Exam 2: Thinking Like an Economist

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

Figure 2-1 -Refer to Figure 2-1. Harvey receives his first paycheck for working as an ice cream vendor. To which of the arrows does this transaction directly contribute?

Figure 2-22 -Refer to Figure 2-22. Is a move from point A to point R considered a shift of the curve or a movement along the curve?

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

Positive statements are

A production possibilities frontier will be bowed outward if some of the economy's resources are better suited to producing one good than another.

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of income payments?

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

Economists regard events from the past as

Normative conclusions

A relatively flat demand curve indicates that

Figure 2-19 In the following graph the x-axis shows the number of times a commuter rail train stops at a station per hour and the y-axis shows the number of commuter rail passengers per hour. Commuter Rail Passengers by Frequency of Service -Refer to Figure 2-19. A policymaker observes this graph and concludes that increasing the frequency of commuter rail service is a certain way to get more commuters to choose the commuter rail instead of driving their own cars. You warn the policymaker about making a reverse causality mistake with which of the following statements?

Two variables that have a negative correlation move in opposite directions.

Which of the following is not correct?

Economists view positive statements as

Figure 2-4 -Refer to Figure 2-4. This economy has the ability to produce at which points)?

Figure 2-4 -Refer to Figure 2-4. Unemployment could cause this economy to produce at which points)?

Which of the following statements is are) correct?

If a line passes through the points 20,5) and 10,10), then the slope of the line is 1/2.

Figure 2-4 -Refer to Figure 2-4. Inefficient production is represented by which points)?