Exam 2: Thinking Like an Economist

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

Which of these statements about economic models is correct?

Table 2-4 Production Possibilities for Picnicland -Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

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

An ordered pair is

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

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

Table 2-5 -Home is a country that produces two goods, pears and cellular phones. Last year, Home produced 450 bushels of pears and 1050 cellular phones. This year it produced 450 bushels of pears and 2000 cellular phones. Given no other information, which of the following events could explain this change?

A microeconomist - as opposed to a macroeconomist - might study

Almost all economists agree that rent control

If a line passes through the points 20,5) and 10,10), then the slope of the line is -2.

When economists make

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

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

Figure 2-7 -Refer to Figure 2-7. What is the opportunity cost of moving from point M to point L?

Almost all economists agree that local and state governments should

The Federal Reserve

Figure 2-23 -Refer to Figure 2-23. The opportunity cost of moving from point B to point A is zero.

Figure 2-9 Panel a) Panel b) -Refer to Figure 2-9, Panel a). The movement from point M to point K could be caused by

The country of Gerance produces two goods, cars and wine. Last year, it produced 1,000 cars and 15,000 cases of wine. This year, it produced 1,300 cars and 20,000 cases of wine. Given no other information, which of the following events could not explain this change?