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Exam 2: Thinking Like an Economist

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Question 311

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

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Question 312

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If Martina's income increases and, as a result, she chooses to buy more lattés per month at each price, then her demand curve will

A) shift to the right.
B) shift to the left.
C) not shift; instead, Martina will move along her demand curve downward and to the right.
D) not shift; instead, Martina will move along her demand curve upward and to the left.

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Question 313

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According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher.

Different values are not a reason for disagreement among economists.

Figure 2-5 -Refer to Figure 2-5. It is not possible for this economy to produce at point

An economic model can accurately explain how the economy is organized because it is designed to include, to the extent possible, all features of the real world.

Which of the following steps does an economist take when studying the economy?

Economists at which of the following offices help formulate spending plans and regulatory policies?

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

A relatively steep demand curve indicates that

Table 2-5 -Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

In principle, we can

When income increases the slope of an individual's demand curve, the demand curve

In the circular-flow diagram,

In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called

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.

In the markets for goods and services in the circular flow diagram, households act as

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 points) on the graph isare) efficient production possibilities?

The slope of a line is equal to the change in the x-variable divided by the change in the y-variable.

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?