Exam 2: Thinking Like an Economist

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

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

John Maynard Keynes believed the ideas of economists to be

Figure 2-21 -Refer to Figure 2-21. Your friend John created the graph above to illustrate that snowstorms are caused by more snowblowers being sold. You inform him that his interpretation is incorrect due to

Economists believe that production possibilities frontiers are often bowed because

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

The slope of a line that passes through the points (5, 8) and (12, 12) is

The Council of Economic Advisers' Economic Report of the President discusses recent developments in the economy and presents the council's analysis of current policy issues.

In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services?

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Economists make assumptions to

Figure 2-5 -Refer to Figure 2-5. It is possible for this economy to produce

Figure 2-12 -Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B?

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

Which of the following is the best explanation for why President Harry Truman once said that he wanted to find a one-armed economist?

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

Which markets are represented in the simple circular-flow diagram?

Which of the following statements best captures the relationship between microeconomics and macroeconomics?

The ordered pair that represents the origin on a graph is

Instead of conducting laboratory experiments to generate data to test their theories, economists often