Exam 2: Thinking Like an Economist

How do economists view positive statements?

What do good economic models do?

Which are terms used by an economist?

What do economists at the Canadian International Development Agency do?

Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 72 units of food and 28 machines. This year, it is producing 75 units of food and 30 machines. Which of the following would NOT explain the increase in output?

Figure 2-3 -Refer to Figure 2-3. Which point represents the maximum possible production of tubas?

Which of the following is NOT a problem associated with graphing in economics?

In economics, what does capital refer to?

What is meant by scientific method?

In the goods and services market, how do households and firms interact?

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?

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

Suppose there are two countries, Freedonia and Sylvania, which have identical amounts of resources, identical technologies, and identical populations. Both produce two types of goods, consumer goods and capital goods, and they both always operate on their production possibilities frontiers. The only difference is that this year Freedonia chooses to produce relatively more consumer goods than Sylvania. What will happen as a result?

Figure 2-10 -Refer to Figure 2-10. What is the slope of the curve between points A and B?

Figure 2-3 -Refer to Figure 2-3. Which point or points are inefficient?

Economists in which department help enforce antitrust laws?

Figure 2-2 -Refer to Figure 2-2. In which market are firms sellers?

Why are graphs such as bar graphs limited?

Which of the following is the most accurate statement about economic models?

According to a simple circular-flow diagram, in how many markets do households and firms interact?