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Flashcards in chapter 1: m/c Deck (20):
1

which one of the following is essential to the scientific method?
a. that the scientist be objective
b. that only incorrect theories are tested
c. that the scientist use precision equipment
d. that the scientist use test tubes and have a clean lab

A

2

which of the following is MOST likely to produce scientific evidence about a theory
a. a radio talk-show host collecting data on how financial markets respond to taxation
b. a lawyer employed by GM addressing the impact of air bags on passenger safety
c. a tenured economist employed at a leading university analyzing the impact of proposed bank mergers
d. an economist employed by the Canadian auto workers union doing research on the impact of international trade

C

3

which of the following statements regarding the circular-flow diagram is true
a. the factors of production are owned by firms
b. the factors of production are owned by households
c. if Molson sells a case of beer, the transaction takes place in the market for factors of production
d. If Susan works for bell and receives a paycheck, the transaction takes place in the market for goods and services

B

4

which one of the following cases presents the MOST reasonable assumption?

a. to address the benefits of trade, an economist assumes that there are two people and two goods
b. to estimate the speed at which a beach ball falls, a physicist assumes that the it falls in a vacuum
c. to address the impact of money growth on inflation, an economist assumes that money is strictly coins
d. to address the impact of taxes on income distribution, an economist assumes that everyone earns the same income.

A

5

which of the following statements is true of economic models

a. built with assumptions
b. useless if they are simple
c. created to duplicate reality
d. usually made of wood and plastic

A

6

which of the following is NOT a factor of production

a. land
b. labour
c. capital
d. money

D

7

which one of the following refers to points inside the production possibilities frontier?
a. efficient
b. inefficient
c. unattainable
d. normative

B

8

which one of the following will NOT shift a country's production possibilities frontier outward
a. an increase in the capital stock
b. an advance in technology
c. a reduction in unemployment
d. an increase in the labour force

C

9

which one of the following is a depiction of economic growth

a. a movement from inside the curve toward the curve
b. a shift in the production possibilities frontier outward
c. a shift in the production possibilities frontier inward
d. a movement along a production possibilities frontier toward capital goods

B

10

see question 10

B

11

see question 11

D

12

see question 12

C

13

see question 13

C

14

which one of the following issues is related ot macroeconomics

a. the impact of growth in the quantity of money on inflation
b. the impact of rising gas prices on car sales
c. the impact of government regulations on the airline industry
d. the impact of foreign competition on the wine industry in Canada

A

15

which one of the following statements about microeconomics and macroeconomics is NOT true

a. microeconomics is a building block for macroeconomics

b. macroeconomics is concerned with economy-wide phenomena
c. microeconomics and macroeconomics each has its own set of models
d. the study of very large industries is a topic within macroeconomics

D

16

which one of the following statements is normative

a. printing too much money causes inflation
b. people work heard if the wage is higher
c. the unemployment rate should be lower
d. large gov deficits cause an economy to grow more slowly

C

17

in which one of the following statements made by an economist is the economist acting more like a scientist?

a. the rate of inflation should be reduced because it robs the elderly of their savings
b. a reduction in employment insurance benefits will reduce the unemployment rate
c. the unemployment rate should be reduced because unemployment robs individuals of their dignity
d. the gov should increase subsidies to universities because the future of our country depends on education

B

18

which of the following most represents positive statements:

a. microeconomics
b. macroeconomics
c. statements of description that can be tested
d. statements of prescription that involve value judgments

C

19

suppose two economists are arguing about policies that deal with unemployment. one economist says " the gov. should fight unemployment because it is the greatest social evil. the other economist responds, hogwash, inflation is the greatest social evil. which of the following summarizes the positions to the two economists?

a. they disagree because they have different values
b. they really do not agree at all - it just looks that way
c. they disagree because at least one of them is incompetent
d. the disagree because they have different scientific judgments.

A

20

suppose two economists are arguing about policies that deal with unemployment one economist says the gov. could lower unemployment by one percentage point if it would just increase gov spending by $5 billion. the other one says hogwash. if the gov spent an additional $5 billion, it would reduce unemployment by only one-tenth of one percent, and that effect would only be temporary. which of the following summarizes the positions of the two economists.

a. they disagree because they have different values
b. they really do not disagree at all - it just looks that way
c. they disagree because at least one of them is incompetent
d. they disagree because they have different scientific judgement

D