Question 1

Suppose that a study is released stating that the fewer books people read, the more velvet paintings they tend to own. This is best described as an example of

Accepted Answer

A)  positive correlation. 
B)  negative correlation. 
C)  positive causation. 
D)  negative causation. 
A)  positive correlation. 
B)  negative correlation. 
C)  positive causation. 
D)  negative causation.

Question 2

Suppose that a study is released stating that the fewer speeding tickets a person is issued, the less gasoline they tend to purchase. This is best described as an example of

Accepted Answer

A)  positive correlation. 
B)  negative correlation. 
C)  positive causation. 
D)  negative causation. 
A)  positive correlation. 
B)  negative correlation. 
C)  positive causation. 
D)  negative causation.

Question 3

Refer to the information provided in Table 22.2 below to answer the question(s) that follow.
Table 22.2
 $$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Aggregate } \
\text { Income } ( Y )
\end{array} & \begin{array} { l } 
\text { Aggregate } \
\text { Consumption } ( C )
\end{array} \
\hline \boldsymbol { A } & 10 & 14 \
\hline B & 20 & 23 \
\hline C & 30 & 25 \
\hline D & 40 & 26 \
\hline E & 50 & 34 \
\hline F & 60 & 39 \
\hline
\end{array}$$ The data in the table was used to estimate the following consumption function: C = 12 + 0.4Y
-Refer to Table 22.2. The error for point C is equal to

Accepted Answer

A)  -1. 
B)  0. 
C)  +1. 
D)  +2. 
A)  -1. 
B)  0. 
C)  +1. 
D)  +2.

Question 4

When collecting data to conduct research, if the sample used is not random, ________ occurs.

Accepted Answer

A)  selection bias 
B)  survivor bias 
C)  regression discontinuity 
D)  difference-in-differences 
A)  selection bias 
B)  survivor bias 
C)  regression discontinuity 
D)  difference-in-differences

Question 5

Regression discontinuity is a method in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol.

Accepted Answer

A) True 
 B)False

Question 6

Refer to the information provided in Scenario 22.2 below to answer the question(s) that follow.
SCENARIO 22.2: A survey of 1,000 people in Austin, Texas (population 900,000) found that those who have chosen to eat organic produce for at least the past 5 years have experienced fewer serious medical issues than those who have not elected to eat organic produce. Therefore, the conclusion was made that eating organic produce helps prevent people from experiencing serious medical problems.
-Refer to Scenario 22.1. Which of the following statements pertaining to the scenario is the most accurate with respect to selection bias?

Accepted Answer

A)  The survey exhibits selection bias in that only 1,000 people were surveyed in a city with a population of 900,000). 
B)  The survey exhibits selection bias in that the 5-year time frame used to gauge serious medical issues is not long enough. 
C)  The conclusion exhibits selection bias in that there may be other factors, such as those who eat organic produce also exercise on a more regular basis, that could account for fewer serious medical problems. 
D)  All of the above are correct. 
A)  The survey exhibits selection bias in that only 1,000 people were surveyed in a city with a population of 900,000). 
B)  The survey exhibits selection bias in that the 5-year time frame used to gauge serious medical issues is not long enough. 
C)  The conclusion exhibits selection bias in that there may be other factors, such as those who eat organic produce also exercise on a more regular basis, that could account for fewer serious medical problems. 
D)  All of the above are correct.

Question 7

Tatiana observes that all of her friends who have more than five tattoos also have more than five body piercings, and concludes that getting multiple tattoos makes people also get multiple piercings. Tatiana is

Accepted Answer

A)  correct in her analysis. 
B)  confusing correlation and causation. 
C)  describing difference-in-differences. 
D)  describing regression discontinuity. 
A)  correct in her analysis. 
B)  confusing correlation and causation. 
C)  describing difference-in-differences. 
D)  describing regression discontinuity.

Question 8

Sherrie owns a pickup truck and also owns a parrot. Therefore, we can conclude that there is a causal relationship between owning the pickup truck and the parrot for Sherrie.

Accepted Answer

A) True 
 B)False

Question 9

Refer to the information provided in Scenario 22.1 below to answer the question(s) that follow.
SCENARIO 22.1: A study of 2,500 country club members in Phoenix found that those who play golf at least 2 times per week were 40 percent more likely to have suffered from skin cancer than those who never play golf. Therefore, the study concluded that in Phoenix, playing golf at least twice a week leads to a higher incidence of skin cancer in country club members.
-Refer to Scenario 22.1. Which of the following statements pertaining to the scenario is the most accurate with respect to selection bias?

Accepted Answer

A)  The conclusion exhibits selection bias in that only country club members in Phoenix were surveyed. 
B)  The conclusion exhibits selection bias in that there may be other factors besides playing golf more than 2 times per week that lead to a higher incidence of skin cancer in those members. 
C)  The study exhibits selection bias in that it is only concerned with skin cancer incidence in country club members. 
D)  The scenario does not exhibit selection bias. 
A)  The conclusion exhibits selection bias in that only country club members in Phoenix were surveyed. 
B)  The conclusion exhibits selection bias in that there may be other factors besides playing golf more than 2 times per week that lead to a higher incidence of skin cancer in those members. 
C)  The study exhibits selection bias in that it is only concerned with skin cancer incidence in country club members. 
D)  The scenario does not exhibit selection bias.

Question 10

Two variables are said to be positively correlated if their values

Accepted Answer

A)  are always positive. 
B)  only increase but never decrease. 
C)  tend to move in the same direction. 
D)  tend to move in opposite directions. 
A)  are always positive. 
B)  only increase but never decrease. 
C)  tend to move in the same direction. 
D)  tend to move in opposite directions.

Question 11

When computing p-values,

Accepted Answer

A)  the size of the sample matters, but variation in the population does not matter. 
B)  variation in the population matters, but the size of the sample does not matter. 
C)  both the size of the sample and variation in the population matter. 
D)  neither the size of the sample nor variation in the population matter. 
A)  the size of the sample matters, but variation in the population does not matter. 
B)  variation in the population matters, but the size of the sample does not matter. 
C)  both the size of the sample and variation in the population matter. 
D)  neither the size of the sample nor variation in the population matter.

Question 12

In a research project, when the sample used is not random, selection bias occurs.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the information provided in Scenario 22.3 below to answer the question(s) that follow.
SCENARIO 22.3: Consider a local high school that has 300 sophomores considered to be at-risk students. A privately-sponsored after-school sports program has been established to try to help at-risk students succeed in finishing high school. The local government wants to know if this program reduces the students' probability of dropping out of high school before the end of their junior year, and decides to randomly sample 150 of the 300 at-risk sophomores and invite them to attend the after-school program at no cost. 100 students accept the invitation, and by the end of their junior year, the drop-out percentage of the 100 students who attended the program was lower than the drop-out percentage of the 200 students who did not attend the program.
-Refer to Scenario 22.3. Based on the information in the scenario, can you conclude that the after-school program had a positive effect?

Accepted Answer

A)  Yes, because the drop-out percentage for those students who attended the program was lower than the drop-out percentage for those students who did not attend the program. 
B)  No, because less than half of the at-risk students attended the program. 
C)  Yes, because the 150 students offered the program were a random sample. 
D)  No, because we cannot assume the 100 students who accepted the offer were a random sample. 
A)  Yes, because the drop-out percentage for those students who attended the program was lower than the drop-out percentage for those students who did not attend the program. 
B)  No, because less than half of the at-risk students attended the program. 
C)  Yes, because the 150 students offered the program were a random sample. 
D)  No, because we cannot assume the 100 students who accepted the offer were a random sample.

Question 14

If people who have children also tend to own dogs, we can say there is a positive correlation between having children and dog ownership.

Accepted Answer

A) True 
 B)False

Question 15

A research project is conducted by offering a randomly selected 75 of the 200 local dog owners a chance to have their dogs wear a new flea collar for three months to see if the collar reduces the incidence of fleas. 50 of the 75 randomly selected dog owners agree to the offer, and 25 of those drop out of the study before the end of the three months. Using the intention to treat method, the results from how many of the randomly selected dogs should be included in the research project?

Accepted Answer

A)  0 
B)  25 
C)  50 
D)  75 
A)  0 
B)  25 
C)  50 
D)  75

Question 16

When conducting a study on success rates, which of the following would most likely be subject to survivor bias?

Accepted Answer

A)  Of the 4 Starbucks locations that opened exactly 5 years ago in the same city, the location next to the concert arena has been the most financially successful. 
B)  Of the 75 oil exploration firms based in North Dakota, over half of those that recently filed for bankruptcy have been in business for 5 years or less. 
C)  Of the 25 high schools located in Concordia County, this year's SAT scores were highest from students who attend Springdale High, the newest high school in the county. 
D)  Of the 115 oceanfront hotels in Honolulu, only those with private beaches are able to charge more than $200 per night on average. 
A)  Of the 4 Starbucks locations that opened exactly 5 years ago in the same city, the location next to the concert arena has been the most financially successful. 
B)  Of the 75 oil exploration firms based in North Dakota, over half of those that recently filed for bankruptcy have been in business for 5 years or less. 
C)  Of the 25 high schools located in Concordia County, this year's SAT scores were highest from students who attend Springdale High, the newest high school in the county. 
D)  Of the 115 oceanfront hotels in Honolulu, only those with private beaches are able to charge more than $200 per night on average.

Question 17

When collecting data to conduct research, if the sample used includes only observations which have remained in the sample over time, making that sample unrepresentative of the broader population, ________ occurs.

