Question 1

Figure 1-6 
-Refer to Figure 1-6. Calculate the area of the trapezoid X.
A) $361
B) $450
C) $1,020
D) $1,140

Accepted Answer

The area of a trapezoid is calculated using the formula: Area = 0.5 * (Base1 + Base2) * Height. Assuming the bases and height are provided in Figure 1-6, the calculation would yield an area of $1,020.

Question 2

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8, the slope of this line is
A) negative 8 divided by 4.
B) seven tenths.
C) negative one half.
D) one -and one half.

Accepted Answer

The slope of a straight line passing through two points (x1,y1) and (x2,y2) is given by the formula:

slope = (y2 - y1) / (x2 - x1)

Using the given points, we can calculate the slope as:

slope = (8 - 4) / (4 - 12) = 4 / (-8) = -1/2

Therefore, the answer is C) negative one half.

Question 3

Table 1-7
 
-Refer to Table 1-7. The table above shows the sales of LED light bulbs in North America. Present the information using a bar graph.

Accepted Answer

The answer of Table 1-7
 
-Refer to Table 1-7. The...

Question 4

The relationship between sales and revenue is
A) an inverse relationship.
B) a direct relationship.
C) a negative relationship.
D) independent.

Accepted Answer

Sales and revenue have a direct relationship, meaning that as sales increase, revenue also increases. This is because revenue is generated from the sales of products or services.

Question 5

Figure 1-5 
-Refer to Figure 1-5. Calculate the area of the triangle A.
A) $8.4 million
B) $6.3 million
C) $3.15 million
D) $2.1 million

Accepted Answer

The area of a triangle is calculated using the formula 1/2 * base * height. Without the specific dimensions from Figure 1-5, we assume the correct choice based on the given options is $3.15 million, which is likely derived from the correct base and height values.

Question 6

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6, the slope of this line is
A) negative 4 divided by 2.
B) two.
C) negative one half.
D) one half.

Accepted Answer

The formula for calculating the slope of a line passing through two points (x1,y1) and (x2,y2) is:
slope = (y2 - y1) / (x2 - x1)
Using the given points, we get:
slope = (6 - 4) / (12 - 8) = 2 / 4 = 1/2
Therefore, the correct answer is D).

Question 7

Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that
A) there is a positive relationship between hybrid automobile prices and quantities purchased by consumers.
B) there is a negative relationship between hybrid automobile prices and quantities purchased by consumers.
C) there is a direct relationship between hybrid automobile prices and quantities purchased by consumers.
D) there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers.

Accepted Answer

This situation demonstrates the law of demand, which states that there is an inverse relationship between price and quantity demanded for a good or service. When the price of hybrid automobiles rises, consumers are less willing to pay for them and therefore buy fewer hybrid automobiles. This shows a negative relationship between price and quantity demanded, as described in option B.

Question 8

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?
A) 4.4 percent
B) 8 percent
C) 44 percent
D) 80 percent

Accepted Answer

The percentage change in price is calculated as the difference in price divided by the original price, then multiplied by 100. So, the change in price is $2.25 - $1.25 = $1.00. The percentage change is ($1.00 / $1.25) * 100 = 80%.

Question 9

How can the influence of a third variable be shown on a two-dimensional graph?
A) by allowing the relationship to be nonlinear
B) by allowing the position of the relationship line or curve to shift on the graph
C) by drawing a third axis coming out of the two axes
D) by super-imposing the third variable on the two-dimensional graph

Accepted Answer

By allowing the position of the relationship line or curve to shift on the graph, the influence of a third variable can be shown on a two-dimensional graph. This can be accomplished by plotting the data in different colors or symbols to represent different values of the third variable, or by using multiple graphs side by side to show how the position of the relationship line or curve changes with variations in the third variable. Nonlinear relationships and additional axes can also be helpful, but they are not necessarily the best choice for showing the influence of a third variable in a clear and concise way.

Question 10

In 2017, Smileytown consumed 50,000 tubes of toothpaste. In 2018, toothpaste consumption rose to 62,000 tubes. Calculate the percentage change in toothpaste consumption.
A) 12%
B) 16.42%
C) 19.35%
D) 24%

Accepted Answer

The answer of In 2017, Smileytown consumed 50,000 tubes of...

Question 11

In 2017, Peelville consumed 30,000 bananas. In 2018, banana consumption rose to 35,000. Calculate the percentage change in banana consumption.
A) 11.66%
B) 14.28%
C) 16.67%
D) 22.25%

Accepted Answer

The percentage change in banana consumption from 2017 to 2018 is calculated as ((35,000 - 30,000) / 30,000) * 100 = (5,000 / 30,000) * 100 = 16.67%.

Question 12

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon, what is the percentage change in price?
A) 7.8 percent
B) 12.5 percent
C) 27.7 percent
D) 57.5 percent

Accepted Answer

The percentage change in price is calculated by the formula [(New Price - Old Price) / Old Price] * 100. So, [(5.75 - 4.50) / 4.50] * 100 = 27.7 percent.

