Question 1

A laissez faire system is an economy with many government regulations.

Accepted Answer

A) True 
 B)False  False

Question 2

Economics was originally called

Accepted Answer

A)  political engineering. 
B)  political economy. 
C)  economic physics. 
D)  social engineering. 
E)  social physics. 
A)  political engineering. 
B)  political economy. 
C)  economic physics. 
D)  social engineering. 
E)  social physics. B

Question 3

Exhibit 2-3  
-Exhibit 2-3 shows two variables that are

Accepted Answer

A)  constant. 
B)  positively related. 
C)  negatively related. 
D)  not related. 
E)  both positively and negatively related. 
A)  constant. 
B)  positively related. 
C)  negatively related. 
D)  not related. 
E)  both positively and negatively related. B

Question 4

Identify whether the following statements are positive or normative economic statements, and explain why you categorized them in that way.

Accepted Answer

The answer of Identify whether the following statements are positive...

Question 5

To determine causality in many sciences, researchers

Accepted Answer

A)  check for correlation. 
B)  use scatter diagrams. 
C)  perform controlled experiments. 
D)  plot the variables against time or location. 
E)  use only a small amount of data. 
A)  check for correlation. 
B)  use scatter diagrams. 
C)  perform controlled experiments. 
D)  plot the variables against time or location. 
E)  use only a small amount of data.

Question 6

An economic variable is any economic measure that

Accepted Answer

A)  has different values because of researchers' different perspectives. 
B)  has no market value. 
C)  has a fixed value over time. 
D)  has no effect on the economy. 
E)  can vary over a range of values. 
A)  has different values because of researchers' different perspectives. 
B)  has no market value. 
C)  has a fixed value over time. 
D)  has no effect on the economy. 
E)  can vary over a range of values.

Question 7

Economists develop new models only when new economic data become available.

Accepted Answer

A) True 
 B)False

Question 8

The ceteris paribus assumption is used in economics

Accepted Answer

A)  because economic theory is an accurate reflection of the real world. 
B)  to isolate the important variables when formulating a theory. 
C)  primarily to identify unstable equilibrium situations. 
D)  to make the theory more complicated 
E)  to distinguish economics from other disciplines. 
A)  because economic theory is an accurate reflection of the real world. 
B)  to isolate the important variables when formulating a theory. 
C)  primarily to identify unstable equilibrium situations. 
D)  to make the theory more complicated 
E)  to distinguish economics from other disciplines.

Question 9

Which of the following is more of a microeconomic concept than a macroeconomic concept?

Accepted Answer

A)  Concern over simultaneous high rates of inflation and unemployment 
B)  Price determination in the resource market 
C)  The rate of economic growth 
D)  Concern over an entire economy's balance of payments 
E)  How the composition of output is determined in an economy 
A)  Concern over simultaneous high rates of inflation and unemployment 
B)  Price determination in the resource market 
C)  The rate of economic growth 
D)  Concern over an entire economy's balance of payments 
E)  How the composition of output is determined in an economy

Question 10

A major reason for the development of new models is

Accepted Answer

A)  because of asymmetric information. 
B)  that new observations cannot be explained by existing models. 
C)  that old economic laws are often repealed. 
D)  that human behavior is no longer important. 
E)  that new models are always easier to understand. 
A)  because of asymmetric information. 
B)  that new observations cannot be explained by existing models. 
C)  that old economic laws are often repealed. 
D)  that human behavior is no longer important. 
E)  that new models are always easier to understand.

Question 11

Economic models

Accepted Answer

A)  are different from the phenomena they attempt to explain. 
B)  are new phenomena because they are by-products of experimental economics. 
C)  are not complicated because the behavior they describe is not complicated. 
D)  are complicated because human behavior is complicated. 
E)  would not be needed if controlled experiments were used more often. 
A)  are different from the phenomena they attempt to explain. 
B)  are new phenomena because they are by-products of experimental economics. 
C)  are not complicated because the behavior they describe is not complicated. 
D)  are complicated because human behavior is complicated. 
E)  would not be needed if controlled experiments were used more often.

Question 12

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Accepted Answer

A)  a political system. 
B)  socialism. 
C)  a market system. 
D)  a laissez faire system. 
E)  a mixed economy. 
A)  a political system. 
B)  socialism. 
C)  a market system. 
D)  a laissez faire system. 
E)  a mixed economy.

Question 13

Suppose an economic study shows that increasing the tax rate on beer will reduce the amount of traffic accidents. Which of the following statements can be valid based on the study because they are positive statements, and which cannot be valid because they are normative statements.

Accepted Answer

The answer of Suppose an economic study shows that increasing...

