Question 1

Which of the following best describes the relationship between positive and normative statements in economics?

Accepted Answer

A)  Positive and normative statements are alternate ways of describing the desirability of certain economic policies. 
B)  Normative statements evaluate the desirability of certain economic changes; positive statements do not. 
C)  Economists generally agree with each other regardless of whether a question is positive or normative. 
D)  Neither positive nor normative statements are concerned with the desirability of certain economic changes. 
E)  Normative statements are those with which all economists agree; positive statements may give rise to some disagreement. 
A)  Positive and normative statements are alternate ways of describing the desirability of certain economic policies. 
B)  Normative statements evaluate the desirability of certain economic changes; positive statements do not. 
C)  Economists generally agree with each other regardless of whether a question is positive or normative. 
D)  Neither positive nor normative statements are concerned with the desirability of certain economic changes. 
E)  Normative statements are those with which all economists agree; positive statements may give rise to some disagreement.

Question 2

FIGURE 2- 1
-Refer to Figure 2- 1. What is the slope of the line in part (ii) of the figure?

Accepted Answer

A)  12.5 
B)  0.08 
C)  0.05 
D)  1 
E)  - 12.5 
A)  12.5 
B)  0.08 
C)  0.05 
D)  1 
E)  - 12.5

Question 3

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

Accepted Answer

A)  variable. 
B)  prediction. 
C)  normative statement. 
D)  model. 
E)  assumption. 
A)  variable. 
B)  prediction. 
C)  normative statement. 
D)  model. 
E)  assumption.

Question 4

FIGURE 2- 4
-Refer to Figure 2- 4. The slope of the non- linear function changes as we move along the curve. The slope is

Accepted Answer

A)  negative and decreasing, indicating a diminishing marginal response. 
B)  constant at all points, indicating a constant marginal response. 
C)  negative and increasing, indicating an increasing marginal response. 
D)  positive and increasing, indicating an increasing marginal response. 
E)  positive and decreasing, indicating a diminishing marginal response. 
A)  negative and decreasing, indicating a diminishing marginal response. 
B)  constant at all points, indicating a constant marginal response. 
C)  negative and increasing, indicating an increasing marginal response. 
D)  positive and increasing, indicating an increasing marginal response. 
E)  positive and decreasing, indicating a diminishing marginal response.

Question 5

Which of the following pairs of words have similar meanings?

Accepted Answer

A)  induced and exogenous 
B)  dependent and exogenous 
C)  independent and exogenous 
D)  induced and autonomous 
E)  endogenous and autonomous 
A)  induced and exogenous 
B)  dependent and exogenous 
C)  independent and exogenous 
D)  induced and autonomous 
E)  endogenous and autonomous

Question 6

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Accepted Answer

A)  the unemployment rate in Toronto. 
B)  the number of fog days in Halifax. 
C)  the number of airline seats sold on this route. 
D)  the world price of oil. 
E)  the price of the same trip by train 
A)  the unemployment rate in Toronto. 
B)  the number of fog days in Halifax. 
C)  the number of airline seats sold on this route. 
D)  the world price of oil. 
E)  the price of the same trip by train

Question 7

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Accepted Answer

A)  a stock, as it influences the quantity of fish caught. 
B)  an endogenous variable, as it influences the price of fish. 
C)  an endogenous variable, as it is determined within the theory. 
D)  an exogenous variable, as it is determined outside the theory. 
E)  an act of God and, therefore, has no legitimate connection with the theory. 
A)  a stock, as it influences the quantity of fish caught. 
B)  an endogenous variable, as it influences the price of fish. 
C)  an endogenous variable, as it is determined within the theory. 
D)  an exogenous variable, as it is determined outside the theory. 
E)  an act of God and, therefore, has no legitimate connection with the theory.

Question 8

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

Accepted Answer

A)  60. 
B)  - 2.5. 
C)  - 40. 
D)  - 4.0. 
E)  4. 
A)  60. 
B)  - 2.5. 
C)  - 40. 
D)  - 4.0. 
E)  4.

