Chapter 2

Empiricism refers to using​ ________ to analyze the world. data value judgments beliefs traditions

data

How does the sample size affect the validity of an empirical​ argument? The sample size is not relevant if it is greater than 30. The larger the sample size the better. The sample size is not relevant if it is greater than 50. The smaller the sample size the better.

The larger the sample size the better.

Give an example of a pair of variables that have negative correlation. The color of a​ person's shirt and the number of meals sold at Chinese restaurants. The number of physicists and the speed of sound. The number of winter coats sold and the temperature outside. The quantity of fertilizers used and crop yield.

The number of winter coats sold and the temperature outside.

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

The predictions of the model will hold in most cases but not all.

Which of the following relationships is likely to exhibit a negative​ correlation? The relationship between the amount of precipitation in a year and the number of umbrellas sold The relationship between the level of professional training and unemployment The relationship between the amount saved with a bank and the interest earned The relationship between inflation in the United States and traffic congestion in China

The relationship between the level of professional training and unemployment

Which of the following statements is​ true? Using fewer observations will strengthen the force of an empirical argument. Empirical arguments can be supported without the use of data. Using a large data set will strengthen the force of an empirical argument. The number of observations used does not affect the strength of an empirical argument.

Using a large data set will strengthen the force of an empirical argument.

As the text​ explains, it can sometimes be very difficult to sort out the direction of causality. Causation occurs when there is​ ____________. a​ historical-known relationship. a​ mythical-known relationship. a logical​ cause-and-effect relationship. an ancedotal​ cause-and-effect relationship.

a logical​ cause-and-effect relationship.

As the text​ explains, it can sometimes be very difficult to sort out the direction of causality. Causation occurs when there is​ ____________. a​ mythical-known relationship. an anecdotal​ cause-and-effect relationship. a​ historical-known relationship. a logical​ cause-and-effect relationship.

a logical​ cause-and-effect relationship.

models are based on

assumptions which helps use to simplify reality when evaluating a model we critique its assumptions

The scientific method (aka empiricism) is composed of two steps:

1. Developing models that explain some part of the world 2. Testing those models using data to see how closely the model matches what we actually observe

Which of the following statements correctly indicates a property of good economic​ questions? A good economic question should always be easy to answer. A good economic question should always be positive and not normative. A good economic question addresses topics that are important to economic agents​ and/or to society. A good economic question must always include arithmetic calculations and graphical solutions.

A good economic question addresses topics that are important to economic agents​ and/or to society.

A​ model's predictions are referred to as​ ________. statistics theories hypotheses empirical evidence

hypotheses

negative correlation

x and y move in opposite directions

positive correlation

x and y move in the same direction

Which of the following is most likely to be an example of​ causation? A soccer player scores four goals when he wears red socks. He concludes that the red socks helped him score the goals. A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future. The crime rate is high in a country. The literacy rate is high as well. A firm producing compact fluorescent light bulbs installs new machinery. Their perminus−day production of light bulbs increases.

A firm producing compact fluorescent light bulbs installs new machinery. Their perminus−day production of light bulbs increases.

Which of the following is least likely to be a question or study of economic​ concern? What is the motivation of the Red​ Cross? Is anything really​ free? What are the benefits to Tampa Bay of hosting the Super​ Bowl? How connected is productivity and​ wage?

What is the motivation of the Red​ Cross?

Two properties of good economic questions:

relevant and important can be answered

Correlation

statistical association between two variables

Controlled Experiments

subjects are randomly put into treatment and control groups by researchers

Which of the following statements is​ true? Causation arises when there is correlation between two variables and can also arise when there is no correlation. Correlation arises when there is causation and can also arise when there is no causation. Correlation can only arise when term-21causation is not present. Causation can only arise when correlation is not present.

Correlation arises when there is causation and can also arise when there is no causation.

What is meant by randomization in the context of an economic​ experiment? Group numbers are arranged in a non-sequential order. Subjects are assigned to control and test groups by noneconomic factors such as race. Economic experiments are not arranged in a logical sequence. Subjects are assigned by​ chance, rather than by​ choice, to a group.

Subjects are assigned by​ chance, rather than by​ choice, to a group.

A model refers to​ ________. a simplified​ description, or​ representation, of reality ​facts, measurements, or statistics that describe the world a set of facts established by observation and measurement a perfect replica of reality

a simplified​ description, or​ representation, of reality

Natural experiments

subjects go into treatment or control groups due to something that is not purposefully determined by the researcher

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

sum of all different values divided by the number of values