Question 1

Which of the following is a positive statement?

Accepted Answer

Option A is a positive statement because it presents a fact; low rents restrict the supply of housing. It does not contain any value judgments or opinions. B, C, D, and E are normative statements because they express some form of opinion or value judgment about what ought to be, rather than what is.

Question 2

Model A is superior to model B if

Accepted Answer

The superiority of a model is determined by how well its predictions correspond to the facts, so option C is the correct choice. Option A is incorrect because more real-world detail does not necessarily make a model superior. Option B is partially true but relies on subjective judgement of what is considered unrealistic. Option D is completely irrelevant to the scientific evaluation of a model. Option E is also irrelevant since scientific elegance is a matter of aesthetics rather than scientific validity.

Question 3

Figure 1A.1.5
 
-The graphs in Figure 1A.1.5 are examples of

Accepted Answer

The graphs in Figure 1A.1.5 are scatter diagrams, which show the relationship between two variables, x and y. Each dot represents a data point, and the pattern of the dots indicates the strength and direction of the relationship between the variables.

Question 4

Fact 1.4.1 Costco
When Costco opened a gas bar just off Highway 401, the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre.
-Refer to Fact 1.4.1. To control the crowd Costco hires traffic police. When Costco hires traffic police, it faces a tradeoff that could include all of the following except

Accepted Answer

Costco hiring traffic police to manage the crowd due to discounted gas prices involves trade-offs related to managing resources and space (like hiring more staff, managing inventory, or adjusting displays), but it doesn't directly relate to taking business away from other gas stations, which is a consequence of offering the discount, not a trade-off of hiring traffic police.

Question 5

A normative statement is a statement regarding

Accepted Answer

Normative statements express subjective opinions about what should or ought to be, rather than describing factual realities.

Question 6

To disentangle cause and effect, economists use economic models and use ________ to test the predictions of those models.

Accepted Answer

To disentangle cause and effect, economists use experimental methods and statistical investigations, which falls under the category of natural experiments and economic experiments. These methods are used to test the predictions of economic models. Choice A is related to the three central questions that define any economy. Choice B distinguishes between descriptive and prescriptive statements. Choice C is not relevant to this context. Choice E is a principle used to make decisions about the allocation of resources.

Question 7

In choosing among alternative models, economists generally have the strongest preference for models that

Accepted Answer

Economists prioritize models that have the ability to provide accurate predictions. While it is important for models to have some level of simplicity and clarity, the most important factor in choosing a model is its predictive power.

Question 8

A good economic model

Accepted Answer

A good economic model should be simple enough to be understandable and applicable to real world problems. Including only those features of the world that are necessary for the specific purpose of the model helps maintain its simplicity without sacrificing its usefulness.

Question 9

Figure 1A.1.5
 
-Refer to Figure 1A.1.5. Which graph or graphs indicates a positive relationship between x and y?

Accepted Answer

The answer of Figure 1A.1.5
 
-Refer to Figure 1A.1.5. Which...

Question 10

Select the best statement about economic models.

Accepted Answer

Economic models are tools for understanding the complex realities of the economy. They are not expected to be perfect, but if a model consistently makes predictions that do not match observed facts, it may be revised or discarded in favor of models that provide more accurate forecasts. This process of evaluation and revision helps in improving the models' usefulness in understanding economic phenomena.

Question 11

Which of the following is a normative statement?

Accepted Answer

A normative statement is a statement that expresses a value judgment about whether a situation is desirable or undesirable. Option C expresses a value judgment that the government cuts in welfare spending are unfair to the poor. The other options are factual statements that can be objectively verified or falsified.

Question 12

An economic model is tested by

Accepted Answer

The best way to test an economic model is to compare its predictions with the facts. This helps to determine if the assumptions made in the model are realistic and if the model accurately captures the economic phenomenon it is meant to analyze. Examining the realism of the assumptions and comparing its descriptions are also important steps in testing the model, but they are not as relevant as comparing the predictions with the actual outcomes.

Question 13

Which of the following statements are positive?
1. The federal government should increase production of biofuels.
2. Air travel has increased since September 11.
3. The greatest number of accidents are caused by drunk drivers.
4. We ought to have a cure for cancer.

Accepted Answer

The answer of Which of the following statements are positive?
1....

Question 14

When Al makes the statement, "The cost of living has increased 10 percent over the past 10 years," he is

Accepted Answer

Al's statement is a positive statement because it describes a factual situation about the cost of living increasing by 10 percent over the past 10 years without making a judgment or recommendation. Positive statements are objective and can be tested or verified.

Question 15

"The rich face higher income tax rates than the poor, which is not good since it is the rich who provide jobs for the poor." This is an example of

Accepted Answer

This is a normative statement as it is making a value judgment about what is good or bad, rather than just stating a fact. It argues that the current tax system is not good because it imposes higher tax rates on the group of people who are job providers for the other group of people who have lower income, without providing any evidence to support this claim.

Question 16

Figure 1A.1.5
 
-Refer to Figure 1A.1.5. Which graph or graphs indicates a negative relationship between x and y?

Accepted Answer

The answer of Figure 1A.1.5
 
-Refer to Figure 1A.1.5. Which...

Question 17

An economic model is

Accepted Answer

Economic models are considered useful if they can accurately predict outcomes, even if the assumptions they are based on are not entirely realistic. This is because simplification is a necessary part of model-building to focus on key variables and relationships.

Question 18

"The rich face higher income tax rates than the poor" is an example of

Accepted Answer

This is a positive statement, as it describes the current state of the tax system and is a factual statement. It is not normative, predictive, theoretical or analytical as it does not make value judgements, make predictions about the future, propose a theory or provide analysis on the topic.

Question 19

Fact 1.4.1 Costco
When Costco opened a gas bar just off Highway 401, the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre.
-Refer to Fact 1.4.1. The opportunity cost of a litre of gas is

Accepted Answer

The opportunity cost of a litre of gas in this scenario is the time that drivers spent waiting in line to get the discounted gas, as they could have been doing something else during that time.

Question 20

Which of the following statements are true regarding "positive" statements?
I. They describe what "ought to be."
II. They describe what is believed about how the world appears.
III. They can be tested as to their truthfulness.

Accepted Answer

Positive statements describe what is believed about how the world appears and can be tested as to their truthfulness. However, they do NOT describe what "ought to be."

Quiz 1: What Is Economics

Which of the following is a positive statement?

Model A is superior to model B if

Figure 1A.1.5 -The graphs in Figure 1A.1.5 are examples of

A normative statement is a statement regarding

To disentangle cause and effect, economists use economic models and use ________ to test the predictions of those models.

In choosing among alternative models, economists generally have the strongest preference for models that

A good economic model

Figure 1A.1.5 -Refer to Figure 1A.1.5. Which graph or graphs indicates a positive relationship between x and y?

Select the best statement about economic models.

Which of the following is a normative statement?

An economic model is tested by

Which of the following statements are positive? 1. The federal government should increase production of biofuels. 2. Air travel has increased since September 11. 3. The greatest number of accidents are caused by drunk drivers. 4. We ought to have a cure for cancer.

When Al makes the statement, "The cost of living has increased 10 percent over the past 10 years," he is

"The rich face higher income tax rates than the poor, which is not good since it is the rich who provide jobs for the poor." This is an example of

Figure 1A.1.5 -Refer to Figure 1A.1.5. Which graph or graphs indicates a negative relationship between x and y?

An economic model is

"The rich face higher income tax rates than the poor" is an example of

Fact 1.4.1 Costco When Costco opened a gas bar just off Highway 401, the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre. -Refer to Fact 1.4.1. The opportunity cost of a litre of gas is

Which of the following statements are true regarding "positive" statements? I. They describe what "ought to be." II. They describe what is believed about how the world appears. III. They can be tested as to their truthfulness.