Exam 2: Thinking Like an Economist

Use the following Figure to answer the question : 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

A production possibilities frontier shifts outward when

When a relevant variable that is not named on either axis changes,

Good assumptions simplify a problem without substantially affecting the answer.

Who would be more likely to study the effects of government spending on the unemployment rate, a macroeconomist or a microeconomist?

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

The scientific method is the dispassionate development and testing of theories about how the world works.

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

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?

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

Positive statements are

Use the following Figure to answer the question : Figure 2-22 : -Refer to Figure 2-22. How are price and quantity related in this graph?

When two variables move in the same direction, the curve relating them is

Where can an economy not produce?

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

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

Use the following Figure to answer the question : Figure 2-5: -Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

Is the following a positive or normative statement? The federal minimum wage is lower than many state minimum wages.

In conducting their research, economists often substitute historical events and historical episodes for

Use the following Table to answer the question : Table 2-3 : Production Possibilities for Footville -Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?