Question 1

An economic model suggests that an additional year of education increases a student's future wages by 15 percent.Using this model,answer the following questions.
a)Gary completes 8 years of education,and John completes 9 years of education.If Gary earns $20 per hour,how much is John expected to earn?
b)John completes 9 years of education,and Kevin completes 12 years of education.Given John's earnings (as calculated in part a),how much is Kevin expected to earn?
c)Is there any limitation to such a model? Explain your answer.

Accepted Answer

The answer of An economic model suggests that an additional...

Question 2

The following table shows the monthly wages of five different individuals.
 
-Refer to the table above.What is the average monthly wage?
A) $450
B) $558
C) $612
D) $650

Accepted Answer

To find the average, we need to add up all the monthly wages and divide by the total number of people. ($300 + $500 + $600 + $700 + $800) ÷ 5 = $558. Therefore, the answer is B) $558.

Question 3

The average income of 25 employees working in a firm is $1,754 per month.What is the total income of all the employees?
A) $40,000
B) $43,850
C) $56,225
D) $63,950

Accepted Answer

The total income of all employees is calculated by multiplying the average income by the number of employees: $1,754 * 25 = $43,850.

Question 4

The mean of a data set is the ________.
A) product of all values divided by the number of values
B) sum of all different values divided by the number of values
C) sum of all different values multiplied by the number of values
D) difference between the highest value and the lowest value

Accepted Answer

The mean of a data set is the sum of all values divided by the number of values. It is not the product of all values, the sum of all different values multiplied by the number of values, or the difference between the highest value and the lowest value.

Question 5

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent.
-Refer to the scenario above.Which of the following statements is true about the model?
A) The model is not based on any assumption.
B) The predictions of the model will hold for every individual.
C) The model describes the economic payoff of more education.
D) The model can be applied for a maximum of 10 years of additional education.

Accepted Answer

The model assumes that an additional year of education will increase a student's future wage by 20 percent, thereby describing the economic payoff of more education. However, it does not necessarily hold true for every individual, and there is no mention of a maximum limit for the number of years of additional education.

Question 6

Which of the following is a key property of models?
A) All economic models begin with assumptions.
B) Empiricism is not essential for testing models.
C) All models can be used for a limited time only.
D) All models are consistent and do not make incorrect predictions.

Accepted Answer

All economic models rely on assumptions to simplify complex systems and make predictions based on those assumptions. Empirical testing is important to validate or update the assumptions, but it is not the only way to test a model. Models are also not necessarily consistent or correct in all predictions, as they are simplifications of real-world systems. And while models may have a limited lifespan if they become outdated or new data arises, this is not true for all models.

Question 7

An economic model suggests that for every additional year of education,an individual's future wages increase by 5 percent.If Richard,with 12 years of education,earns $20 per hour,how much will he earn per hour if he decides to undertake 4 additional years of education?

Accepted Answer

The answer of An economic model suggests that for every...

Question 8

In country X,the average yearly salary of 50-year-olds with 16 years of education is $50,275,while the average yearly salary of 50-year-olds with 12 years of education is $36,265.According to these data,4 additional years of education are likely to be correlated with higher future wages of about ________.
A) 24 percent
B) 38 percent
C) 50 percent
D) 88 percent

Accepted Answer

The difference in average yearly salary between 16 years of education and 12 years of education is $14,010. To find the percentage increase in wages for each additional year of education, we can divide this difference by the number of additional years of education (16-12=4). 
$14,010/4 = $3,502.50
To find the percentage increase, we can divide this amount by the average yearly salary of those with 12 years of education and multiply by 100.
($3,502.50/$36,265) x 100 = 9.65%
So, on average, each additional year of education is likely to be correlated with a 9.65% increase in future wages. Since we're asked for the increase in wages for four additional years of education, we can multiply this percentage by 4 to get 38.6%, or approximately 38%. Therefore, the answer is B.

Question 9

In a hypothetical country,the average wage of five 40-year-old citizens with a college education is $36,896,and the average wage of five 40-year-old citizens with a high school education is $25,864.What is the returns-to-college education in the country? Is there any limitation of this analysis? Explain your answer.

Accepted Answer

The answer of In a hypothetical country,the average wage of...

Question 10

Which of the following statements is true about the mean of a series?
A) The mean is equal to zero when all the values are identical.
B) The mean is a commonly used technique for summarizing data.
C) The mean is less than all the individual observations in the data set.
D) The mean is calculated as the sum of all values multiplied by the number of values.

Accepted Answer

The mean is a commonly used technique for summarizing data. Option A is false because if all the values are identical, the mean is equal to that value, not zero. Option C is false because the mean is a measure of central tendency and is an average value, so it cannot be less than all the individual observations in the dataset. Option D is false because the mean is calculated as the sum of all the values divided by the number of values, not multiplied.

Question 11

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent.
-Refer to the scenario above.Which of the following statements is true about the model's prediction?
A) The prediction cannot be verified empirically.
B) The prediction is precise, exact, and accurate for the entire population.
C) The prediction is an approximate relationship and may not hold for everyone.
D) The prediction can be applied to estimate the returns only for a limited number of years of additional education.

Accepted Answer

The model's prediction is an approximate relationship based on an assumption and may not hold true for every individual. The 20% increase in future wage for an additional year of education is likely to vary based on factors such as the individual's field of study, location, and economic conditions. Therefore, the prediction is not precise, exact, or accurate for the entire population. However, it provides a general idea of the potential benefits of education and can be used as a rough estimate.

Question 12

A local swimming club enrolled thirty-five new members during the current year and charged each member a onetime membership fee of $200.What is the total membership fee collected by the club from the new members this year?
A) $1,750
B) $2,000
C) $7,000
D) $3,500

Accepted Answer

The total membership fee collected would be the product of the number of new members and the membership fee charged to each member:
35 x $200 = $7,000

Question 13

The following table shows the monthly wages of five different individuals.
 
-Refer to the table above.The average monthly wage of the five workers is ________.
A) $600
B) $450
C) $440
D) $0

Accepted Answer

To find the average, we need to add up all the wages and divide by the number of workers.

Total wages = $350 + $400 + $480 + $500 + $320 = $2050

Number of workers = 5

Average wage = Total wages / Number of workers = $2050 / 5 = $410

Therefore, the average monthly wage of the five workers is $440 (closest option is C).

Question 14

Annie,Darwin,Dorothy,Christian,and Isabella are five college students who work as part-time bartenders.If their average weekly earnings is $100,then their total weekly earnings is ________.
A) $500
B) $400
C) $250
D) $700

Accepted Answer

The total weekly earnings can be calculated by multiplying the average earnings ($100) by the number of students (5), which equals $500.

Question 15

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent.
-Refer to the scenario above.Which of the followings statements is true of the model?
A) The predictions of this model can be verified empirically.
B) The predictions of this model can only be applied for a limited number of years of additional education.
C) According to the model, 2 additional years of education will increase an individual's future wages 1.20 times.
D) According to the model, 2 additional years of education will increase an individual's future wages 2.98 times.

Accepted Answer

The model's assumption that an additional year of education increases a student's future wage by 20 percent is a quantifiable claim that can be tested against real-world data, making its predictions empirically verifiable.

Question 16

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent.
-Refer to the scenario above.Which of the following statements is true of the model?
A) The predictions of this model cannot be tested with data.
B) The predictions of this model are accurate and will hold for all individuals.
C) The predictions of this model can be applied to unlimited years of additional education.
D) The model predicts that two additional years of education is likely to increase future earnings by 60 percent.

Accepted Answer

The answer of A model is based on an assumption...

Question 17

What are the two important properties of all models?

Accepted Answer

The answer of What are the two important properties of...

Question 18

Which of the following implies that a model is an approximation?
A) The model is not based on any assumption.
B) The predictions of the model are mostly wrong.
C) The predictions of the model will hold in most cases but not all.
D) The predictions of the model cannot be tested with data.

Accepted Answer

If the model is an approximation, it means that it is not perfectly accurate and may not hold true in all cases. Option C suggests that the predictions of the model are mostly correct, but there will be some exceptions where it does not hold true. The other options do not necessarily imply that the model is an approximation.

Question 19

The weights of six students in the seventh grade are 120 lbs,110 lbs,105 lbs,100 lbs,96 lbs,and 90 lbs.The average weight of the six students is ________.
A) 105 lbs.
B) 103.5 lbs.
C) 100 lbs.
D) 95 lbs.

Accepted Answer

To find the average weight, we need to add up all the weights and divide by the number of students. 
(120+110+105+100+96+90)/6 = 103.5 lbs. Therefore, the answer is B.

Question 20

Public-use data refer to ________.
A) data that have to be purchased from an external agent
B) data that are available to anyone who wants to use it
C) data published by the government only during political campaigns
D) data collected by a researcher only through field investigation

Accepted Answer

Public-use data are data that are publicly available and can be accessed by anyone who wants to use them without having to purchase them from an external agent. These data can include census data, surveys, and other data that are collected and made available to the public for research or other purposes.

Quiz 2: Economic Methods and Economic Questions

The following table shows the monthly wages of five different individuals. -Refer to the table above.What is the average monthly wage?

The average income of 25 employees working in a firm is $1,754 per month.What is the total income of all the employees?

The mean of a data set is the ________.

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent. -Refer to the scenario above.Which of the following statements is true about the model?

Which of the following is a key property of models?

An economic model suggests that for every additional year of education,an individual's future wages increase by 5 percent.If Richard,with 12 years of education,earns $20 per hour,how much will he earn per hour if he decides to undertake 4 additional years of education?

Which of the following statements is true about the mean of a series?

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent. -Refer to the scenario above.Which of the following statements is true about the model's prediction?

A local swimming club enrolled thirty-five new members during the current year and charged each member a onetime membership fee of $200.What is the total membership fee collected by the club from the new members this year?

The following table shows the monthly wages of five different individuals. -Refer to the table above.The average monthly wage of the five workers is ________.

Annie,Darwin,Dorothy,Christian,and Isabella are five college students who work as part-time bartenders.If their average weekly earnings is $100,then their total weekly earnings is ________.

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent. -Refer to the scenario above.Which of the followings statements is true of the model?

A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent. -Refer to the scenario above.Which of the following statements is true of the model?

What are the two important properties of all models?

Which of the following implies that a model is an approximation?

The weights of six students in the seventh grade are 120 lbs,110 lbs,105 lbs,100 lbs,96 lbs,and 90 lbs.The average weight of the six students is ________.

Public-use data refer to ________.