Question 1

Exhibit 1A-7 Straight line relationship  
-According to Exhibit 1A-7, the relationship between annual income and air-travel expenditures is:

Accepted Answer

A)  direct. 
B)  inverse. 
C)  complex. 
D)  independent. 
A)  direct. 
B)  inverse. 
C)  complex. 
D)  independent.

Question 2

Exhibit 1A-5 Straight line  
-Straight line CD in Exhibit 1A-5 shows that:

Accepted Answer

A)  increasing values for X increases the value of Y. 
B)  decreasing values for X decreases the value of Y. 
C)  there is an inverse relationship between X and Y. 
D)  all of these. 
A)  increasing values for X increases the value of Y. 
B)  decreasing values for X decreases the value of Y. 
C)  there is an inverse relationship between X and Y. 
D)  all of these.

Question 3

The Ceteris paribus assumption is important when building economic models.

Accepted Answer

A) True 
 B)False

Question 4

A positive statement is:

Accepted Answer

A)  something good or desirable. 
B)  a call for improvement. 
C)  a statement of opinion. 
D)  a statement testable by facts. 
E)  a suggestion for policy. 
A)  something good or desirable. 
B)  a call for improvement. 
C)  a statement of opinion. 
D)  a statement testable by facts. 
E)  a suggestion for policy.

Question 5

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains should have been higher. The Secretary's statement is a (n) ____ economic statement, and the labor head's statement is a (n) ____ economic statement.

Accepted Answer

A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive 
E)  proper; improper 
A)  normative; normative 
B)  normative; positive 
C)  positive; normative 
D)  positive; positive 
E)  proper; improper

Question 6

Exhibit 1A-5 Straight line  
-In Exhibit 1A-5, the slope for straight line CD is:

Accepted Answer

A)  5. 
B)  1. 
C)  −1. 
D)  −5. 
A)  5. 
B)  1. 
C)  −1. 
D)  −5.

Question 7

Exhibit 1A-7 Straight line relationship  
-Which of the following would cause a shift in the relationship shown in Exhibit 1A-7?

Accepted Answer

A)  A rise in people's annual income. 
B)  A rise in people's expenditure on air travel. 
C)  A rise in the price of air travel. 
D)  All of these would shift the line in the graph. 
A)  A rise in people's annual income. 
B)  A rise in people's expenditure on air travel. 
C)  A rise in the price of air travel. 
D)  All of these would shift the line in the graph.

Question 8

A normative economic statement:

Accepted Answer

A)  is a model used to collect data. 
B)  is a statement of fact. 
C)  is a statement of what ought to be, not what is. 
D)  indicates what will occur if certain assumptions are true. 
A)  is a model used to collect data. 
B)  is a statement of fact. 
C)  is a statement of what ought to be, not what is. 
D)  indicates what will occur if certain assumptions are true.

Question 9

Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:

Accepted Answer

A)  profits will fall. 
B)  workers will earn 3/4 of GDP. 
C)  the rate of inflation increases. 
D)  all of these. 
A)  profits will fall. 
B)  workers will earn 3/4 of GDP. 
C)  the rate of inflation increases. 
D)  all of these.

Question 10

Exhibit 1A-8 Straight line relationship  
-What is the slope of the line shown in Exhibit 1A-8?

Accepted Answer

A)  −1. 
B)  −1/2. 
C)  −1/4. 
D)  0. 
A)  −1. 
B)  −1/2. 
C)  −1/4. 
D)  0.

Question 11

What is an economic theory or model? What constitutes a "good" economic theory or model?

Accepted Answer

An economic theory is a simplified versi

Exhibit 1A-7 Straight line relationship -According to Exhibit 1A-7, the relationship between annual income and air-travel expenditures is:

Exhibit 1A-5 Straight line -Straight line CD in Exhibit 1A-5 shows that:

The Ceteris paribus assumption is important when building economic models.

A positive statement is:

The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains should have been higher. The Secretary's statement is a (n) economic statement, and the labor head's statement is a (n) economic statement.

Exhibit 1A-5 Straight line -In Exhibit 1A-5, the slope for straight line CD is:

Exhibit 1A-7 Straight line relationship -Which of the following would cause a shift in the relationship shown in Exhibit 1A-7?

A normative economic statement:

Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:

Exhibit 1A-8 Straight line relationship -What is the slope of the line shown in Exhibit 1A-8?

What is an economic theory or model? What constitutes a "good" economic theory or model?

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 1: Introducing the Economic Way of Thinking

Exhibit 1A-7 Straight line relationship -According to Exhibit 1A-7, the relationship between annual income and air-travel expenditures is:

Exhibit 1A-5 Straight line -Straight line CD in Exhibit 1A-5 shows that:

The Ceteris paribus assumption is important when building economic models.

A positive statement is:

Exhibit 1A-5 Straight line -In Exhibit 1A-5, the slope for straight line CD is:

Exhibit 1A-7 Straight line relationship -Which of the following would cause a shift in the relationship shown in Exhibit 1A-7?

A normative economic statement:

Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:

Exhibit 1A-8 Straight line relationship -What is the slope of the line shown in Exhibit 1A-8?

What is an economic theory or model? What constitutes a "good" economic theory or model?

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters