Question 1

Economists often disagree about the validity of ______________ about how the world works.

Accepted Answer

A)   alternative collections
B)   alternative norms
C)   alternative judgements
D)   alternative positive theoriesE) C) and D)
F) B) and C)

Question 2

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

Accepted Answer

A)   Deterministic
B)   Micro
C)   Macro
D)   ChaosE) A) and B)
F) A) and C)

Question 3

Which of the following is an example of a normative, as opposed to positive, statement?

Accepted Answer

A)   Petrol prices ought to be lower than they are now.
B)   The government should raise taxes on wealthy people.
C)   The social security system is a good system and it deserves to be preserved as it is.
D)   All of the above are normative statements.E) B) and D)
F) None of the above

Question 4

Which of the following is an example of a positive, as opposed to normative, statement?

Accepted Answer

A)   Income tax rates should not have been cut as they were a few years ago.
B)   The quantity of money has grown too slowly in recent years.
C)   When the quantity of money grows rapidly, inflation is a predictable consequence.
D)   All of the above are positive statements.E) B) and D)
F) A) and B)

Question 5

Which of the following is not correct?

Accepted Answer

A)   Economists use some familiar words in specialised ways.
B)   Economics has its own language and its own way of thinking, but few other fields of study do.
C)   Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language.
D)   The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.E) B) and C)
F) A) and C)

Question 6

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Accepted Answer

A) True 
 B)False

Question 7

When an economist evaluates a positive statement, he or she is primarily

Accepted Answer

A)   examining evidence.
B)   evaluating values as well as facts.
C)   acting as a policy adviser.
D)   concerned with making a sound decision on how the world ought to be.E) None of the above
F) All of the above

Question 8

The number of rainy days in the year and annual sales of sun tan lotion are probably

Accepted Answer

A)   positively correlated.
B)   negatively correlated.
C)   uncorrelated.
D)   quasi-correlated.E) B) and C)
F) None of the above

Question 9

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 10

If two variables tend to increase and decrease together, they are

Accepted Answer

A)   positively correlated.
B)   negatively correlated.
C)   uncorrelated.
D)   quasi-correlated.E) C) and D)
F) A) and D) A

Question 11

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Accepted Answer

A) True 
 B)False

Question 12

If economic models have so many limitations, why do economists continue to use them?

Accepted Answer

Economic models help us to simplify real...

Question 13

"An increase in interest rates will lower economic growth." This statement is

Accepted Answer

A)   a positive economic statement.
B)   a normative economic statement.
C)   untrue in every case.
D)   controversial, and so not a valid economic issue.E) A) and B)
F) A) and C)

Question 14

The ultimate purpose of an economic model is to

Accepted Answer

A)   explain reality as completely as possible.
B)   establish assumptions that closely resemble reality.
C)   help us to understand economic behaviour.
D)   guide government policy decisions.E) None of the above
F) B) and D)

Question 15

What is the difference between rational thought and empirical thought?

Accepted Answer

Rationality is a normative con...

Question 16

Is it fair that people earning in excess of R1 500 000 a year should pay a much higher tax rate on income above this level? Explain your answer.

Accepted Answer

There is no one correct answer...

Question 17

If money growth and inflation were strongly correlated in international data, the economist would become more ___________ in a theory linking the two.

Accepted Answer

A)   doubtful
B)   confident
C)   anxious
D)   concernedE) A) and D)
F) B) and C)

Question 18

What is Marxist economics?

Accepted Answer

Marxist economists present different exp...

Question 19

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False  False

Question 20

Economists, like mathematicians, physicists and biologists,

Accepted Answer

A)   make use of the scientific method.
B)   try to address their subject with a scientist's objectivity.
C)   devise theories, collect data, and then analyse these data in an attempt to verify or refute their theories.
D)   All of the above are correct.E) A) and C)
F) All of the above D

Exam 2: Thinking Like an Economist

Economists often disagree about the validity of ______________ about how the world works.

Correct AnswerverifiedShow Answer

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

Correct AnswerverifiedShow Answer

Which of the following is an example of a normative, as opposed to positive, statement?

Correct AnswerverifiedShow Answer

Which of the following is an example of a positive, as opposed to normative, statement?

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

While the scientific method is applicable to studying natural sciences, it is not applicable to studying a nation's economy.

Correct AnswerverifiedShow Answer

When an economist evaluates a positive statement, he or she is primarily

Correct AnswerverifiedShow Answer

The number of rainy days in the year and annual sales of sun tan lotion are probably

Correct AnswerverifiedShow Answer

Economists try to address their subject with a scientist's objectivity.

Correct AnswerverifiedShow Answer

If two variables tend to increase and decrease together, they are

Correct AnswerverifiedA

Economists often find it worthwhile to make assumptions that do not necessarily describe the real world.

Correct AnswerverifiedShow Answer

If economic models have so many limitations, why do economists continue to use them?

Correct AnswerverifiedEconomic models help us to simplify real...View AnswerShow Answer

"An increase in interest rates will lower economic growth." This statement is

Correct AnswerverifiedShow Answer

The ultimate purpose of an economic model is to

Correct AnswerverifiedShow Answer

What is the difference between rational thought and empirical thought?

Correct AnswerverifiedRationality is a normative con...View AnswerShow Answer

Is it fair that people earning in excess of R1 500 000 a year should pay a much higher tax rate on income above this level? Explain your answer.

Correct AnswerverifiedThere is no one correct answer...View AnswerShow Answer

If money growth and inflation were strongly correlated in international data, the economist would become more ___________ in a theory linking the two.

Correct AnswerverifiedShow Answer

What is Marxist economics?

Correct AnswerverifiedMarxist economists present different exp...View AnswerShow Answer

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Correct AnswerverifiedFalse

Economists, like mathematicians, physicists and biologists,

Correct AnswerverifiedD

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A

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Economic models help us to simplify real...
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Rationality is a normative con...
View Answer

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There is no one correct answer...
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Marxist economists present different exp...
View Answer

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False

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D