Exam 1: The Nature of Economics

Professor's economics students are constructing models for how gasoline prices change. Maria's model has very realistic assumptions and is quite complex. Anna's model is less complicated and less realistic. Maria's model correctly predicts gas price increases 5% of the time. Anna's model predicts correctly 15% of the time. On the basis of usefulness or "goodness," Professor will give which student's model the higher grade and why?

Behavioral economics deals with

A positive economic statement is one that

The impact of an increase in the gasoline tax on SUV sales is

The assumption that nothing changes except the variables being studied is

It has been noted that when the price of a good increases, people purchase less of the good. This is an example of

Consider the statement, "The number of beers consumed the night before a test affects the grade." In this statement

"To be useful, a model must be completely realistic." Evaluate.

Normative economic analysis involves

Which of the following would NOT provide an incentive to reduce the amount of beef consumed?

The assumption that "other things are constant" is also known as the

Macroeconomics deals with

All of the following are positive statements EXCEPT

The relationship between the number of hours a student studies for an exam and the exam grade is most likely graphed as

Both the social sciences and the natural sciences employ ________ to help them understand the world around them.

Macroeconomics is best defined by which of the following statements?

Which of the following is a statement with positive economic analysis?

All of the following are aspects of microeconomics EXCEPT

High gasoline prices give people all of the following incentives EXCEPT

Aggregate measures are