Accepted Answer

A)  intention to treat 
B)  survivor bias 
C)  regression discontinuity 
D)  difference-in-differences 
A)  intention to treat 
B)  survivor bias 
C)  regression discontinuity 
D)  difference-in-differences

Question 18

Refer to the information provided in Table 22.3 below to answer the question(s) that follow.
Table 22.3
 $$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Aggregate } \
\text { Income } ( \boldsymbol { Y } )
\end{array} & \begin{array} { l } 
\text { Aggregate } \
\text { Consumption } ( \boldsymbol { C } )
\end{array} \
\hline \boldsymbol { A } & 15 & 19 \
\hline \boldsymbol { B } & 30 & 23 \
\hline C & 45 & 27 \
\hline D & 60 & 31 \
\hline E & 75 & 35 \
\hline F & 90 & 39 \
\hline
\end{array}$$ The data in the table was used to estimate the following consumption function: C = 20 + 0.2Y
-Refer to Table 22.3. The SUM that is calculated from all the error points from the table is equal to

Accepted Answer

A)  +9. 
B)  +11. 
C)  +31. 
D)  +81. 
A)  +9. 
B)  +11. 
C)  +31. 
D)  +81.

Question 19

Debbie realizes that her twin brother Dudley breaks out in hives every time he eats oysters, and concludes that when Dudley feels a case of hives coming on, he must get a craving for oysters. Debbie is

Accepted Answer

A)  definitely confusing correlation with causation. 
B)  very probably correct in her conclusion that Dudley craves oysters whenever he is about to break out in hives. 
C)  likely correct that there is causation, but the causation is more likely running in the opposite direction in that eating oysters is the probable cause of Dudley's hives. 
D)  probably misguided in that there is no apparent correlation or causation in this situation. 
A)  definitely confusing correlation with causation. 
B)  very probably correct in her conclusion that Dudley craves oysters whenever he is about to break out in hives. 
C)  likely correct that there is causation, but the causation is more likely running in the opposite direction in that eating oysters is the probable cause of Dudley's hives. 
D)  probably misguided in that there is no apparent correlation or causation in this situation.

Question 20

Related to the Economics in Practice on p. 727: Randomly granting vouchers by the Department of Housing and Urban Development was an effort to avoid the

Accepted Answer

A)  substitution bias. 
B)  income bias. 
C)  selection bias. 
D)  location bias problem. 
A)  substitution bias. 
B)  income bias. 
C)  selection bias. 
D)  location bias problem.

Suppose that a study is released stating that the fewer books people read, the more velvet paintings they tend to own. This is best described as an example of

Suppose that a study is released stating that the fewer speeding tickets a person is issued, the less gasoline they tend to purchase. This is best described as an example of

When collecting data to conduct research, if the sample used is not random, ________ occurs.

Regression discontinuity is a method in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol.

Tatiana observes that all of her friends who have more than five tattoos also have more than five body piercings, and concludes that getting multiple tattoos makes people also get multiple piercings. Tatiana is

Sherrie owns a pickup truck and also owns a parrot. Therefore, we can conclude that there is a causal relationship between owning the pickup truck and the parrot for Sherrie.

Two variables are said to be positively correlated if their values

When computing p-values,

In a research project, when the sample used is not random, selection bias occurs.

If people who have children also tend to own dogs, we can say there is a positive correlation between having children and dog ownership.

When conducting a study on success rates, which of the following would most likely be subject to survivor bias?

When collecting data to conduct research, if the sample used includes only observations which have remained in the sample over time, making that sample unrepresentative of the broader population, ________ occurs.

Debbie realizes that her twin brother Dudley breaks out in hives every time he eats oysters, and concludes that when Dudley feels a case of hives coming on, he must get a craving for oysters. Debbie is

Related to the Economics in Practice on p. 727: Randomly granting vouchers by the Department of Housing and Urban Development was an effort to avoid the

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Filters

Exam 22: Critical Thinking About Research

Suppose that a study is released stating that the fewer books people read, the more velvet paintings they tend to own. This is best described as an example of

Suppose that a study is released stating that the fewer speeding tickets a person is issued, the less gasoline they tend to purchase. This is best described as an example of

When collecting data to conduct research, if the sample used is not random, ________ occurs.

Regression discontinuity is a method in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol.

Tatiana observes that all of her friends who have more than five tattoos also have more than five body piercings, and concludes that getting multiple tattoos makes people also get multiple piercings. Tatiana is

Sherrie owns a pickup truck and also owns a parrot. Therefore, we can conclude that there is a causal relationship between owning the pickup truck and the parrot for Sherrie.

Two variables are said to be positively correlated if their values

When computing p-values,

In a research project, when the sample used is not random, selection bias occurs.

If people who have children also tend to own dogs, we can say there is a positive correlation between having children and dog ownership.

When conducting a study on success rates, which of the following would most likely be subject to survivor bias?

When collecting data to conduct research, if the sample used includes only observations which have remained in the sample over time, making that sample unrepresentative of the broader population, ________ occurs.

Debbie realizes that her twin brother Dudley breaks out in hives every time he eats oysters, and concludes that when Dudley feels a case of hives coming on, he must get a craving for oysters. Debbie is

Related to the Economics in Practice on p. 727: Randomly granting vouchers by the Department of Housing and Urban Development was an effort to avoid the

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Filters