Question 1

What is the difference between correlation and causality?

Accepted Answer

Correlation means that one eve

Question 2

Explaining why the total amount of miles traveled in vehicles have risen in recent years is one example of what economists do.

Accepted Answer

A) True 
 B)False

Question 3

Using gasoline prices as an example, explain what a normative statement is and what a positive statement is.

Accepted Answer

Valid positive statements would include

Question 4

Explain how the distinction between positive and normative economics provides insight as to why economists do disagree.

Accepted Answer

In the abstract, economists are often in

Question 5

Economics requires more of a mixture of verbal and quantitative skills than other sciences.

Accepted Answer

A) True 
 B)False

Question 6

A model gives the most realistic description of the real world.

Accepted Answer

A) True 
 B)False

Question 7

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Accepted Answer

A) True 
 B)False

Question 8

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.

Accepted Answer

The answer of Suppose you decide to build a model...

Question 9

When economists do disagree, the disagreement usually pertains to

Accepted Answer

A)  positive issues. 
B)  normative issues. 
C)  theoretical issues. 
D)  minor issues. 
E)  just about any economic topic. 
A)  positive issues. 
B)  normative issues. 
C)  theoretical issues. 
D)  minor issues. 
E)  just about any economic topic.

Question 10

The category of economics that contains statements about what ought to be is known as

Accepted Answer

A)  objective economics. 
B)  positive economics. 
C)  normative economics. 
D)  microeconomics. 
E)  macroeconomics. 
A)  objective economics. 
B)  positive economics. 
C)  normative economics. 
D)  microeconomics. 
E)  macroeconomics.

Question 11

If two variables are correlated, then it must be true that one of the variables causes the other.

Accepted Answer

A) True 
 B)False

Question 12

Two variables are correlated if

Accepted Answer

A)  they both move up or down at about the same time. 
B)  an increase in one variable only causes another variable to increase. 
C)  a fall in one variable only causes another variable to fall. 
D)  changes in one have no effect on the other. 
E)  changes in one variable do not cause changes in the other. 
A)  they both move up or down at about the same time. 
B)  an increase in one variable only causes another variable to increase. 
C)  a fall in one variable only causes another variable to fall. 
D)  changes in one have no effect on the other. 
E)  changes in one variable do not cause changes in the other.

Question 13

What problems would arise if economists did not make ceteris paribus assumptions when making predictions?

Accepted Answer

Without making ceteris paribus

Question 14

Indicate whether you expect positive or negative correlation for the following pairs of variables. For each pair, state whether causation exists.

Accepted Answer

The answer of Indicate whether you expect positive or negative...

Question 15

Those who support a laissez faire system

Accepted Answer

A)  argue for a French-style economy. 
B)  argue for a market economy. 
C)  support government intervention. 
D)  argue for a command economy. 
E)  argue for a mixed economy. 
A)  argue for a French-style economy. 
B)  argue for a market economy. 
C)  support government intervention. 
D)  argue for a command economy. 
E)  argue for a mixed economy.

Question 16

In order to determine a causation between a change in the price of iPads and the amount of iPads purchased by customers, an economist must show that

Accepted Answer

A)  there is no correlation between the price of iPads and the quantity of iPads purchased. 
B)  the change in the quantity of iPads purchased occurs after the change in the price of iPads. 
C)  the change in the price of iPads occurs along with the change in the quantity of iPads purchased. 
D)  the changes in the price and quantity of iPads purchased always move in the same direction. 
E)  the change in the price of iPads brings about the change in the quantity of iPads purchased. 
A)  there is no correlation between the price of iPads and the quantity of iPads purchased. 
B)  the change in the quantity of iPads purchased occurs after the change in the price of iPads. 
C)  the change in the price of iPads occurs along with the change in the quantity of iPads purchased. 
D)  the changes in the price and quantity of iPads purchased always move in the same direction. 
E)  the change in the price of iPads brings about the change in the quantity of iPads purchased.

