Exam 2: Economic Theories, Data, and Graphs

Suppose that a particular theory predicts that on Monday, Wednesday, and Friday the stock market will rise and that on Tuesday and Thursday the stock market will fall. If an economist tests this theory and finds that over a six- month period the theory predicts accurately, the economist would likely say that the theory

The base year for an index number is

A theory

The table below shows hypothetical per- minute cell phone charges for "pay- and- talk" service over several years. 2005 0.55 2006 0.50 2007 0.40 2008 0.35 2009 0.25 TABLE 2- 2 -Refer to Table 2- 2. Assume that 2005 is used as the base year, with the index number = 100. What is the percentage change in the per- minute charge from 2008 to 2009?

Choose the statement that best describes how endogenous variables differ from exogenous variables.

When it is said that variable A depends on variable B, then A is

At the minimum or the maximum of the graph of a non- linear function (with x on the horizontal axis and y on the vertical axis) the slope of the curve is

Most economists believe that economics be made completely value- free, in part because it is to absolutely refute a theory on the basis of factual evidence.

FIGURE 2- 2 -Refer to Figure 2- 2. The slope of curve A is

Suppose a theory predicts that lowering tuition fees at Canadian universities will increase enrollment from low- income households. If empirical evidence consistently rejects this prediction, then we

Disagreements over positive statements

The statement that a country's rate of economic growth is influenced by its firms' investment behaviour is an example of a(n)

Choose the answer that best explains why economists build models that abstract from the complexities of reality.

FIGURE 2- 3 -Refer to Figure 2- 3. On curve A, the maximum value of Y occurs at

The mathematical expression of a relationship between two or more variables is usually known as

If a theory's prediction is tested and rejected,

A hypothesis (or a prediction) is a statement about

The use of statistics in economics is

The table below shows hypothetical tuition costs at a Canadian university. Year Tuition 2005 \ 5000 2006 \ 5050 2007 \ 5100 2008 \ 5150 2009 \ 5200 TABLE 2- 1 -Refer to Table 2- 1. The increase in tuition from 2005 to 2009 is:

As a science, economics is disadvantaged in that