Question 1

The relative price of an iPad is

Accepted Answer

A) the actual price that a consumer pays for the iPad. 
B) the actual price that the seller received for the iPad. 
C) the actual price of the iPad compared with its suggested retail price. 
D) the price of the iPad compared with the average price of all goods and services. 
E) zero if it is a used iPad. 
A) the actual price that a consumer pays for the iPad. 
B) the actual price that the seller received for the iPad. 
C) the actual price of the iPad compared with its suggested retail price. 
D) the price of the iPad compared with the average price of all goods and services. 
E) zero if it is a used iPad.

Question 2

Because economists have varying moral beliefs and different views of the world,

Accepted Answer

A) it is impossible for there to be anything scientific about economics. 
B) they will disagree on abstract issues. 
C) there are many different types of economic theories. 
D) they will agree more often than not on principles when discussed at an abstract level,but they will disagree on whether to apply these principles in real-world circumstances. 
E) economics can never be a science. 
A) it is impossible for there to be anything scientific about economics. 
B) they will disagree on abstract issues. 
C) there are many different types of economic theories. 
D) they will agree more often than not on principles when discussed at an abstract level,but they will disagree on whether to apply these principles in real-world circumstances. 
E) economics can never be a science.

Question 3

A model gives the most realistic description of the real world.

Accepted Answer

A) True 
 B)False

Question 4

Economics was originally called

Accepted Answer

A) political engineering. 
B) political economy. 
C) economic physics. 
D) social engineering. 
E) social physics. 
A) political engineering. 
B) political economy. 
C) economic physics. 
D) social engineering. 
E) social physics.

Question 5

When people survey economists' beliefs,they find

Accepted Answer

A) a surprising amount of agreement. 
B) that economists act as if they are not human. 
C) that economists lack moral beliefs. 
D) that,for every economist,they get two different answers. 
E) more disagreement than expected. 
A) a surprising amount of agreement. 
B) that economists act as if they are not human. 
C) that economists lack moral beliefs. 
D) that,for every economist,they get two different answers. 
E) more disagreement than expected.

Question 6

Economic analysis

Accepted Answer

A) requires few verbal skills. 
B) requires both quantitative and analytical skills. 
C) is based solely on analytical models. 
D) has little use for a historical or philosophical background. 
E) has little use for mathematics. 
A) requires few verbal skills. 
B) requires both quantitative and analytical skills. 
C) is based solely on analytical models. 
D) has little use for a historical or philosophical background. 
E) has little use for mathematics.

Question 7

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system,which is called

Accepted Answer

A) a political system. 
B) socialism. 
C) a market system. 
D) a laissez faire system. 
E) a mixed economy. 
A) a political system. 
B) socialism. 
C) a market system. 
D) a laissez faire system. 
E) a mixed economy.

Question 8

Economic models

Accepted Answer

A) are different from the phenomena they attempt to explain. 
B) are new phenomena because they are by-products of experimental economics. 
C) are not complicated because the behavior they describe is not complicated. 
D) are complicated because human behavior is complicated. 
E) would not be needed if controlled experiments were used more often. 
A) are different from the phenomena they attempt to explain. 
B) are new phenomena because they are by-products of experimental economics. 
C) are not complicated because the behavior they describe is not complicated. 
D) are complicated because human behavior is complicated. 
E) would not be needed if controlled experiments were used more often.

Question 9

A laissez faire system is an economy with many government regulations.

Accepted Answer

A) True 
 B)False

Question 10

Describe an experiment that you would run to see how market prices are determined.Also be sure to explain where the ceteris paribus assumption is needed.

Accepted Answer

I would run an experiment by dividing a

Question 11

Explain how the distinction between positive and normative economics provides insight as to why economists do disagree.

Accepted Answer

In the abstract,economists are often in

Question 12

Explain how new models or theories are developed in economics.

Accepted Answer

First,a hypothesis based on this new mod

Question 13

Economics has always been a good example of an experimental science.

Accepted Answer

A) True 
 B)False

Question 14

Positive economics

Accepted Answer

A) will usually indicate which economic policy is best. 
B) is concerned with what ought to be. 
C) is the same as normative economics. 
D) is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking. 
E) produces verifiable statements. 
A) will usually indicate which economic policy is best. 
B) is concerned with what ought to be. 
C) is the same as normative economics. 
D) is strictly quantitative and so has little to say to those with philosophical goals to achieve in policymaking. 
E) produces verifiable statements.

Question 15

The ceteris paribus assumption is used in economics

Accepted Answer

A) because economic theory is an accurate reflection of the real world. 
B) to isolate the important variables when formulating a theory. 
C) primarily to identify unstable equilibrium situations. 
D) to make the theory more complicated 
E) to distinguish economics from other disciplines. 
A) because economic theory is an accurate reflection of the real world. 
B) to isolate the important variables when formulating a theory. 
C) primarily to identify unstable equilibrium situations. 
D) to make the theory more complicated 
E) to distinguish economics from other disciplines.

Question 16

All of the following are examples of an economic variable except

Accepted Answer

A) the amount of income tax that a household has to pay. 
B) a person's income. 
C) the price of gasoline. 
D) an integer 24. 
E) the number of unemployed people. 
A) the amount of income tax that a household has to pay. 
B) a person's income. 
C) the price of gasoline. 
D) an integer 24. 
E) the number of unemployed people.

Question 17

A market economy in which the government plays some role is called

Accepted Answer

A) capitalism. 
B) socialism. 
C) communism. 
D) a laissez faire system. 
E) a mixed economy. 
A) capitalism. 
B) socialism. 
C) communism. 
D) a laissez faire system. 
E) a mixed economy.

Question 18

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.
(A)What data would you collect?
(B)What variable do you believe would supply the major part of the explanation of the variation in profits?
(C)If you graph the data with profits on the vertical axis and your explanatory variable on the horizontal axis,will the relationship be upward sloping or downward sloping?
(D)What does your answer in part (C)imply for whether the data on profits and the data on your explanatory variable are positively or negatively correlated?

Accepted Answer

(A) I would collect data on company prof

Question 19

If the price of gasoline decreases but not as much as the decrease in the average price of other goods and services,then the relative price of gasoline

Accepted Answer

A) cannot be determined. 
B) decreases. 
C) remains the same. 
D) increases. 
E) increases or decreases,depending on the price of automobiles. 
A) cannot be determined. 
B) decreases. 
C) remains the same. 
D) increases. 
E) increases or decreases,depending on the price of automobiles.

Question 20

Ceteris paribus means

Accepted Answer

A) that rational self-interest is being assumed. 
B) "all variables are independent." 
C) that no other assumptions are being made. 
D) "other things being equal." 
E) "all relationships are inverse." 
A) that rational self-interest is being assumed. 
B) "all variables are independent." 
C) that no other assumptions are being made. 
D) "other things being equal." 
E) "all relationships are inverse."

Exam 2: Observing and Explaining the Economy

The relative price of an iPad is

Because economists have varying moral beliefs and different views of the world,

A model gives the most realistic description of the real world.

Economics was originally called

When people survey economists' beliefs,they find

Economic analysis

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system,which is called

Economic models

A laissez faire system is an economy with many government regulations.

Describe an experiment that you would run to see how market prices are determined.Also be sure to explain where the ceteris paribus assumption is needed.

Explain how the distinction between positive and normative economics provides insight as to why economists do disagree.

Explain how new models or theories are developed in economics.

Economics has always been a good example of an experimental science.

Positive economics

The ceteris paribus assumption is used in economics

All of the following are examples of an economic variable except

A market economy in which the government plays some role is called

If the price of gasoline decreases but not as much as the decrease in the average price of other goods and services,then the relative price of gasoline

Ceteris paribus means

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, transfers, and Income Distribution

Public Goods, externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth and Globalization

International Trade

International Finance

Reading,understanding,and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Present Discounted Value

The Miracle of Compound Growth

Deriving the Growth Accounting Formula

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

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