Exam 1: The Scope and Method of Economics

Normative economics questions "What ought to be?" Positive economics predicts the consequences of alternative actions, answering the questions "What is?" or "What will be?"

Positive economics is an approach to economics that

Refer to the information provided in Figure 1.7 below to answer the questions that follow. Figure 1.7 -Refer to Figure 1.7. If a 45-degree line were also graphed, it would ________ the line shown on the graph.

Refer to the information provided in Figure 1.4 below to answer the questions that follow. Figure 1.4 -Refer to Figure 1.4. At Point E in panel A, the slope is

The statement "people should pollute as little as possible" is an example of a

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 Panels shows a curve or line that has a zero slope throughout?

Since the legal age to vote in the United States is 18, the legal drinking age in the United States should be lowered to 18. This statement is best described as

You have decided that you want to attend a renaissance fair as King Henry VIII. You estimate that it will cost $80 to assemble your costume. After spending $80 on the costume, you realize that the additional pieces you need will cost you $20 more. The marginal cost of completing the costume is

Related to the Economics in Practice on page 9: Prior to joining a fraternity, James spent most of his evenings and weekends studying for his classes. Once he joined the fraternity, James spent a majority of his evenings and weekends going to parties. This change in behavior is best described by

Opportunity cost is

________ economy is an economy that produces what consumers demand and does so at the least possible cost.

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

There is a possibility that a national sales tax will be implemented. Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals. This argument is motivated by concerns over

Microeconomics is best described as the study of

A graph illustrating how a variable changes over time is called a time-series graph.

Many economists argue that items such as food and clothing should be exempt from sales tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals. This argument is motivated by concerns over

The study 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. Panel A shows a curve which has a slope that is

The mistake of inferring causality from ________ is called the post hoc, ergo propter hoc fallacy.

Refer to Scenario 1.2 below to answer the questions 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