Exam 2: Thinking Like an Economist

Figure 2-8 -Refer to Figure 2-8. What would be an efficient combination of bathtubs and barrels?

In the simple circular-flow diagram, in which market are households sellers?

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

In the simple circular-flow diagram, in which market are firms sellers?

What did John Maynard Keynes believe the ideas of economists to be?

Why did George Bernard Shaw, among others, criticize economists?

Bill has noticed that increases in unemployment insurance claims are associated with recessions, and therefore advocates limits on unemployment insurance so as to prevent recessions. Martha has noticed that most drug addicts once attended schools, and therefore advocates getting rid of schools so as to prevent drug addiction. What do we know about the reasoning of Bill and Martha?

What do economists at the Canadian International Development Agency do?

What are the roles of economists when trying to explain or to improve the world?

What markets are depicted in the simple circular-flow diagram?

The country of Econoland produces two goods: textbooks and widgets. Last year, it produced 200 textbooks and 500 widgets. This year, it produced 250 textbooks and 600 widgets. Given no other information, which of the following could NOT explain the change?

What happens when a relevant variable that is not named on either axis changes?

An efficient outcome in economics is one in which the economy is conserving the largest possible amount of resources, while still meeting the needs of society.

Figure 2-8 -Refer to Figure 2-8. If this economy puts all of its resources into the production of bathtubs, how many could it produce?

Figure 2-10 -Refer to Figure 2-10 . What are the curves shown?

When economists are speaking as policy advisors, which statements are they more likely to use?

What is a type of graph that can be used to display the relationship between two variables?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of the factors of production?

Which statement best describes economic models?

Figure 2-8 -Refer to Figure 2-8. Which combination is NOT possible for this economy to produce?