A) allows one to separate normative economic issues from positive economic ones.
B) allows one to generalize from the whole to the individual.
C) allows one to analyze the relationship between two variables apart from the influence of other variables
D) allows one to hold all variables constant so that an economy can be carefully observed in a suspended state.
E) allows one to generalize from the individual to the whole.
G) C) and D)
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A) Both the statements are normative
B) Both the statements are positive.
C) Bill's statement is normative, and Bob's statement is positive.
D) Bill's statement is positive, and Bob's statement is normative
E) Bill's statement is an example of the fallacy of composition, and Bob's statement is an example of the ceteris paribus assumption.
G) B) and E)
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B) False
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A) must be based on assumptions
B) explains economic behavior and predicts well.
C) can always be proved by past economic events.
D) always provides a highly detailed analysis of an economic sector.
E) must be based on rigorous mathematical calculations.
G) A) and B)
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A) stock markets crash because of the heavy selling of equities.
B) an economy fails to allocate resources efficiently on its own
C) consumer demand shows signs of slowing down​
D) an economy cannot produce a good or service at a lower opportunity cost than others.
E) there is a scarcity or surplus of goods in a market.
G) A) and D)
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A) Income tax reduces the after-tax income of the rich.
B) A reduction in tax rates makes the after-tax distribution of income fair.
C) A reduction in tax rates makes people work more.
D) People should involve themselves in charitable works.
E) People above the age of 60 should stop working more and take more vacations.
G) A) and D)
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B) False
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A) families would have the same number of children, but parents would wait longer to start a family.
B) more children would be born, with substantial age gaps between them.
C) more children would be adopted
D) fewer children would be born.
E) families would have the same number of children, but parents would not wait long to start a family.
G) B) and E)
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Answers will vary. A hypothesis is the f...View Answer
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A) the causal relationship between two economic variables cannot be determined.
B) an analysis is true for the individual but not for the economy as a whole.
C) all other variables except the ones specified are assumed to be constant
D) conclusions are based on normative rather than on positive economic analysis.
E) one variable causes another to occur if certain conditions are satisfied.
G) B) and E)
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A) Unemployment is a more severe problem than inflation.
B) Our current unemployment rate is a serious problem.
C) The current rate of unemployment in an economy is 4 percent.
D) An unemployment rate of 4 percent would be too low
E) Unemployment is a more severe problem than illiteracy
G) B) and E)
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A) undermine the market's ability to communicate relative scarcities to buyers and sellers.
B) always impose a cost on the people they try to assist
C) always force prices above what they would be in a market economy.
D) always force prices below what they would be in a market economy
E) result in increased market efficiency.
G) B) and D)
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A) New tax laws implemented by the government are likely to benefit the poor.
B) An increase in cigarette smoking will increase the likelihood of getting lung cancer.
C) The government should encourage all able-bodied citizens to enroll in the army.
D) The government should provide tax benefits to parents with more than two kids
E) There should be equality in the distribution of income in an economy
G) A) and B)
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B) False
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A) seek to improve their own situations and do not try to anticipate the future consequences of their actions.
B) only pursue the goals of the community.
C) seek to improve their own situations.
D) always choose alternatives that offer the greatest financial reward.
E) always choose alternatives that offer the greatest financial reward
G) B) and C)
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A) make decisions based on complete and accurate information
B) make decisions that they will not regret later on.
C) make decisions based on what they believe is best for themselves, using available information.
D) make decisions based on what they believe is best for themselves, using available information..
E) make decisions that cannot be altered in the future.
G) All of the above
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A) typically uses controlled experiments to learn about consumer and firm behavior.
B) uses models that cannot be tested empirically because of the complex nature of the economy.
C) explores how choices are made between conflicting wants and desires in a world of scarcity.
D) relies entirely on normative analysis to validate all hypotheses.
E) relies entirely on empirical analysis to validate all hypotheses.
G) A) and C)
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B) False
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A) the exchange of goods, services, and income between households and firms
B) the influence of government on the level of economic activity in a country.
C) the role of labor unions and government in the economy
D) the interaction among taxes, prices, and profits in an economy.
E) the taxes levied by the government and the revenue earned by the government.
G) B) and E)
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