Question 1

A testable proposition that predicts how people will react to changed circumstances is called a hypothesis.

Accepted Answer

This is the correct definition of a hypothesis.

Question 2

What is the term for the beginning point of a graph (the 0,0 point)?
A) the basis point
B) variable one
C) the origin
D) the quadrant

Accepted Answer

The origin is defined as the point (0,0) on a graph, which serves as the reference point for all other coordinates in the graph. It is also referred to as the starting point or initial position. The other answer choices are not correct; "basis point" is not a commonly used term in graphing, "variable one" does not refer to a specific point on a graph, and "quadrant" is only relevant when graphing in a coordinate plane.

Question 3

Which of the following does the market place NOT determine?
A) equity
B) price
C) distribution
D) production quantity

Accepted Answer

The market place does not determine equity, which refers to fairness and justice in the distribution of resources and opportunities. This is typically determined by social and political institutions, rather than market forces.

Question 4

A hypothesis is a normative statement.

Accepted Answer

A hypothesis is an explanatory statement, not a normative one.

Question 5

Which of the following graphs or charts must add up to 100 percent?
A) a labour graph
B) a time-series graph
C) a bar graph
D) a pie chart

Accepted Answer

A pie chart is a type of graph where the whole circle represents 100% and each slice represents a portion of that total. Therefore, a pie chart must always add up to 100%.

Question 6

Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.

Accepted Answer

Microeconomics focuses on studying the behavior of individual consumers, firms, and industries in making economic decisions regarding the allocation of scarce resources.

Question 7

TABLE 1-5
 
-Refer to Table 1-5. What does this table demonstrate about price and quantity at each combination?
A) They are uncorrelated.
B) They are inversely related.
C) They have no effect on each other.
D) They are positively related.

Accepted Answer

The table likely shows that as the price increases, the quantity demanded decreases, or vice versa, indicating an inverse relationship between price and quantity.

Question 8

One topic that microeconomics explores is how prices are determined in individual markets, while macroeconomics is concerned with issues such as the economy's overall rate of inflation, economic growth and unemployment.

Accepted Answer

Microeconomics focuses on individual markets and the determination of prices within those markets, while macroeconomics deals with larger issues such as inflation, economic growth, and unemployment on a national or global scale.

Question 9

Economics has much in common with sociology because it is concerned with how societies organize themselves. However, economics shares little in common with political science, psychology or anthropology.

Accepted Answer

Economics shares commonalities with political science, psychology, and anthropology as well, as these disciplines also explore aspects of human behavior, decision-making, governance, and cultural practices, all of which influence economic systems and theories.

Question 10

Microeconomics is the branch of economics in which you study inflation and unemployment in the economy.

Accepted Answer

Microeconomics is the branch of economics that deals with the behavior and decision-making of individual consumers, businesses, and households, as well as how they interact in markets. Inflation and unemployment are studied in macroeconomics, which focuses on the overall performance of the economy as a whole.

Question 11

In a four quadrant graph, economics is primarily concerned with which area?
A) upper left
B) lower right
C) lower left
D) upper right

Accepted Answer

The upper right quadrant represents high economic prosperity and high social well-being, which is the ultimate goal of economics.

Question 12

In a market economy, what groups decide the amount of a good that is produced?
A) buyers and sellers
B) producers and input suppliers
C) all consumers
D) producers and government planning committees

Accepted Answer

In a market economy, the amount of a good that is produced is determined by the interaction of buyers and sellers through the forces of supply and demand. Producers supply goods based on the demand from buyers, and buyers demand goods based on their preferences and ability to pay. This market mechanism determines the quantity of goods produced and consumed in the economy.

Question 13

Economic theories are of limited use since they cannot be tested empirically.

Accepted Answer

Economic theories can be tested empirically through various methods such as experiments, surveys, and statistical analysis. However, the accuracy and reliability of such tests may be limited by factors such as sample size, availability and quality of data, and the complexity of the economic phenomenon being studied.

Question 14

A good economic theory should capture as many details about real-world behaviour as possible.

Accepted Answer

A good economic theory should be able to simplify and abstract from reality to identify and explain fundamental principles, rather than capturing every detail of real-world behavior.

Question 15

"The hotter it gets, the more water people drink." What type of relationship, if any, does this statement imply?
A) There is no relationship.
B) There is an unequal relationship.
C) There is a negative slope.
D) There is a positive slope.

Accepted Answer

The statement implies a positive relationship between temperature and amount of water people drink. As the temperature increases, the amount of water people drink also increases. A positive slope indicates a direct relationship between two variables, which is the case here.

Question 16

The main concern of economics is to study how well the stock markets are performing.

Accepted Answer

The main concern of economics is the allocation of scarce resources and the study of how society uses those resources. While the stock market is an important aspect of the economy, it is not the sole focus of economics.

Question 17

In markets, how is information about the relative value of resources communicated?
A) through unions
B) through planning committees
C) through prices
D) through government agencies

Accepted Answer

Information about the relative value of resources is communicated through prices in markets. Prices act as signals to buyers and sellers about the availability and desirability of resources. Higher prices indicate scarcity or higher demand, while lower prices indicate abundance or lower demand. This helps allocate resources efficiently in the market. Unions, planning committees, and government agencies may have some influence on resource allocation, but they do not communicate information about the relative value of resources in the same way that prices do.

Question 18

Most students expect that if they spend more time studying, the outcome will be improved grades in the course. What does this suppose?
A) Grades are independent variables.
B) A negative relationship exists between studying and grades.
C) A positive relationship exists between studying and grades.
D) Grades are not dependent variables.

Accepted Answer

The statement suggests that as the amount of time spent studying increases, the grades obtained in the course will also improve. This indicates a positive relationship between studying and grades, and not a negative or independent relationship.

Question 19

TABLE 1-5
 
-Refer to Table 1-5. What does the table demonstrate?
A) More apples are purchased as the price declines.
B) Fewer apples are purchased as the price declines.
C) More apples are purchased at each and every price.
D) Fewer apples are purchased at each and every price.

Accepted Answer

The table likely shows a demand curve for apples, illustrating that as the price of apples decreases, consumers are willing to purchase more apples, which is a fundamental principle of demand in economics.

Question 20

Which of the following statements best describes the effects of price controls?
A) They always lower the price.
B) They efficiently allocate resources.
C) They always benefit those that the price is trying to help.
D) They distort market prices.

Accepted Answer

Price controls, whether they are price floors or price ceilings, create a distortion in the marketplace. For example, price ceilings prevent the price from rising above a certain level, which can create a shortage of goods or services that people want, as suppliers may not be willing to produce them at the controlled price. On the other hand, a price floor can create a surplus of goods or services, as suppliers produce more than consumers want to buy at the mandated price. Overall, price controls result in market inefficiencies that can negatively impact both consumers and producers.

Quiz 1: The Role and Method of Economics

A testable proposition that predicts how people will react to changed circumstances is called a hypothesis.

What is the term for the beginning point of a graph (the 0,0 point) ?

Which of the following does the market place NOT determine?

A hypothesis is a normative statement.

Which of the following graphs or charts must add up to 100 percent?

Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms.

TABLE 1-5 -Refer to Table 1-5. What does this table demonstrate about price and quantity at each combination?

One topic that microeconomics explores is how prices are determined in individual markets, while macroeconomics is concerned with issues such as the economy's overall rate of inflation, economic growth and unemployment.

Economics has much in common with sociology because it is concerned with how societies organize themselves. However, economics shares little in common with political science, psychology or anthropology.

Microeconomics is the branch of economics in which you study inflation and unemployment in the economy.

In a four quadrant graph, economics is primarily concerned with which area?

In a market economy, what groups decide the amount of a good that is produced?

Economic theories are of limited use since they cannot be tested empirically.

A good economic theory should capture as many details about real-world behaviour as possible.

"The hotter it gets, the more water people drink." What type of relationship, if any, does this statement imply?

The main concern of economics is to study how well the stock markets are performing.

In markets, how is information about the relative value of resources communicated?

Most students expect that if they spend more time studying, the outcome will be improved grades in the course. What does this suppose?

TABLE 1-5 -Refer to Table 1-5. What does the table demonstrate?

Which of the following statements best describes the effects of price controls?