Exam 2: Thinking Like an Economist

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of obtaining 20 additional dryers by moving from point D to point A is

While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth.

Which of the following is not correct about most economic models?

Figure 2-2 -Refer to Figure 2-2. Boxes C and D of this circular-flow diagram represent

In the circular-flow diagram,

A macroeconomist - as opposed to a microeconomist - might study the effect of

When studying the effects of changes in public policy, economists believe that

Economists view normative statements as

Positive statements are

Figure 2-3 -Refer to Figure 2-3. Which of the following is an activity undertaken by the actors in rectangle 2?

In building economic models, economists often omit

Production is efficient if the economy is producing at a point

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

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

When economists are trying to explain the world, they are

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Just like models constructed in other areas of science, economic models

Which types of models are built with assumptions?

Which of the following is an example of a normative, as opposed to positive, statement?

Albert Einstein once made the following observation about science: