Question 1

You always have math problems to work in class whenever you forget to bring your calculator to school. Concluding that forgetting your calculator causes your professor to assign math problems is an example of the
A) fallacy of logic.
B) fallacy of inductive reasoning.
C) ceteris paribus conditions.
D) post hoc, ergo propter hoc fallacy.

Accepted Answer

This is an example of the post hoc, ergo propter hoc fallacy, which translates to "after this, therefore because of this." It assumes that because one event follows another, the first event must be the cause of the second, which is not necessarily true.

Question 2

Refer to Scenario 1.2 below to answer the question(s) 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 statement, "automobile emissions are harmful to the environment and should be reduced to stop the increase in global temperatures," is an example of
A) positive economics.
B) marginal economics.
C) normative economics.
D) the fallacy of logic.

Accepted Answer

The statement is an example of normative economics because it reflects a value judgment about what ought to be done, rather than an objective analysis of what is.

Question 3

Whenever a former governor is elected president, the unemployment rate decreases; whenever a former congressman is elected president, the inflation rate increases. This statement is an example of
A) fallacy of logic.
B) post hoc, ergo propter hoc fallacy.
C) ceteris paribus fallacy.
D) fallacy of inductive reasoning.

Accepted Answer

The statement is an example of the post hoc, ergo propter hoc fallacy, which assumes that because one event follows another, the first event must be the cause of the second. This fallacy overlooks other factors that could influence the outcomes (unemployment rate decrease or inflation rate increase).

Question 4

Refer to Scenario 1.2 below to answer the question(s) 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. A graph of the volume of automobile emissions on one axis and the level of average global temperatures on the other axis is an example of
A) an economic model.
B) an economic theory.
C) a variable theory.
D) inductive reasoning.

Accepted Answer

A graph representing the relationship between two variables, such as automobile emissions and global temperatures, is an example of an economic model, which visually or mathematically represents economic processes or theories.

Question 5

The concept of equity would explain the redistribution from the rich to the poor which is achieved from a tax system that requires taxes to
A) fall when income rises.
B) rise when income rises.
C) remain stable when income rises.
D) be unrelated to income.

Accepted Answer

The concept of equity, particularly vertical equity, supports a progressive tax system where taxes rise with income. This means individuals with higher incomes pay a higher percentage in taxes, facilitating redistribution from the rich to the poor.

Question 6

Isabel noted that whenever she wore her green contact lenses, the Chicago White Sox would win that evening. Based on this observation, she developed the "green-eyes-for-White-Sox" theory of winning. It is most likely true that Isabel
A) showed good reasoning for the reason the White Sox would win.
B) committed the ceteris paribus error.
C) committed the fallacy of logic.
D) was confusing causality.

Accepted Answer

Isabel is confusing causality with correlation. Just because the White Sox win on the days she wears green contact lenses does not mean her wearing them causes the team to win. This is a common logical fallacy where two events occurring together are mistakenly believed to have a cause-and-effect relationship.

Question 7

Refer to Scenario 1.2 below to answer the question(s) 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
A) law and economics.
B) economic history.
C) econometrics.
D) empirical economics.

Accepted Answer

Econometrics is the application of statistical methods to economic data to test economic theories. In this scenario, the scientist is using econometrics to test the theory that automobile emissions cause global warming.

Question 8

Because all workers should be able to earn a living wage, the minimum wage should be raised to $11.50 per hour in the United States. This statement is best described as
A) a normative statement.
B) a positive statement.
C) a marginal statement.
D) an implication of an efficient market.

Accepted Answer

A normative statement expresses a value judgment about whether a situation is desirable or undesirable. It looks at the world as it "should" be. The statement given is normative because it expresses an opinion that the minimum wage "should" be raised to ensure workers can earn a living wage.

Question 9

Salary caps are imposed when league officials believe some football team owners are taking advantage of their deep pockets and buying more quality players than the other owners can afford to buy. Which of the following criteria are they using to guide their actions?
A) growth
B) stability
C) efficiency
D) equity

Accepted Answer

Salary caps are imposed to ensure fairness and equal opportunity among teams, which aligns with the concept of equity.

Question 10

A(n) ________ is a formal statement of a theory.
A) model
B) empirical measure
C) positive statement
D) causal statement

Accepted Answer

A model is a formal statement or representation of a theory, often used to predict outcomes in various scenarios based on certain assumptions.

Question 11

Economic stability refers to the condition of steady growth in national output, with ________ inflation and ________ employment of resources.
A) negative; low
B) low; full
C) high; full
D) no; no

Accepted Answer

Economic stability is characterized by steady growth in national output, low inflation, and full employment of resources, which ensures a stable and healthy economy.

Question 12

Refer to Scenario 1.2 below to answer the question(s) 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 statement that a 1% increase in the automobile emissions causes a 0.0003% increase in average global temperatures is an example of
A) positive economics.
B) marginal economics.
C) normative economics.
D) the fallacy of logic.