Question 17

The relative price of an iPad is

Accepted Answer

A)  the actual price that a consumer pays for the iPad. 
B)  the actual price that the seller received for the iPad. 
C)  the actual price of the iPad compared with its suggested retail price. 
D)  the price of the iPad compared with the average price of all goods and services. 
E)  zero if it is a used iPad. 
A)  the actual price that a consumer pays for the iPad. 
B)  the actual price that the seller received for the iPad. 
C)  the actual price of the iPad compared with its suggested retail price. 
D)  the price of the iPad compared with the average price of all goods and services. 
E)  zero if it is a used iPad.

Question 18

Which of the following is not an economic issue?

Accepted Answer

A)  Why is college tuition so high? 
B)  Why has health-care spending increased faster than the rest of the economy? 
C)  How can one earn $1 million without working at all? 
D)  How can one reduce the currently high levels of unemployment in Europe? 
E)  Why are there so many types of dog food? 
A)  Why is college tuition so high? 
B)  Why has health-care spending increased faster than the rest of the economy? 
C)  How can one earn $1 million without working at all? 
D)  How can one reduce the currently high levels of unemployment in Europe? 
E)  Why are there so many types of dog food?

Question 19

Knowledge of economics will help you make better decisions about education, employment, and investments.

Accepted Answer

A) True 
 B)False

Question 20

Macroeconomics is concerned primarily with

Accepted Answer

A)  the economy as a whole. 
B)  the operation of a particular firm. 
C)  individual consumer behavior. 
D)  the labor market. 
E)  a detailed examination of how price and output decisions are made in specific markets. 
A)  the economy as a whole. 
B)  the operation of a particular firm. 
C)  individual consumer behavior. 
D)  the labor market. 
E)  a detailed examination of how price and output decisions are made in specific markets.

What is the difference between correlation and causality?

Explaining why the total amount of miles traveled in vehicles have risen in recent years is one example of what economists do.

Using gasoline prices as an example, explain what a normative statement is and what a positive statement is.

Explain how the distinction between positive and normative economics provides insight as to why economists do disagree.

Economics requires more of a mixture of verbal and quantitative skills than other sciences.

A model gives the most realistic description of the real world.

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.

When economists do disagree, the disagreement usually pertains to

The category of economics that contains statements about what ought to be is known as

If two variables are correlated, then it must be true that one of the variables causes the other.

Two variables are correlated if

What problems would arise if economists did not make ceteris paribus assumptions when making predictions?

Indicate whether you expect positive or negative correlation for the following pairs of variables. For each pair, state whether causation exists.

Those who support a laissez faire system

In order to determine a causation between a change in the price of iPads and the amount of iPads purchased by customers, an economist must show that

The relative price of an iPad is

Which of the following is not an economic issue?

Knowledge of economics will help you make better decisions about education, employment, and investments.

Macroeconomics is concerned primarily with

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

What is the difference between correlation and causality?

Explaining why the total amount of miles traveled in vehicles have risen in recent years is one example of what economists do.

Using gasoline prices as an example, explain what a normative statement is and what a positive statement is.

Explain how the distinction between positive and normative economics provides insight as to why economists do disagree.

Economics requires more of a mixture of verbal and quantitative skills than other sciences.

A model gives the most realistic description of the real world.

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.

When economists do disagree, the disagreement usually pertains to

The category of economics that contains statements about what ought to be is known as

If two variables are correlated, then it must be true that one of the variables causes the other.

Two variables are correlated if

What problems would arise if economists did not make ceteris paribus assumptions when making predictions?

Indicate whether you expect positive or negative correlation for the following pairs of variables. For each pair, state whether causation exists.

Those who support a laissez faire system

In order to determine a causation between a change in the price of iPads and the amount of iPads purchased by customers, an economist must show that

The relative price of an iPad is

Which of the following is not an economic issue?

Knowledge of economics will help you make better decisions about education, employment, and investments.

Macroeconomics is concerned primarily with

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