Question 1

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.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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.

Question 4

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.

Question 5

Describe an experiment that you would run to see how market prices are determined. Also be sure to explain where the ceteris paribus assumption is needed.

Accepted Answer

I would run an experiment by dividing a

Question 6

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 7

What is the difference between microeconomics and macroeconomics?

Accepted Answer

Microeconomics studies the behavior of i

Question 8

In modern market economies, the role of government is small.

Accepted Answer

A) True 
 B)False

Question 9

A good explanation for why people believe economists always disagree is that

Accepted Answer

A)  economics is not a science. 
B)  this is the impression economists want the public to have of them. 
C)  with so many economists, it is always possible to find an economist with a different viewpoint. 
D)  economics is an inexact science. 
E)  economists are trained to argue with others. 
A)  economics is not a science. 
B)  this is the impression economists want the public to have of them. 
C)  with so many economists, it is always possible to find an economist with a different viewpoint. 
D)  economics is an inexact science. 
E)  economists are trained to argue with others.

Question 10

Two variables are negatively correlated if

Accepted Answer

A)  the value of one variable decreases as the value of the other variable decreases. 
B)  the value of one variable increases as the value of the other variable decreases. 
C)  a fall in one variable only causes another variable to fall. 
D)  changes in one have no effect on the other. 
E)  the value of one variable remains constant as the value of another variable changes. 
A)  the value of one variable decreases as the value of the other variable decreases. 
B)  the value of one variable increases as the value of the other variable decreases. 
C)  a fall in one variable only causes another variable to fall. 
D)  changes in one have no effect on the other. 
E)  the value of one variable remains constant as the value of another variable changes.

Question 11

Because economists have varying moral beliefs and different views of the world,

Accepted Answer

A)  it is impossible for there to be anything scientific about economics. 
B)  they will disagree on abstract issues. 
C)  there are many different types of economic theories. 
D)  they will agree more often than not on principles when discussed at an abstract level, but they will disagree on whether to apply these principles in real-world circumstances. 
E)  economics can never be a science. 
A)  it is impossible for there to be anything scientific about economics. 
B)  they will disagree on abstract issues. 
C)  there are many different types of economic theories. 
D)  they will agree more often than not on principles when discussed at an abstract level, but they will disagree on whether to apply these principles in real-world circumstances. 
E)  economics can never be a science.

Question 12

Interpret the following data on the relative price of cellphones and answer the following questions.   (A)Calculate the relative price of cellphones for each year.
(B)Plot the relative price of cellphones.
(C)What can you say about how the price of cellphones varied in comparison to the price of all goods between 2005 and 2008?

Accepted Answer

(A)The relative price of cellphones for

Question 13

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 14

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 15

Indicate whether you expect positive or negative correlation for the following pairs of variables. For each pair, state whether causation exists.
(A)The use of sunglasses and the number of sunny days.
(B)The number of movie rentals and the number of cable subscriptions.
(C)Purchases of candy and purchases of Valentine's Day cards.

Accepted Answer

(A)Positive correlation. The number of s

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Economic analysis

Accepted Answer

A)  requires few verbal skills. 
B)  requires both quantitative and analytical skills. 
C)  is based solely on analytical models. 
D)  has little use for a historical or philosophical background. 
E)  has little use for mathematics. 
A)  requires few verbal skills. 
B)  requires both quantitative and analytical skills. 
C)  is based solely on analytical models. 
D)  has little use for a historical or philosophical background. 
E)  has little use for mathematics.

Question 18

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 19

Ceteris paribus means

Accepted Answer

A)  that rational self-interest is being assumed. 
B)  "all variables are independent." 
C)  that no other assumptions are being made. 
D)  "other things being equal." 
E)  "all relationships are inverse." 
A)  that rational self-interest is being assumed. 
B)  "all variables are independent." 
C)  that no other assumptions are being made. 
D)  "other things being equal." 
E)  "all relationships are inverse."

Question 20

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

Exam 2: Observing and Explaining the Economy

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

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

Economics was originally called

Macroeconomics is concerned primarily with

Describe an experiment that you would run to see how market prices are determined. Also be sure to explain where the ceteris paribus assumption is needed.

Economic models

What is the difference between microeconomics and macroeconomics?

In modern market economies, the role of government is small.

A good explanation for why people believe economists always disagree is that

Two variables are negatively correlated if

Because economists have varying moral beliefs and different views of the world,

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

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

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

Economic analysis

The relative price of an iPad is

Ceteris paribus means

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

The Central Idea

The Supply and Demand Model

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

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Capital and Financial Markets

Economic Growth and Globalization

International Trade

International Finance

Reading, Understanding, and Creating Graphs

the Miracle of Compound Growth

Present Discounted Value

Deriving the Growth Accounting Formula

Filters