Week 1 HW and Quiz

Positive statements are

claims about how the world is.

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

Have 100 questions, 3000 answers

Economists face an obstacle that many other scientists do not face. What is that obstacle?

It is often impractical to perform experiments in economics

Which of the following areas of study typifies microeconomics as opposed to macroeconomics?

the impact of minimum-wage laws on employment in the fast food industry

When economists are trying to explain the world, they are

Scientist

Economists, like mathematicians, physicists, and biologists,

- devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. - try to address their subject with a scientist's objectivity. - make use of the scientific method

Economics is the study of how evenly goods and services are distributed within society. (T/F)

False

In the circular-flow diagram, firms consume all the goods and services that they produce(T/F)

False

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services

False

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services. (T/F)

False

In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers. (T/F)

False

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement?

One economist advises against increases in sales taxes because she thinks such increases are unfair to low-income people; another economist disputes the idea that increases in sales taxes are unfair to low-income people.

Sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption.

When economists are trying to help improve the world, they are

Policy Advisers

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

The US Department of Justice sued AT&T to block its merger with T-Mobile.

In the circular-flow diagram, payments for labor, land, and capital flow from firms to households through the markets for the factors of production. (T/F)

True

In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production. (T/F)

True

In the markets for goods and services in the circular-flow diagram, households are buyers and firms are sellers. (T/F)

True

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

When the minimum wage is increased, unemployment is a predictable consequence.

Macroeconomics is the study of

World-wide phenomena

Economists sometimes give conflicting advice because

economists have different values and scientific judgment.

Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars" is an example of a

normative economic statement.

Differences in scientific judgement between economists are similar to all of the following except

two politicians arguing about the fairness of the tax code.