1. Copyright © 2011 Cengage Learning 2 Thinking Like an Economist

2. 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

3. Figure 2 The Production Possibilities Frontier Production possibilities frontier A B C Quantity of cars produced 2,200 600 1,000 300 0 700 2,000 3,000 1,000 Quantity of computers produced D Copyright © 2011 Cengage Learning

4. Figure 3 A Shift in the Production Possibilities Frontier E Quantity of cars produced 2,000 700 2,100 750 0 4,000 3,000 1,000 Quantity of computers produced A Copyright © 2011 Cengage Learning

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

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

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

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

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

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

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

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

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

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

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