Exam 1: The Scope and Method of Economics

An efficient economy is one that produces what consumers demand and does so at the least possible cost.

Normative economics seeks to understand behavior, but not make judgments.

Which of the following is a positive question?

Among the fundamental concepts in economics is

The concept of opportunity cost

Normative economics is an approach to economics that

Which of the following is an opportunity cost of attending college?

If your tuition is $2,000 this semester, your books cost $400, you can only work 10 rather than 40 hours per week during the 15 weeks you are taking classes and you make $12 per hour, and your room and board is $4,000 this semester (same as if not attending college), then your opportunity cost of attending college this semester is

Refer to Scenario 1.2 below to answer the question(s) that follow. SCENARIO 1.2: A scientist wants to understand the relationship between automobile emissions and the level of global warming. The scientist collects data on the volume of automobile emissions and the levels of global warming over time. The scientist concludes that a 1% increase in automobile emissions causes a 0.0003% increase in average global temperatures. From this information he concludes that the automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures. -Refer to Scenario 1.2. The statement, "automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures," is an example of

Temperature is a measure that changes from time to time and is therefore an example of a(n)

The slope of a curved line is constant.

To isolate the impact of one single factor, economists invoke the assumption of

Normative economics looks at outcomes of economic behavior and evaluates them as good or bad.

There is a high correlation between the number of automobiles on the road and the amount of carbon emissions in the atmosphere. This statement is best described as

The collection and use of data to test economic theories is called empirical economics.

Related to the Economics in Practice on page 4: According to the Economics in Practice, in terms of wages and job availability, those students graduating during a recession with a degree in economics are ________ those graduating with a degree in sociology.

The common way of expressing the efficient market concept is

________ market is characterized by the fact that profit opportunities are eliminated almost instantaneously.

Refer to the information provided in Figure 1.5 below to answer the question(s) that follow. Figure 1.5 -Refer to Figure 1.5. As income increases, consumption increases, but for each additional increase in income, consumption increases by a larger and larger amount. If consumption is graphed on the vertical axis and income is graphed on the horizontal axis, the relationship between consumption and income would look like which of the following Panels?

Refer to Scenario 1.2 below to answer the question(s) that follow. SCENARIO 1.2: A scientist wants to understand the relationship between automobile emissions and the level of global warming. The scientist collects data on the volume of automobile emissions and the levels of global warming over time. The scientist concludes that a 1% increase in automobile emissions causes a 0.0003% increase in average global temperatures. From this information he concludes that the automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures. -Refer to Scenario 1.2. The collection and use of the data on automobile emissions and global warming levels is an example of