Exam 2: Thinking Like an Economist

Which of the following is an example of a capital input?

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

Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. Inefficient production is represented by which points?

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

Use the following Table to answer the question : Table 2-5 -Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

In the circular-flow diagram, which of the following items does not flow from firms to households?

Use the following Table to answer the question : 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 may disagree about the validity of alternative positive theories about how the world works.

Use the following Figure to answer the question : Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair 8, 24)

Economic models

When two variables have a positive correlation,

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers.

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Use the following Figure to answer the question : Figure 2-4 : -Refer to Figure 2-4. This economy has the ability to produce at which points)?

Use the following Table to answer the question : Table 2-5 -Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?

The slope of a line is equal to

When economists make normative statements, they are

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What do the inner arrows represent in the figure?

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a). Production at point Y is