Exam 2: Thinking Like an Economist

Figure 2-15 -Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and cars. As the economy moves from point A to point D, is the opportunity cost of cars increasing, constant, or decreasing?

When two variables move in the same direction, the curve relating them is downward sloping, and we say the variables are negatively related.

When income increases the slope of an individual's demand curve, the demand curve

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

In the markets for goods and services in the circular flow diagram, households act as

Which of the following steps does an economist take when studying the economy?

Different values are not a reason for disagreement among economists.

Points outside the production possibilities frontier represent infeasible levels of production.

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

An economic model can accurately explain how the economy is organized because it is designed to include, to the extent possible, all features of the real world.

In principle, we can

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

Figure 2-5 -Refer to Figure 2-5. It is not possible for this economy to produce at point

Economists at which of the following offices help formulate spending plans and regulatory policies?

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. Which points) on the graph isare) efficient production possibilities?

A relatively steep demand curve indicates that

In the circular-flow diagram,