Copyright © 2011 Cengage Learning 2 Thinking Like an Economist.

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Copyright © 2011 Cengage Learning 2 Thinking Like an Economist

Figure 1 The Circular Flow Spending Goods and services bought Revenue Goods and services sold Labour, land, and capital Income = Flow of inputs and outputs = Flow of euros Factors of production Wages, rent, and profit FIRMS Produce and sell goods and services Hire and use factors of production Buy and consume goods and services Own and sell factors of production HOUSEHOLDS Households sell Firms buy MARKETS FOR FACTORS OF PRODUCTION Firms sell Households buy MARKETS FOR GOODS AND SERVICES Copyright © 2011 Cengage Learning

Figure 2 The Production Possibilities Frontier Production possibilities frontier A B C Quantity of cars produced 2, , ,000 3,000 1,000 Quantity of computers produced D Copyright © 2011 Cengage Learning

Figure 3 A Shift in the Production Possibilities Frontier E Quantity of cars produced 2, , ,000 3,000 1,000 Quantity of computers produced A Copyright © 2011 Cengage Learning

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Table 1 Websites

Table 2 Ten Propositions about Which Most Economists Agree Copyright © 2011 Cengage Learning

Copyright © 2010 Cengage Learning Table 3 What Economists Know Copyright © 2011 Cengage Learning

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.1 Types of Graph

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.2 Using the Coordinate System

Copyright © 2010 Cengage Learning Table 2 Ten Propositions about Which Most Economists Agree Table 2A.1 Novels Purchased by Pascale Copyright © 2011 Cengage Learning

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.3 Demand Curve

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.4 Shifting Demand Curves

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.5 Calculating the Slope of a Line

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.6 Graph With an Omitted Variable

Copyright © 2010 Cengage Learning Copyright © 2011 Cengage Learning Figure 2A.7 Graph Suggesting Reverse Causality

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