Question 1

An endogenous variable

Accepted Answer

A)  is a variable whose value is determined outside the model.
B)  is a variable whose value is determined within the model.
C)  is a variable from another country.
D)  cannot be proven wrong.E) None of the above
F) A) and D)

Question 2

Economists often disagree about the validity of ______________ about how the world works.

Accepted Answer

A)  alternative collections
B)  alternative norms
C)  alternative judgements
D)  alternative positive theoriesE) A) and B)
F) B) and C)

Question 3

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False  True

Question 4

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 5

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A)  ask winners of the Nobel Prize in Economics to evaluate their theories.
B)  argue that data is impossible to collect in economics.
C)  gather data from historical episodes of economic change.
D)  assume that data would support their theories.E) C) and D)
F) A) and B)

Question 6

The ultimate purpose of an economic model is to

Accepted Answer

A)  explain reality as completely as possible.
B)  establish assumptions that closely resemble reality.
C)  help us to understand economic behaviour.
D)  guide government policy decisions.E) None of the above
F) A) and B)

Question 7

Which of the following statements about models is correct?

Accepted Answer

A)  The more details a model includes, the better the model.
B)  Models assume away irrelevant details.
C)  Models cannot be used to explain how the economy functions.
D)  Models cannot be used to make predictions.E) None of the above
F) A) and C) B

Question 8

A government minister states that wage rates in the country have risen by 2 per cent in the past year.The head of a trade union states that wage increases should have been higher.The minister's statement is a __________ economic statement, and the union leader's statement is a __________ economic statement.

Accepted Answer

A)  normative; normative
B)  normative; positive
C)  positive; normative
D)  positive; positiveE) A) and B)
F) A) and C)

Question 9

Which of the following is not correct?

Accepted Answer

A)  Economists use some familiar words in specialised ways.
B)  Economics has its own language and its own way of thinking, but few other fields of study do.
C)  Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language.
D)  The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.E) B) and D)
F) B) and C)

Question 10

What is the difference between rational thought and empirical thought?

Accepted Answer

Rationality is a normative con...

Question 11

If two variables tend to increase and decrease together, they are

Accepted Answer

A)  positively correlated.
B)  negatively correlated.
C)  uncorrelated.
D)  quasi-correlated.E) A) and D)
F) None of the above

Question 12

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

Accepted Answer

A)  Deterministic
B)  Micro
C)  Macro
D)  ChaosE) All of the above
F) None of the above D

Question 13

"An increase in interest rates will lower economic growth." This statement is

Accepted Answer

A)  a positive economic statement.
B)  a normative economic statement.
C)  untrue in every case.
D)  controversial, and so not a valid economic issue.E) A) and B)
F) B) and C)

Question 14

Explain how economists can claim to act as scientists.

Accepted Answer

Economists can act as scientis...

Question 15

The number of rainy days in the year and annual sales of sun tan lotion are probably

Accepted Answer

A)  positively correlated.
B)  negatively correlated.
C)  uncorrelated.
D)  quasi-correlated.E) B) and C)
F) C) and D)

Question 16

A simplifying assumption

Accepted Answer

A)  affects the important conclusions of an economic model.
B)  increases the level of detail in an economic model.
C)  limits the validity of an economic model's conclusion.
D)  eliminates unnecessary details from an economic model.E) A) and C)
F) C) and D)

Question 17

What is Marxist economics?

Accepted Answer

Marxist economists present different exp...

Question 18

A student's final mark and amount of time spent studying for the module are generally

Accepted Answer

A)  positively correlated.
B)  negatively correlated.
C)  uncorrelated.
D)  quasi-correlated.E) B) and C)
F) A) and D)

Question 19

Policymaking in a representative democracy

Accepted Answer

A)  is straightforward and does not involve any disagreement.
B)  benefits from the input of economists, even if their advice is not always followed.
C)  is conducted without the input of economists.
D)  is always based exclusively on the results of economic analysis.E) A) and B)
F) C) and D)

Question 20

Which of the following is most closely associated with positive economics?

Accepted Answer

A)  Determining the impact of government spending on the actual level of unemployment.
B)  Determining the best level of immigration into a country.
C)  Determining whether too many luxury goods are being produced.
D)  Determining whether or not the government should reduce poverty.E) None of the above
F) C) and D)

Exam 2: Thinking Like an Economist

An endogenous variable

Correct AnswerverifiedShow Answer

Economists often disagree about the validity of ______________ about how the world works.

Correct AnswerverifiedShow Answer

Good assumptions simplify a problem without substantially affecting the answer.

Correct AnswerverifiedTrue

Economists try to address their subject with a scientist's objectivity.

Correct AnswerverifiedShow Answer

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Correct AnswerverifiedShow Answer

The ultimate purpose of an economic model is to

Correct AnswerverifiedShow Answer

Which of the following statements about models is correct?

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

What is the difference between rational thought and empirical thought?

Correct AnswerverifiedRationality is a normative con...View AnswerShow Answer

If two variables tend to increase and decrease together, they are

Correct AnswerverifiedShow Answer

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

Correct AnswerverifiedD

"An increase in interest rates will lower economic growth." This statement is

Correct AnswerverifiedShow Answer

Explain how economists can claim to act as scientists.

Correct AnswerverifiedEconomists can act as scientis...View AnswerShow Answer

The number of rainy days in the year and annual sales of sun tan lotion are probably

Correct AnswerverifiedShow Answer

A simplifying assumption

Correct AnswerverifiedShow Answer

What is Marxist economics?

Correct AnswerverifiedMarxist economists present different exp...View AnswerShow Answer

A student's final mark and amount of time spent studying for the module are generally

Correct AnswerverifiedShow Answer

Policymaking in a representative democracy

Correct AnswerverifiedShow Answer

Which of the following is most closely associated with positive economics?

Correct AnswerverifiedShow Answer

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True

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B

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Rationality is a normative con...
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D

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Economists can act as scientis...
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Marxist economists present different exp...
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