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Exam 2: Thinking Like an Economist

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Question 281

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Use the following Table to answer the question : Table 2-5 -Table 2-5 shows one set of production possibilities. Which of the following statements is correct?

A) The opportunity cost of a bushel of corn does not depend on how many bushels of wheat are being produced.
B) The opportunity cost of a bushel of corn increases as more corn is produced.
C) The opportunity cost of a bushel of corn decreases as more corn is produced.
D) The opportunity cost of a bushel of wheat decreases as more wheat is produced.

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

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Question 282

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Economic models

A) are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models.
B) are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models.
C) are simplifications of reality, and in this respect economic models are no different from other scientific models.
D) are simplifications of reality, and in this respect economic models are very different from other scientific models.

E) All of the above
F) None of the above

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Question 283

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When two variables have a positive correlation,

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

Use the following Figure to answer the question : Figure 2-8 : -Refer to Figure 2-8. Inefficient production is represented by which points?

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

A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output.

In the circular-flow diagram, which of the following items does not flow from firms to households?

Use the following Table to answer the question : Table 2-6 -Refer to Table 2-6. Consider the production possibilities table for an economy that produces only mobile phones and pizzas. Describe the shape of the production possibilities frontier.

Use the following Figure to answer the question : Figure 2-3 : -Refer to Figure 2-3. What do the inner arrows represent in the figure?

When economists make normative statements, they are

Which of the following is an example of a capital input?

Use the following Figure to answer the question : Figure 2-4 : -Refer to Figure 2-4. This economy has the ability to produce at which points) ?

The production possibilities frontier is a graph that shows the various combinations of outputs that the economy can possibly produce given the available factors of production and the available production technology.

Figure 2-10 Panel a) Panel b) -Refer to Figure 2-10, Panel a) . Production at point Y is

The slope of a line is equal to

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

The concept of slope can be used to answer questions about how much one variable responds to changes in another variable.

Use the following Figure to answer the question : Figure 2-18 Relationship between Price and Restaurant Meals -Refer to Figure 2-18. In the ordered pair 8, 24)

Use the following Table to answer the question : Table 2-5 -Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels?