Exam 1: The Scope and Method of Economics

Graph the relationship between variables X and Y according to the table below:

Explain what a model is.

If crime rates in the United States fall, can incumbent lawmakers rightfully claim credit? Why or why not?

Define an efficient market.

What branch of economics involves the collection and use of data to test economic theories? Why is this task often more difficult in economics than it is in physical sciences?

Draw a graph showing a line with a positive slope. Draw a graph showing a line with a negative slope. Explain what the shape of these lines implies about the relationship between the variable on the x-axis and the variable on the y-axis?

Describe what is meant by the Cartesian coordinate system.

Define the term economics.

Explain what the fallacy of composition is and give an example.

Explain what post hoc fallacy means and give an example.

Assume that you have heard news that a local radio station is hosting a luncheon at your school by offering hot dogs, chips and cola at no expense to the student body. Why would economists say that this lunch is not truly free?

List the four criteria that are generally used to evaluate economic outcomes.

Explain how and why an all-volunteer army may actually be cheaper than an army staffed with drafted soldiers.

Explain the difference between economic growth and stability. Can a country experience both at the same time? Why or why not?

Michelle's Secretarial Services rents a copying machine for $50 per month plus a per copy charge of $0.10 per copy. Draw a diagram showing the relationship between the number of copies made and the firm's monthly copying bill. What is the slope of the line drawn? If the firm makes 5,000 copies in one month, what will be the bill for copying?

Create a time series graph with the data in the table below:

Give an example of a positive economic statement and a normative economic statement.

List three key reasons to study economics.

Explain what a graph is and how it can be used.

The following equation describes the relationship between the price of scanners (P) and the quantity that buyers will purchase each week (Q): Q = 300 - 2P. The following equation describes the relationship between the price of scanners (P) and the quantity that sellers will sell each week (Q): Q = 3P. On a graph (with Q on the horizontal axis and P on the vertical axis), plot the two equations using the following values for P: $30, $40, $50, $60, and $70. At what price do the two curves intersect? What is the quantity of scanners at this point?