Ch.2

Question 1

Two main roles of economists?

Answer 1

scientists & policy advisors

Question 2

Why do economists use models?

Answer 2

• to analyze economic events and government policies.
• to analyze real world issues.
• to represent how markets/the economy works
• how consumers/firms behave

Question 3

What do economists disagree on?

Answer 3

• different policy advice
• validity of alt positive theories about the world
• have differing values so therefore different normative views about what policy should try to accomplish.

Question 4

Economists, like mathematicians, physicists, and biologists..

Answer 4

• make use of the scientific method.
• try to address their subject with a scientist’s objectivity.
• devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Question 5

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

Answer 5

the available production technology

Question 6

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that..

Answer 6

the nation is not using all available resources or is using inferior technology or both.

Question 7

Any point on a country’s production possibilities frontier represents a combination of two goods that an economy..

Answer 7

can produce using all available resources and technology.

Question 8

A production possibilities frontier can shift outward if..

Answer 8

there is a technological improvement.