Exam 2: Thinking Like an Economist

Figure 2-5 -Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

Historical episodes are not valuable to economists.

Which of the following would likely be studied by a macroeconomist rather than a microeconomist?

Figure 2-3 -Refer to Figure 2-3. What do the outer arrows represent in the figure?

One way to characterize the difference between positive statements and normative statements is as follows:

Historical episodes are

Figure 2-16​ -Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce

The outer loop of the circular-flow diagram represents the flows of dollars in the economy. Which of the following does not appear on the outer loop?

The two basic reasons why economists often appear to give conflicting advice to policymakers are differences in

Economic growth causes a production possibilities frontier to shift outward.

Economic models are built with

Figure 2-1 -Refer to Figure 2-1. Which arrow represents the flow of spending by households?

The institution that sets the nation's monetary policy is called the

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

Economists view normative statements as

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.

When two variables have a negative correlation and the x-variable decreases,

The President receives economic policy advice from economists at each of the following except

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

Economists speaking like policy advisers make