Exam 2: Thinking Like an Economist: Part A

Economists at which administrative department help design tax policy?

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

Figure 2-15 -Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.The opportunity cost of one sofa is

What type of statement is a prescriptive statement about how the world ought to be?

When economists are trying to explain the world,they are scientists.When they are trying to improve it,they are

Economists at which administrative department help enforce the nation's antitrust laws?

The three main factors of production,or categories of inputs,used by firms to produce goods and services are

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two. -Refer to Figure 2-14.What is the opportunity cost of moving from point T to point R?

Is the following a positive or normative statement? The Federal Reserve should set an inflation target and employ policies to meet the target.

Most economists agree that a large federal budget deficit has what type of effect on the economy?

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two. -Refer to Figure 2-14.Which point(s)on the graph is(are)unattainable given current resources and technology?

Who would be more likely to study the effects of foreign competition on the accounting industry,a macroeconomist or a microeconomist?

Using the outline below,draw a circular-flow diagram representing the interactions between households and firms in a simple economy.Explain briefly the various parts of the diagram.

Who would be more likely to study the inflation rate in the United States,a macroeconomist or a microeconomist?

Figure 2-15 -Refer to Figure 2-15.Consider the production possibilities frontier for an economy that produces only sofas and cars.As the economy moves from point A to point D,is the opportunity cost of cars increasing,constant,or decreasing?

Which type of statement - positive or negative - can be evaluated by analyzing data alone?

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

Who would be more likely to study the effects of rent control on housing in New York City,a macroeconomist or a microeconomist?

Economists at which administrative department analyze data on workers and those looking for work to help formulate labor-market policies?

Figure 2-22 -Refer to Figure 2-22.How are price and quantity related in this graph?