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Exam 2: Thinking Like an Economist

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Question 191

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Which of the following trade-offs does the production possibilities frontier illustrate?

A) if an economy wants to increase efficiency in production,then it must sacrifice equality in consumption
B) once an economy has reached the efficient points on its production possibilities frontier,the only way of getting more of one good is to get less of the other
C) for an economy to consume more of one good,it must stop consuming the other good entirely
D) for an economy to produce and consume goods,it must sacrifice environmental quality

E) A) and B)
F) B) and C)

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Question 192

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The first number in any ordered pair is

A) the x-coordinate.
B) the y-coordinate.
C) the vertical location of the point.
D) the slope.

E) B) and D)
F) A) and D)

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Question 193

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An economy's production of two goods is efficient if

In the circular-flow diagram,another name for goods and services produced by firms is

Positive statements are descriptive,while normative statements are prescriptive.

In the circular-flow diagram,payments for labor,land,and capital flow from firms to households through the markets for the factors of production.

Which markets are represented in the simple circular-flow diagram?

A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another.

Figure 2-8 Panel (a) Panel (b) -Refer to Figure 2-8,Panel (a) .The opportunity cost of moving from point M to point L is

Figure 2-12 -Refer to Figure 2-12.Taking cause and effect into account,which of the following interpretations would be most reasonable regarding the relationship between coffee and hours without sleep?

Figure 2-1 -Refer to Figure 2-1.Enid completes her first week of employment working as a hairdresser at a salon.On Friday of that week,she receives her first paycheck.To which of the arrows does this transaction directly contribute?

In the simple circular-flow diagram,

Figure 2-14 -Refer to Figure 2-14.The opportunity cost of moving from point B to point D is 15 doghouses.

Figure 2-6 -Refer to Figure 2-6.What is the opportunity cost of moving from point A to point B?

Figure 2-8 Panel (a) Panel (b) -Refer to Figure 2-8,Panel (a) .Production is

Identify each of the following topics as being part of microeconomics or macroeconomics: a.the impact of a change in consumer income on the purchase of luxury automobiles b.the effect of a change in the price of Coke on the purchase of Pepsi c.the impact of a war in the Middle East on the rate of inflation in the United States d.factors influencing the rate of economic growth e. factors influencing the demand for tractors f. the impact of tax policy on national saving g. the effect of pollution taxes on the U.S.copper industry h. the degree of competition in the cable television industry i. the effect of a balanced-budget amendment on economic stability j. the impact of deregulation on the savings and loan industry

For economists,statements about the world are of two types:

Figure 2-13 -Refer to Figure 2-13.The curves shown are

In economics,graphs serve two purposes: they offer a way to visually express ideas,and they provide a way of finding and interpreting patterns when analyzing economic data.

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