Micro midterm problem set
Empiricism is a principle in economics that _________. A. uses data to test economic models. B. gathers data using surveys. C. aggregates data to create graphs. D. collects data using the scientific method.
A
Suppose you had to find the effect of seatbelt rules on road accident fatalities. Would you choose to run a randomized experiment or would it make sense to use natural experiments here? Explain. A. Randomized, because seatbelt rules may be influenced by road accident fatalities. B. Natural, because seatbelt rules may be unrelated to road accident fatalities. C. Natural, because seatbelt rules may increase road accident fatalities. D. Randomized, because natural experiments with seatbelt rules may exist
A
The Taft-Hartley Act (1947) allows workers to be employed at a firm without joining the union at their workplace or paying membership fees to the union. This arrangement is known as an open shop. Considering that unions negotiate terms of employment and wages on behalf of all the workers at a firm, which of the following is true? A.Workers are likely to join a union, since the required dues for membership are lower than the higher salaries that the unions can negotiate with firms. B. Workers are not likely to join a union, since they will not have to pay union dues and will still be able to free ride from the benefits of union negotiations. This is the correct answer. C. Workers are likely to join a union because without enough members paying dues, unions cannot function properly and negotiate effectively. D. Workers are not likely to join a union, since negotiating individually will likely lead to a better salary than relying on a union to negotiate.
B
This chapter stressed the importance of using appropriate samples for empirical studies. Consider the following two problems in that light. You are given a class assignment to find out if people's political leanings affect the newspaper or magazine that they choose to read. You survey two students taking a political science class and five people at a coffee shop. Almost all the people you have spoken to tell you that their political affiliations do not affect what they read. Based on the results of your study, you conclude that there is no relationship between political inclinations and the choice of a newspaper. Is this a valid conclusion? Why or why not? A. No, because newspaper choice is based on correlation rather than causation from political inclination. B. No, because the newspapers that people read could affect their political inclinations. .C. Yes, because political science students are the control group and coffee shop students are the treatment group. D. Yes, because study participants are chosen randomly.
B
Statement 1: You can either stand during a college football game or you can sit. You believe that you will see the game very well if you stand and others sit but that you will not be able to see at all if you sit and others stand. You therefore decide to stand. Statement 2: Your friend tells you that he expects many people to stand at football games. Statement 3: An economist studies photos of many college football games and estimates that 75 percent of all fans stand and 25 percent sit. Which of these statements deals with optimization, which deals with equilibrium, and which deals with empiricism? Explain. Statement 1 deals with ____________. A. optimization, because other fans are maximizing their well-being. B. equilibrium, because other fans may change their behavior. C. optimization, because you are choosing your best feasible option. D. empiricism, because you believe you know what the other fans will do. Statement 2 deals with ____________. A. optimization, because you will need this information to identify your best feasible option. B. equilibrium, because your friend presumes everyone is behaving optimally. C. equilibrium, because it is a prediction rather than an observation. D. empiricism, because your friend's prediction can be tested using data. Statement 3 deals with ____________. A. empiricism, because it describes behavior using real-world data. B. empiricism, because it illustrates people optimizing using cost-benefit analysis. C. empiricism, because it evaluates whether people maximize their well-being. D. optimization, because it predicts how people's behavior will change.
C, B, A
Give an example of a pair of variables that have negative correlation. A.# of physicists and the speed of sound. B. color of a person's shirt and the number of meals sold at Chinese restaurants. C. quantity of fertilizers used and crop yield. D. # of winter coats sold and the temperature outside.
D
This chapter discussed natural and randomized experiments. Which of the following is not a characteristic of a natural experiment? A. It uses a process, out of the control of the experimenter, to assign subjects to groups in a random way. B. It can yield accurate results. C. It may utilize historical data for analysis. D. It is an inferior approach to a randomized method.
D
Which type of experiment is likely to yield more accurate results? A. Randomized, because a natural experiment may be completely influenced by chance. B. Natural, because there could be an omitted variable. C. Natural, because there could be reverse causality. D. Randomized, because a natural experiment may not be completely randomized.
D