Question 9

Suppose point A represents coordinates (X = 2, Y = 12) and point B represents coordinates (X = 6, Y
= 4). The slope of the straight line joining points A and B is

Accepted Answer

A)  - 2. 
B)  5. 
C)  2. 
D)  - 1 . 
E)  1 . 2 2 
A)  - 2. 
B)  5. 
C)  2. 
D)  - 1 . 
E)  1 . 2 2

Question 10

If the graph of a function is a horizontal line, the slope of this line is

Accepted Answer

A)  infinity. 
B)  undefined. 
C)  - 1. 
D)  0. 
E)  1. 
A)  infinity. 
B)  undefined. 
C)  - 1. 
D)  0. 
E)  1.

Question 11

The scientific approach to economic inquiry involves

Accepted Answer

A)  testing the predictions with empirical data. 
B)  choosing data that will support the predictions. 
C)  using only independent variables. 
D)  testing the reality of the assumptions of the model. 
E)  using only endogenous variables in economic models. 
A)  testing the predictions with empirical data. 
B)  choosing data that will support the predictions. 
C)  using only independent variables. 
D)  testing the reality of the assumptions of the model. 
E)  using only endogenous variables in economic models.

Question 12

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

Accepted Answer

A)  a scatter diagram with two variables 
B)  a cross- sectional graph with time- series data 
C)  a cross- sectional bar chart graph 
D)  a scatter diagram 
E)  a time series line graph 
A)  a scatter diagram with two variables 
B)  a cross- sectional graph with time- series data 
C)  a cross- sectional bar chart graph 
D)  a scatter diagram 
E)  a time series line graph

Question 13

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

Accepted Answer

A)  undefined. 
B)  negative and changing. 
C)  negative and constant. 
D)  positive and changing. 
E)  positive and constant. 
A)  undefined. 
B)  negative and changing. 
C)  negative and constant. 
D)  positive and changing. 
E)  positive and constant.

Question 14

If Y is an increasing function of X, then

Accepted Answer

A)  Y decreases when X increases. 
B)  X decreases when Y increases. 
C)  X remains constant as Y increases. 
D)  Y increases when X decreases. 
E)  Y increases when X increases. 
A)  Y decreases when X increases. 
B)  X decreases when Y increases. 
C)  X remains constant as Y increases. 
D)  Y increases when X decreases. 
E)  Y increases when X increases.

Question 15

FIGURE 2- 3
-Refer to Figure 2- 3. At X2 on curve A , the

Accepted Answer

A)  minimum occurs at Y4. 
B)  slope is increasing. 
C)  maximum occurs at Y1. 
D)  slope of the curve is zero. 
E)  slope is decreasing. 
A)  minimum occurs at Y4. 
B)  slope is increasing. 
C)  maximum occurs at Y1. 
D)  slope of the curve is zero. 
E)  slope is decreasing.

Question 16

An economic theory

Accepted Answer

A)  will be useful only if all human behaviour is rational. 
B)  will be useful as long as it is logically consistent. 
C)  is only useful if its underlying assumptions are realistic. 
D)  will predict more accurately if it contains a greater number of mathematical equations. 
E)  must be judged on its ability to explain and predict real- world phenomena. 
A)  will be useful only if all human behaviour is rational. 
B)  will be useful as long as it is logically consistent. 
C)  is only useful if its underlying assumptions are realistic. 
D)  will predict more accurately if it contains a greater number of mathematical equations. 
E)  must be judged on its ability to explain and predict real- world phenomena.

Question 17

Negatively related variables change such that as the value of one variable

Accepted Answer

A)  increases, the value of the other decreases. 
B)  decreases, the value of the other variable decreases. 
C)  decreases, the value of the other variable remains the same. 
D)  increases, the value of the other variable remains the same. 
E)  increases, the value of the other variable increases. 
A)  increases, the value of the other decreases. 
B)  decreases, the value of the other variable decreases. 
C)  decreases, the value of the other variable remains the same. 
D)  increases, the value of the other variable remains the same. 
E)  increases, the value of the other variable increases.

