Chapter 2 - Thinking Like an Economist

Graphs

________ provide an easy way of finding and interpreting patterns in data.

Issac Newtons

________ theory of gravity (not only applies to the apple falling to the earth, but to any two objects in the universe)

Paula

________ has an income of $ 20, 000 and is taxed $ 4, 000, or 20 percent of her income.

Firms

________ produce goods and services using inputs / [labor, land, capital (building and machines)/]

Macroeconomics

________: the study for economy- wide phenomena, including inflation, unemployment, and economic growth.

Normative statements

________- claims that attempt to prescribe how the world should be (prescriptive)

Positive statements

________- claims that attempt to describe the world as it is (descriptive)

Economists advice

________ is only the first step of any policy- making while offering their crucial input thats then passed onto other representatives for their opinions.

visual model

A(n) ________ of the economy that shows how dollars flow through markets among households and firms.

Production possibilities

________ frontier simplifies a complex economy to highlight the powerful basic ideas: scarcity, efficiency, trade- offs, opportunity cost, and economic growth.

Graphs

________ offer a way to visually express ideas that might be less clear if described with equations or words.