Exam 2: Thinking Like an Economist

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

Which of the following statements about economic models is correct?

Use the following Figure to answer the question : Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. A movement from point A to point B is called

Use the following Figure to answer the question : Figure 2-7 -Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

Use the following Table to answer the question : Table 2-5 -Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

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

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

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

Which of these statements about economic models is correct?

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

The duties of the Council of Economic Advisers are to advise the president of the United States and to determine U.S. monetary policy.

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

Use the following Figure to answer the question : Figure 2-16 -Refer to Figure 2-16. Cups of coffee per day and the hours that someone can go without sleep appear to have

Economists view normative statements as

A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a). The movement from point W to point Y could be caused by

Use the following Figure to answer the question : Figure 2-23 : -Refer to Figure 2-23. Point B represents an inefficient outcome for this economy.

Which of the following trade-offs does the production possibilities frontier illustrate?

Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes. a. On the graph, identify the area of feasible outcomes and the area of infeasible outcomes. b. On the graph, label a point that is efficient and a point that is inefficient. c. On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource needed to make both horseshoes and hammers, on this economy. d. On a second graph, illustrate the effect of a new computerized assembly line in the production of hammers on this economy.