Question 1

Models are also inherently unstable when they extend to

Accepted Answer

A)  long time periods. 
B)  short time periods. 
C)  no time periods. 
D)  micro periods of time. 
A)  long time periods. 
B)  short time periods. 
C)  no time periods. 
D)  micro periods of time. A

Question 2

The ultimate purpose of an economic model is to

Accepted Answer

A)  explain reality as completely as possible. 
B)  establish assumptions that closely resemble reality. 
C)  help us to understand economic behaviour. 
D)  guide government policy decisions. 
A)  explain reality as completely as possible. 
B)  establish assumptions that closely resemble reality. 
C)  help us to understand economic behaviour. 
D)  guide government policy decisions. C

Question 3

When an economist evaluates a positive statement, he or she is primarily

Accepted Answer

A)  examining evidence. 
B)  evaluating values as well as facts. 
C)  acting as a policy adviser. 
D)  concerned with making a sound decision on how the world ought to be. 
A)  examining evidence. 
B)  evaluating values as well as facts. 
C)  acting as a policy adviser. 
D)  concerned with making a sound decision on how the world ought to be. A

Question 4

Which of the following activities would occur in a market for goods and services?

Accepted Answer

A)  Harry mows his grass. 
B)  Peugeot hires additional workers to run a third shift at a car factory. 
C)  Jane bakes biscuits for her son's birthday party. 
D)  Ingrid buys a ticket to a football match. 
A)  Harry mows his grass. 
B)  Peugeot hires additional workers to run a third shift at a car factory. 
C)  Jane bakes biscuits for her son's birthday party. 
D)  Ingrid buys a ticket to a football match.

Question 5

Which of the following is not correct?

Accepted Answer

A)  Economists use some familiar words in specialized ways. 
B)  Economics has its own language and its own way of thinking, but few other fields of study do. 
C)  Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D)  The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live. 
A)  Economists use some familiar words in specialized ways. 
B)  Economics has its own language and its own way of thinking, but few other fields of study do. 
C)  Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D)  The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.

Question 6

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False

Question 7

History shows us that there have always been __________ among scientists about truth and reality.

Accepted Answer

A)  consistency. 
B)  uniformity. 
C)  agreements. 
D)  disagreements. 
A)  consistency. 
B)  uniformity. 
C)  agreements. 
D)  disagreements.

Question 8

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

Accepted Answer

A) True 
 B)False

Question 9

A normative economic statement such as "The minimum wage should be abolished"

Accepted Answer

A)  would likely be made by an economist acting as a scientist. 
B)  would require values and data in order to be evaluated. 
C)  would require data but not values in order to be evaluated. 
D)  could not be evaluated by economists acting as policy advisers. 
A)  would likely be made by an economist acting as a scientist. 
B)  would require values and data in order to be evaluated. 
C)  would require data but not values in order to be evaluated. 
D)  could not be evaluated by economists acting as policy advisers.

Question 10

Because economics is a science which is centred on _________, it is not always possible to conduct experiments in the same way in which as the physical sciences do.

Accepted Answer

A)  human behaviour. 
B)  consumer behaviour. 
C)  organizational behaviour. 
D)  conjoint analysis. 
A)  human behaviour. 
B)  consumer behaviour. 
C)  organizational behaviour. 
D)  conjoint analysis.

Question 11

Is it fair that people earning in excess of €150 000 a year should pay a much higher tax rate on income above this level? Explain your answer.

Accepted Answer

There is no one correct answer

Question 12

In building economic models, economists often omit

Accepted Answer

A)  assumptions. 
B)  theories. 
C)  details. 
D)  equations. 
A)  assumptions. 
B)  theories. 
C)  details. 
D)  equations.