Question 18

When an increase in one variable is associated with an increase in a second variable, the two variables are

Accepted Answer

A)  inversely proportionally related. 
B)  equivalent. 
C)  proportionally related. 
D)  positively related. 
E)  negatively related. 
A)  inversely proportionally related. 
B)  equivalent. 
C)  proportionally related. 
D)  positively related. 
E)  negatively related.

Question 19

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

Accepted Answer

A)  60 
B)  3.0 
C)  0.1 
D)  - 20 
E)  20 
A)  60 
B)  3.0 
C)  0.1 
D)  - 20 
E)  20

Question 20

A valid theory

Accepted Answer

A)  extrapolates from the past behaviour of a variable to predict its future course. 
B)  generates a hypothesis that can predict future events. 
C)  appeals to the law of large numbers. 
D)  allows one to prove irrefutably one's hypothesis. 
E)  allows one to deduce a normative statement. 
A)  extrapolates from the past behaviour of a variable to predict its future course. 
B)  generates a hypothesis that can predict future events. 
C)  appeals to the law of large numbers. 
D)  allows one to prove irrefutably one's hypothesis. 
E)  allows one to deduce a normative statement.

Which of the following best describes the relationship between positive and normative statements in economics?

FIGURE 2- 1 -Refer to Figure 2- 1. What is the slope of the line in part (ii) of the figure?

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

FIGURE 2- 4 -Refer to Figure 2- 4. The slope of the non- linear function changes as we move along the curve. The slope is

Which of the following pairs of words have similar meanings?

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

Suppose point A represents coordinates (X = 2, Y = 12) and point B represents coordinates (X = 6, Y = 4). The slope of the straight line joining points A and B is

If the graph of a function is a horizontal line, the slope of this line is

The scientific approach to economic inquiry involves

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

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

If Y is an increasing function of X, then

FIGURE 2- 3 -Refer to Figure 2- 3. At X2 on curve A , the

An economic theory

Negatively related variables change such that as the value of one variable

When an increase in one variable is associated with an increase in a second variable, the two variables are

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

A valid theory

Economic Issues and Concepts

Demand, Supply, and Price

Elasticity

Markets in Action

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, Cartels, and Price Discrimination

Imperfect Competition

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Gains From International Trade

Trade Policy

Filters

Exam 2: Economic Theories, Data, and Graphs

Which of the following best describes the relationship between positive and normative statements in economics?

FIGURE 2- 1 -Refer to Figure 2- 1. What is the slope of the line in part (ii) of the figure?

The statement that a two- percent increase in the money supply leads to a two- percent increase in the price level is an example of a(n)

FIGURE 2- 4 -Refer to Figure 2- 4. The slope of the non- linear function changes as we move along the curve. The slope is

Which of the following pairs of words have similar meanings?

If we seek to explain the number of seats sold on a particular air route, say Toronto to Halifax, over a one- year period, we would consider many variables. Which of the following variables would be endogenous to our theory?

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

Consider the line which is the graph of the function Y = 60 - 4X. The slope of this line is

Suppose point A represents coordinates (X = 2, Y = 12) and point B represents coordinates (X = 6, Y = 4). The slope of the straight line joining points A and B is

If the graph of a function is a horizontal line, the slope of this line is

The scientific approach to economic inquiry involves

What is the best way to display the unemployment rate in each of the world's developed economies in 2009?

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

If Y is an increasing function of X, then

FIGURE 2- 3 -Refer to Figure 2- 3. At X2 on curve A , the

An economic theory

Negatively related variables change such that as the value of one variable

When an increase in one variable is associated with an increase in a second variable, the two variables are

On a coordinate graph, what is the Y intercept of the function X = 60 + 3Y?

A valid theory

Economic Issues and Concepts

Demand, Supply, and Price

Elasticity

Markets in Action

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, Cartels, and Price Discrimination

Imperfect Competition

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Gains From International Trade

Trade Policy

Filters