Exam 1: What Is Economics?

Throughout the 1980s, accounting departments in U.S.universities were unable to fill many available faculty positions.This fact suggests that the salaries offered by these departments

An externality is defined as

A useful economic model

Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation.

One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie".

How does correlation differ from causation? Give an example of each to illustrate your answer.

As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.

In economics the true cost of making a choice is the value of what must be given up.

What is the appropriate degree of abstraction?

A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning.

A graph with a positive slope indicates that the variables depicted on the axes move in the same directions.

An article in a recent economics periodical asks the question: "Is low inflation worth it?" By "it," the article probably means

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

Opportunity cost is the highest possible price you can receive when you sell an object.

"Correlation" is a measure of how one variable causes another to change.

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

During one winter quarter at Frozen U., snow falls every Friday night.Students assume that, on their campus, Fridays cause snow.This hypothesis

Which of the following is one source of disagreement between economists?

One of the consequences of allowing wages to fall in the United States has been growing wage inequality.

The process of focusing on only the most important factors to explain a phenomenon is called