Exam 2: Thinking Like an Economist

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. If this society is producing at point T,

In the simple circular flow diagram, the flow of money from the firms to the markets for factors of production is called

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Historical episodes are not valuable to economists.

Figure 2-3 -Refer to Figure 2-3. What are two elements not included in this figure that could be included in a more complex model?

In the circular-flow diagram, firms consume all the goods and services that they produce.

Duties of the Council of Economic Advisers include

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

A production possibilities frontier shifts outward when

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers.

When two variables have a negative correlation,

The bowed shape of the production possibilities frontier can be explained by the fact that

A normative economic statement such as "The minimum wage should be abolished"

Economists speaking like policy advisers make

Policymaking in a representative democracy

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

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology?

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

Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead.