Question 1

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 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Explain why it is more difficult to determine causality in economics than in other sciences such as physics, chemistry, and biology.

Accepted Answer

Repeated, controlled experiments are oft

Question 6

The table shows the price of motor fuel (mainly gasoline) and the overall price level (the consumer price index) in five-year intervals over the period 1990 through 2015.

Accepted Answer

The answer of The table shows the price of motor...

Question 7

To see whether the price of gasoline has risen compared to the prices of other goods and services, one would calculate

Accepted Answer

A) gasoline spending divided by spending on all other goods and services. 
B) gasoline spending divided by total consumer spending. 
C) the trend in the price of gasoline. 
D) the price of gasoline divided by the overall price level. 
E) the price of gasoline divided by the rate of inflation. 
A) gasoline spending divided by spending on all other goods and services. 
B) gasoline spending divided by total consumer spending. 
C) the trend in the price of gasoline. 
D) the price of gasoline divided by the overall price level. 
E) the price of gasoline divided by the rate of inflation.

Question 8

If the price of gasoline decreases but not as much as the decrease in the average price of other goods and services, then the relative price of gasoline

Accepted Answer

A) cannot be determined. 
B) decreases. 
C) remains the same. 
D) increases. 
E) increases or decreases, depending on the price of automobiles. 
A) cannot be determined. 
B) decreases. 
C) remains the same. 
D) increases. 
E) increases or decreases, depending on the price of automobiles.

Question 9

Explain why there is the popular impression that economists seldom agree with each other.

Accepted Answer

First, even if 99 percent of the economi

Question 10

Suppose a curve shows that every time family income increases by $1, spending increases by $.80. If spending increases by $100, then income increased by

Accepted Answer

A) $8. 
B) $80. 
C) $100. 
D) $125. 
E) $12.5. 
A) $8. 
B) $80. 
C) $100. 
D) $125. 
E) $12.5.

Question 11

The table below shows the inflation rate for the period 2006 through 2016. Suppose you wanted to show that there was not much variation in the inflation rate over this period. How would you represent this table in a graph? Suppose you wanted to show that there was a large amount of variation during this period. How would you represent this table in a graph?

Accepted Answer

The figure below is drawn such that the

Question 12

Considering the role government plays, what term best describes the U.S. economy? Why?

Accepted Answer

The U.S. economy is a mixed ec

Question 13

All of the following are what economists commonly do except

Accepted Answer

A) describing economic events. 
B) explaining why economic events occur. 
C) predicting some economic events. 
D) finding ways to eliminate scarcity in resources. 
E) making recommendations for economic policy. 
A) describing economic events. 
B) explaining why economic events occur. 
C) predicting some economic events. 
D) finding ways to eliminate scarcity in resources. 
E) making recommendations for economic policy.

Question 14

Exhibit 2A-2  
-The slope of an inverse relationship

Accepted Answer

A) must be positive. 
B) is calculated by dividing the variable on the horizontal axis by the variable on the vertical axis. 
C) must be negative. 
D) can never be measured. 
E) must be constant everywhere along the curve. 
A) must be positive. 
B) is calculated by dividing the variable on the horizontal axis by the variable on the vertical axis. 
C) must be negative. 
D) can never be measured. 
E) must be constant everywhere along the curve.

Question 15

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 16

Positive economics is the

Accepted Answer

A) study of the desirable attributes of economic relationships. 
B) scientific study of "what is" among economic relationships. 
C) scientific study of how people behave positively. 
D) study of how economic policy should improve the welfare of individuals. 
E) study of how people and institutions should behave. 
A) study of the desirable attributes of economic relationships. 
B) scientific study of "what is" among economic relationships. 
C) scientific study of how people behave positively. 
D) study of how economic policy should improve the welfare of individuals. 
E) study of how people and institutions should behave.

Question 17

Which of the following is considered a macroeconomic question?

Accepted Answer

A) How to reduce costs in the healthcare industry? 
B) What is the impact of competition on the profits of Apple, the maker of iPhones? 
C) How can economic policy increase a nation's gross domestic product? 
D) How does a family allocate income among different types of goods and services? 
E) What factors determine the wage rate in the steel industry? 
A) How to reduce costs in the healthcare industry? 
B) What is the impact of competition on the profits of Apple, the maker of iPhones? 
C) How can economic policy increase a nation's gross domestic product? 
D) How does a family allocate income among different types of goods and services? 
E) What factors determine the wage rate in the steel industry?

Question 18

Positive economics

Accepted Answer

A) will usually indicate which economic policy is best. 
B) is concerned with what ought to be. 
C) is the same as normative economics. 
D) is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking. 
E) produces verifiable statements. 
A) will usually indicate which economic policy is best. 
B) is concerned with what ought to be. 
C) is the same as normative economics. 
D) is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking. 
E) produces verifiable statements.

Question 19

A newspaper editorial explaining what should be done to reduce the national debt is an example of

Accepted Answer

A) the ceteris paribus assumption. 
B) microeconomics. 
C) functional economics. 
D) positive economics. 
E) normative economics. 
A) the ceteris paribus assumption. 
B) microeconomics. 
C) functional economics. 
D) positive economics. 
E) normative economics.

Question 20

"Inflation is currently 2 percent in the United States." This statement is an example of

Accepted Answer

A) a positive statement. 
B) a normative statement. 
C) the fallacy of composition. 
D) macroeconomics. 
E) microeconomics. 
A) a positive statement. 
B) a normative statement. 
C) the fallacy of composition. 
D) macroeconomics. 
E) microeconomics.

Exam 2: Observing and Explaining the Economy

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

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

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

Explain why it is more difficult to determine causality in economics than in other sciences such as physics, chemistry, and biology.

The table shows the price of motor fuel (mainly gasoline) and the overall price level (the consumer price index) in five-year intervals over the period 1990 through 2015.

To see whether the price of gasoline has risen compared to the prices of other goods and services, one would calculate

If the price of gasoline decreases but not as much as the decrease in the average price of other goods and services, then the relative price of gasoline

Explain why there is the popular impression that economists seldom agree with each other.

Suppose a curve shows that every time family income increases by $1, spending increases by $.80. If spending increases by $100, then income increased by

Considering the role government plays, what term best describes the U.S. economy? Why?

All of the following are what economists commonly do except

Exhibit 2A-2 -The slope of an inverse relationship

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

Positive economics is the

Which of the following is considered a macroeconomic question?

Positive economics

A newspaper editorial explaining what should be done to reduce the national debt is an example of

"Inflation is currently 2 percent in the United States." This statement is an example of

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of 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

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

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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