Exam 2: Thinking Like an Economist

The scientific method is the dispassionate development and testing of theories about how the world works.

Figure 2-7 -Refer to Figure 2-7. Efficient production is represented by which point(s)?

What you must give up to get something else is called the

Historical episodes allow economists to illustrate and evaluate current economic theories.

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?

The Federal Reserve

The language of economics is

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

Figure 2-3 -Refer to Figure 2-3. What does the arrow going from oval A to rectangle 2 represent in the figure?

Figure 2-4 -Refer to Figure 2-4. Inefficient production is represented by which point(s)?

Economists view positive statements as

Economists at which administrative department help enforce the nation's antitrust laws?

When two variables have a positive correlation,

On a bowed production possibilities frontier, as you move down along the curve

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?

An outcome is said to be efficient if an economy is getting all it can from the scarce resources it has available.

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

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Which of the following statements about the circular-flow diagram is correct?

If an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient.