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Chapter 2 Thinking Like an Economist




Question;71. Economists believe that production possibilities frontiers rarely;have a bowed shape.;72. A production possibilities frontier will be bowed outward if some;of the economy?s resources are better suited to producing one good than;another.;73. The trade-off between the production of one good and the production;of another good can change over time because of technological advances.;74. A technological advance in the production of the first good;increases the opportunity cost of the first good in terms of the second good.;75. While the production possibilities frontier is a useful model, it;cannot be used to illustrate economic growth.;76. Economic growth causes a production possibilities frontier to shift;outward.;77. If new government regulations designed to protect wetlands remove;very productive farmland from production, then the production possibilities;frontier will shift inward.;78. Production possibilities frontiers can be used to illustrate;scarcity, trade-offs, opportunity cost, efficiency, unemployment, technological;advances, and economic growth.;79. Microeconomics is the study of how households and firms make;decisions and how they interact in specific markets.;80. Macroeconomics is the study of economy-wide phenomena.;81. The effects of borrowing by the federal government would be studied;by a microeconomist rather than a macroeconomist.;82. The effects of foreign competition on the U.S. textile industry;would be studied by a microeconomist rather than a macroeconomist.


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