Question 13

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A)  ask winners of the Nobel Prize in Economics to evaluate their theories. 
B)  argue that data is impossible to collect in economics. 
C)  gather data from historical episodes of economic change. 
D)  assume that data would support their theories. 
A)  ask winners of the Nobel Prize in Economics to evaluate their theories. 
B)  argue that data is impossible to collect in economics. 
C)  gather data from historical episodes of economic change. 
D)  assume that data would support their theories.

Question 14

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)  Income tax rates should not have been cut as they were a few years ago. 
B)  The quantity of money has grown too slowly in recent years. 
C)  When the quantity of money grows rapidly, inflation is a predictable consequence. 
D)  All of the above are positive statements. 
A)  Income tax rates should not have been cut as they were a few years ago. 
B)  The quantity of money has grown too slowly in recent years. 
C)  When the quantity of money grows rapidly, inflation is a predictable consequence. 
D)  All of the above are positive statements.

Question 16

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is most closely associated with positive economics?

Accepted Answer

A)  Determining the impact of government spending on the actual level of unemployment. 
B)  Determining the best level of immigration into a country. 
C)  Determining whether too many luxury goods are being produced. 
D)  Determining whether or not the government should reduce poverty. 
A)  Determining the impact of government spending on the actual level of unemployment. 
B)  Determining the best level of immigration into a country. 
C)  Determining whether too many luxury goods are being produced. 
D)  Determining whether or not the government should reduce poverty.

Question 18

A government minister states that wage rates in the country have risen by 2 per cent in the past year. The head of a trade union states that wage increases should have been higher. The Secretary's statement is a __________ economic statement, and the union leader's statement is a __________ economic statement.

Accepted Answer

A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive 
A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive

Question 19

If two variables tend to increase and decrease together, they are

Accepted Answer

A)  positively correlated. 
B)  negatively correlated. 
C)  uncorrelated. 
D)  quasi-correlated. 
A)  positively correlated. 
B)  negatively correlated. 
C)  uncorrelated. 
D)  quasi-correlated.

Question 20

An economic model

Accepted Answer

A)  uses equations to understand normative economic phenomena. 
B)  often omits crucial elements. 
C)  simplifies reality in order to focus on crucial elements. 
D)  cannot be proven wrong. 
A)  uses equations to understand normative economic phenomena. 
B)  often omits crucial elements. 
C)  simplifies reality in order to focus on crucial elements. 
D)  cannot be proven wrong.

Exam 2: Thinking Like an Economist

Models are also inherently unstable when they extend to

The ultimate purpose of an economic model is to

When an economist evaluates a positive statement, he or she is primarily

Which of the following activities would occur in a market for goods and services?

Which of the following is not correct?

Good assumptions simplify a problem without substantially affecting the answer.

History shows us that there have always been __________ among scientists about truth and reality.

Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

A normative economic statement such as "The minimum wage should be abolished"

Because economics is a science which is centred on _________, it is not always possible to conduct experiments in the same way in which as the physical sciences do.

Is it fair that people earning in excess of €150 000 a year should pay a much higher tax rate on income above this level? Explain your answer.

In building economic models, economists often omit

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Which of the following is an example of a positive, as opposed to normative, statement?

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers.

Which of the following is most closely associated with positive economics?

If two variables tend to increase and decrease together, they are

An economic model

What Is Economics

The Market Forces of Supply and Demand

Elasticity and Its Applications

Background to Demand: Consumer Choices

Background to Supply: Firms in Competitive Markets

Consumers, Producers and the Efficiency of Markets

Supply, Demand and Government Policies

The Tax System

Public Goods, Common Resources and Merit Goods

Market Failure and Externalities

Information and Behavioural Economics

Firms Production Decisions

Market Structures I: Monopoly

Market Structures Ii: Monopolistic Competition

Market Structures Iii: Oligopoly

The Economics of Factor Markets

Income Inequality and Poverty

Interdependence and the Gains From Trade

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

Issues in Financial Markets

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Supply-Side Policies

Common Currency Areas and European Monetary Union

The Financial Crisis and Sovereign Debt

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