Exam 2: Thinking Like an Economist

For economists, conducting experiments is often difficult and sometimes impossible.

A circular-flow diagram is a visual model of the economy.

In addition to advising the president, one duty of the Council of Economic Advisers is to

Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. The slope of the line containing points Y and Z is

Which of the following is a correct statement about production possibilities frontiers?

Which of the following is not an example of a graph of a single variable?

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

When economists are trying to explain the world, they are scientists. When they are trying to improve it, they are

In the circular-flow diagram, one loop represents the flow of goods, services, and factors of production, and the other loop represents the corresponding flow of dollars.

Economists, like mathematicians, physicists, and biologists,

Economic models

All scientific models, including economic models, simplify reality in order to improve our understanding of it.

Figure 2-3 -Refer to Figure 2-3. What is the name of the model depicted in the figure?

Figure 2-17 -Refer to Figure 2-17. The slope of the curve between points A and B is

Figure 2-2 -Refer to Figure 2-2. If households are sellers in the markets represented by Box D of this circular-flow diagram, then

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?

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

An outcome is said to be efficient if an economy is conserving the largest possible quantity of its scarce resources while still meeting the basic needs of society.

Normative statements are not

When economists disagree about whether a policy is fair, they are expressing a difference in