Accepted Answer

The statement is an example of positive economics because it describes a cause-and-effect relationship based on empirical data, without making a value judgment. Positive economics deals with what is or what the impact of certain actions or policies will be, based on factual statements or hypotheses that can be tested.

Question 13

By invoking the assumption of ceteris paribus, economists
A) consider the impact of all relevant factors.
B) hold all variables constant when analyzing a model.
C) isolate the impact of one single variable while holding all other variables constant.
D) exclude irrelevant detail when analyzing a model.

Accepted Answer

Ceteris paribus is a Latin phrase meaning "all other things being equal," used by economists to isolate the effect of one variable by holding other relevant factors constant.

Question 14

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
A) a normative statement.
B) a positive statement.
C) a marginal statement.
D) an implication of an efficient market.

Accepted Answer

This statement is a normative statement because it expresses an opinion about what ought to be rather than what is. It makes a value judgment, suggesting that the legal drinking age should be changed based on the legal voting age.

Question 15

Refer to Scenario 1.2 below to answer the question(s) 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 statement that an increase in automobile emissions causes an increase in global warming is an example of
A) an economic theory.
B) a fallacy.
C) deductive reasoning.
D) normative economics.

Accepted Answer

The answer of Refer to Scenario 1.2 below to answer...

Question 16

When an economist states that "price changes cause quantity changes ceteris paribus", she is stating that price changes cause quantity changes
A) always.
B) all else equal.
C) only in theory.
D) only in efficient markets.

Accepted Answer

The term "ceteris paribus" is a Latin phrase meaning "all else equal." It is used in economics to indicate that only the specified variables (in this case, price changes) are considered, while all other potential influencing factors are held constant.

Question 17

Ockham's razor is the principle that states
A) supply creates its own demand.
B) we must forgo something when making a decision.
C) costs which have been incurred cannot be avoided.
D) irrelevant detail should not be included in a model.

Accepted Answer

Ockham's razor is a principle that suggests the simplest explanation or strategy tends to be the best one. It advises that one should not make more assumptions than the minimum needed. This principle is often applied in the context of scientific modeling, where it suggests that models should not include unnecessary details.

Question 18

The Latin phrase ceteris paribus means that when a relationship between two variables is being studied
A) both are treated as unpredictable.
B) neither of those two variables is allowed to change.
C) all other variables are held fixed.
D) we recognize that some factors are unknown.

Accepted Answer

Ceteris paribus is a Latin phrase that translates to "all other things being equal." In economics and other social sciences, it is used to indicate that when examining the relationship between two variables, all other variables are held constant or unchanged. This assumption allows for the isolation of the effects of the variables being studied.

Question 19

The decrease in exports from the United States is in part due to the strength of the U.S. dollar relative to foreign currencies. This statement is best described as
A) a marginal statement.
B) a normative statement.
C) a positive statement.
D) an unsubstantiated statement.

Accepted Answer

This statement is a positive statement because it describes a factual situation or cause-and-effect relationship without expressing any opinions or value judgments. Positive statements can be tested and validated through observation or data.

Question 20

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of
A) fallacy of logic.
B) post hoc, ergo propter hoc fallacy.
C) ceteris paribus fallacy.
D) fallacy of inductive reasoning.

Accepted Answer

This statement is an example of the post hoc, ergo propter hoc fallacy, which assumes that because one event followed another, the first event caused the second. In this case, the speaker mistakenly believes their graduation caused the job market to worsen.

Quiz 1: The Scope and Method of Economics

You always have math problems to work in class whenever you forget to bring your calculator to school. Concluding that forgetting your calculator causes your professor to assign math problems is an example of the

Whenever a former governor is elected president, the unemployment rate decreases; whenever a former congressman is elected president, the inflation rate increases. This statement is an example of

The concept of equity would explain the redistribution from the rich to the poor which is achieved from a tax system that requires taxes to

Isabel noted that whenever she wore her green contact lenses, the Chicago White Sox would win that evening. Based on this observation, she developed the "green-eyes-for-White-Sox" theory of winning. It is most likely true that Isabel

Because all workers should be able to earn a living wage, the minimum wage should be raised to $11.50 per hour in the United States. This statement is best described as

Salary caps are imposed when league officials believe some football team owners are taking advantage of their deep pockets and buying more quality players than the other owners can afford to buy. Which of the following criteria are they using to guide their actions?

A(n) ________ is a formal statement of a theory.

Economic stability refers to the condition of steady growth in national output, with inflation and employment of resources.

By invoking the assumption of ceteris paribus, economists

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

When an economist states that "price changes cause quantity changes ceteris paribus", she is stating that price changes cause quantity changes

Ockham's razor is the principle that states

The Latin phrase ceteris paribus means that when a relationship between two variables is being studied

The decrease in exports from the United States is in part due to the strength of the U.S. dollar relative to foreign currencies. This statement is best described as

The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of