Exam 1: The Scope and Method of Economics

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4. Which of the curves or lines has a slope that is first positive and then negative?

Refer to Scenario 1.1 below to answer the questions that follow. SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. -Refer to Scenario 1.1. The statement that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment is an example of

If the slope of a straight line is -3. and if Y (the variable on the vertical axis) decreases by 6, then X (the variable on the horizontal axis) will

Which of the following is NOT listed in the book as a reason to study economics?

At a political rally, you stand up to see better. Everyone else stands up, as well. This is an example of

That which we forgo, or give up, when we make a choice or decision is called

If as the variable on the Y-axis falls the variable on the X-axis rises, the relationship between X and Y is said to be a negative relationship.

I have lived in a house on the Mississippi River for many years and have never seen a flood. Therefore, there is no reason for anyone to buy flood insurance. This statement is an example of

The slope of a horizontal line is

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3. If a 45 degree line were also graphed, the existing line shown on the graph would ________ it.

Normative economics is an approach to economics that

Refer to the information provided in Figure 1.3 below to answer the questions that follow. Figure 1.3 -Refer to Figure 1.3. The slope of the line is

Which of the following is an example of a normative statement?

The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units is

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

Which of the following is an example of a positive statement?

The aggregate price level is a topic of macroeconomics.

Stanley Jevons, an economist in the nineteenth century, noted a high correlation between economic prosperity and sunspots. Based on this observation he developed a "sunspot theory" of how the economy operated. We now know that Jevons

Dividing the change in quantity on the Y axis by the change in quantity on the X axis calculates the slope of a line.

Refer to Scenario 1.1 below to answer the questions that follow. SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. -Refer to Scenario 1.1. The statement, "the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers," is an example of