Question 14

Most disagreements between economists occur because of different data sources.

Accepted Answer

A) True 
 B)False

Question 15

Macroeconomics deals with large industries such as the health-care industry.

Accepted Answer

A) True 
 B)False

Question 16

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Accepted Answer

A)  outdated models with new applications. 
B)  models that are not relevant to the health-care industry. 
C)  existing models that are useful for explaining observations. 
D)  models that are useful only for exposition in economics textbooks. 
E)  new models with old data. 
A)  outdated models with new applications. 
B)  models that are not relevant to the health-care industry. 
C)  existing models that are useful for explaining observations. 
D)  models that are useful only for exposition in economics textbooks. 
E)  new models with old data.

Question 17

Which of the following is a normative statement?

Accepted Answer

A)  "Income inequality in the United States has increased." 
B)  "The Federal Reserve has observed that the rate of inflation has been increasing." 
C)  "The government should increase the minimum wage to help low-income groups." 
D)  "Real wages in many cities have decreased over time." 
E)  "The relative price of gasoline has remained low in the past 30 years." 
A)  "Income inequality in the United States has increased." 
B)  "The Federal Reserve has observed that the rate of inflation has been increasing." 
C)  "The government should increase the minimum wage to help low-income groups." 
D)  "Real wages in many cities have decreased over time." 
E)  "The relative price of gasoline has remained low in the past 30 years."

Question 18

In describing the relationship between X and Y, the ceteris paribus assumption implies that

Accepted Answer

A)  the value of X does not change. 
B)  the value of Y does not change. 
C)  the values of both X and Y do not change. 
D)  all other factors that may affect X and Y are constant. 
E)  nothing in the world can change. 
A)  the value of X does not change. 
B)  the value of Y does not change. 
C)  the values of both X and Y do not change. 
D)  all other factors that may affect X and Y are constant. 
E)  nothing in the world can change.

Question 19

Economics is a study that

Accepted Answer

A)  is never relevant to people's lives. 
B)  cannot be enjoyed if economic models fail to explain the real world. 
C)  exists only to provide employment for economists. 
D)  can be enjoyed independent of its relevance to society. 
E)  can be enjoyed as long as its analysis is scientific. 
A)  is never relevant to people's lives. 
B)  cannot be enjoyed if economic models fail to explain the real world. 
C)  exists only to provide employment for economists. 
D)  can be enjoyed independent of its relevance to society. 
E)  can be enjoyed as long as its analysis is scientific.

Question 20

Explain why economics requires historical and philosophical skills in addition to analytical skills.

Accepted Answer

Some questions involve a direc

A laissez faire system is an economy with many government regulations.

Economics was originally called

Exhibit 2-3 -Exhibit 2-3 shows two variables that are

Identify whether the following statements are positive or normative economic statements, and explain why you categorized them in that way.

To determine causality in many sciences, researchers

An economic variable is any economic measure that

Economists develop new models only when new economic data become available.

The ceteris paribus assumption is used in economics

Which of the following is more of a microeconomic concept than a macroeconomic concept?

A major reason for the development of new models is

Economic models

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Suppose an economic study shows that increasing the tax rate on beer will reduce the amount of traffic accidents. Which of the following statements can be valid based on the study because they are positive statements, and which cannot be valid because they are normative statements.

Most disagreements between economists occur because of different data sources.

Macroeconomics deals with large industries such as the health-care industry.

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Which of the following is a normative statement?

In describing the relationship between X and Y, the ceteris paribus assumption implies that

Economics is a study that

Explain why economics requires historical and philosophical skills in addition to analytical skills.

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters

Exam 2: Observing and Explaining the Economy

A laissez faire system is an economy with many government regulations.

Economics was originally called

Exhibit 2-3 -Exhibit 2-3 shows two variables that are

Identify whether the following statements are positive or normative economic statements, and explain why you categorized them in that way.

To determine causality in many sciences, researchers

An economic variable is any economic measure that

Economists develop new models only when new economic data become available.

The ceteris paribus assumption is used in economics

Which of the following is more of a microeconomic concept than a macroeconomic concept?

A major reason for the development of new models is

Economic models

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Suppose an economic study shows that increasing the tax rate on beer will reduce the amount of traffic accidents. Which of the following statements can be valid based on the study because they are positive statements, and which cannot be valid because they are normative statements.

Most disagreements between economists occur because of different data sources.

Macroeconomics deals with large industries such as the health-care industry.

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Which of the following is a normative statement?

In describing the relationship between X and Y, the ceteris paribus assumption implies that

Economics is a study that

Explain why economics requires historical and philosophical skills in addition to analytical skills.

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters