Exam 2: Thinking Like an Economist: Part B

In the ordered pair (10,30),10 is the horizontal location of the point and 30 is the vertical location of the point.

Economists devise theories,collect data,and then analyze these data in an attempt to verify or refute their theories.

Economists may disagree about the validity of alternative positive theories about how the world works.

Points inside the production possibilities frontier represent inefficient levels of production.

Economists work both inside and outside the administrative branch of the U.S.government.

Figure 2-17​ -Refer to Figure 2-17.The opportunity cost of producing an additional pair of shoes increases as more shoes are produced.

The effects of borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist.

Economic models can help us understand reality only when they include all details of the economy.

In the circular-flow diagram,factors of production include land,labor,and capital.

In the circular-flow diagram,firms consume all the goods and services that they produce.

Points outside the production possibilities frontier represent infeasible levels of production.

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

When two variables move in the same direction,the curve relating them is downward sloping,and we say the variables are negatively related.

"Other things equal,an increase in supply causes a decrease in price" is a normative statement,not a positive statement.

Figure 2-14 -Refer to Figure 2-14.When this economy produces 30 doghouses and 25 dishwashers there is full employment.

Figure 2-17​ -Refer to Figure 2-17.Point B represents an inefficient outcome for this economy.

Since 1946,the president of the United States has received guidance from the Council of Economic Advisers.

Figure 2-14 -Refer to Figure 2-14.It is possible for this economy to produce 30 doghouses and 20 dishwashers.

In the markets for the factors of production in the circular-flow diagram,households are buyers and firms are sellers.

Economists at the U.S.Department of the Treasury help design U.S.coins and paper money.