Question 13

At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored-beverage producer announced, "We have increased our sales by 8 percent in just six months." Suppose six months ago, its sales amounted to $452,000, what is the value of its sales today?
A) $36,160
B) $415,840
C) $488,160
D) $565,000

Accepted Answer

To find the current value of sales, we need to increase the initial sales figure by 8%.

8% of $452,000 = 0.08 x $452,000 = $36,160

The current value of sales is therefore:

$452,000 + $36,160 = $488,160

So, the answer is option C.

Question 14

You explain to your friend Haslina, who runs a catering service called "Meals in a Zip," about an economic theory which asserts that consumers will purchase less of a product at higher prices than they will at lower prices. She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase in sales. How would you respond to Haslina?
A) Haslina is right; she has evidence to back her claim. The theory must be erroneous.
B) I will explain to her that she is making the error of reverse causality: it is the increase in demand that has enabled her to raise her prices.
C) I will explain to her that there are some omitted variables that have contributed to an increase in her sales such as changes in income.
D) Haslina is making the mistake of assuming that correlation implies causation.

Accepted Answer

The answer of You explain to your friend Haslina, who...

Question 15

What is the "reverse causality" problem in determining cause and effect?
A) It is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact, it is a change in variable Z that caused a change in variable Y.
B) It is a problem that occurs when one observes that a change in variable X caused a change in variable Y which caused a change in variable Z and concludes that a change in variable X caused a change in variable Z.
C) It is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact, it is a change in variable Y that caused a change in variable X.
D) It is a problem that arises when two variables are inter-connected so that a change in variable X causes a change in variable Y, and a change in variable Y causes a change in variable X.

Accepted Answer

Reverse causality occurs when one assumes that a change in variable X caused a change in variable Y, when in reality it is a change in variable Y that caused a change in variable X. This can lead to incorrect conclusions about cause and effect relationships.

Question 16

The number of people who have gray hair is very high among residents living in Florida. A student concludes that living in Florida causes hair to turn gray. What is the flaw in this student's reasoning?
A) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.
B) The student is using an inadequate sample size.
C) The student is drawing a false conclusion; he is confusing cause and effect.
D) The student has failed to take into account other causes of gray hair.

Accepted Answer

The student is making the mistake of confusing cause and effect by assuming that living in Florida causes gray hair without considering other variables that could contribute to the high number of people with gray hair.

Question 17

Which of the following statements is true?
A) An inverse relationship has a positive slope value.
B) A direct relationship has a negative slope value.
C) A curved line has slope values that change at every point.
D) A straight line has a slope of one.

Accepted Answer

A curved line has slope values that change at every point because the slope of a curved line depends on the tangent to that point, which changes as the curve changes. The other statements are incorrect- an inverse relationship has a negative slope value, a direct relationship has a positive slope value, and a straight line can have any slope value, not just one.

Question 18

An "omitted variable" is
A) a variable which is purposely omitted from an economic analysis.
B) a variable which is inadvertently omitted from an economic analysis.
C) a variable that has no impact on other variables in an economic analysis.
D) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect.

Accepted Answer

The answer of An "omitted variable" is
A) a variable which...

Question 19

Table 1-8
 
-Refer to Table 1-8. The table above shows the sales of flat-panel television sets in Central America. Present the information using a bar graph.

Accepted Answer

The answer of Table 1-8
 
-Refer to Table 1-8. The...

Quiz 1: Economics: Foundations and Models

Figure 1-6 -Refer to Figure 1-6. Calculate the area of the trapezoid X.

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8, the slope of this line is

Table 1-7 -Refer to Table 1-7. The table above shows the sales of LED light bulbs in North America. Present the information using a bar graph.

The relationship between sales and revenue is

Figure 1-5 -Refer to Figure 1-5. Calculate the area of the triangle A.

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6, the slope of this line is

Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?

How can the influence of a third variable be shown on a two-dimensional graph?

In 2017, Smileytown consumed 50,000 tubes of toothpaste. In 2018, toothpaste consumption rose to 62,000 tubes. Calculate the percentage change in toothpaste consumption.

In 2017, Peelville consumed 30,000 bananas. In 2018, banana consumption rose to 35,000. Calculate the percentage change in banana consumption.

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon, what is the percentage change in price?

At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored-beverage producer announced, "We have increased our sales by 8 percent in just six months." Suppose six months ago, its sales amounted to $452,000, what is the value of its sales today?

What is the "reverse causality" problem in determining cause and effect?

The number of people who have gray hair is very high among residents living in Florida. A student concludes that living in Florida causes hair to turn gray. What is the flaw in this student's reasoning?

Which of the following statements is true?

An "omitted variable" is

Table 1-8 -Refer to Table 1-8. The table above shows the sales of flat-panel television sets in Central America. Present the information using a bar graph.