms is called the

Two variables that have a negative correlation move in opposite directions.

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. Which of the following could result in a movement from point A to point B?

Figure 2-5 -Refer to Figure 2-5. Efficient production is represented by which point(s)?