Question :
1.3 Economic Models
1) Economic models
A) make no assumptions in order : 1388092
1.3 Economic Models
1) Economic models
A) make no assumptions in order to remain as accurate as possible.
B) are simplified versions of reality.
C) can not be used to analyze real-world issues.
D) magnify the complexity of economic issues in order to provide useful data.
2) Which of the following is part of an economic model?
A) assumptions
B) norms
C) opinions
D) preferences of economic agents
3) Which of the following statements about positive economic analysis is true ?
A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions.
B) There is much less disagreement among economists over normative economic analysis than over positive economic analysis.
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis.
D) Unlike positive economic analysis, normative economic analysis can be tested.
4) Which of the following is a positive economic statement?
A) Everyone should live at the same standard of living.
B) If the price of gasoline rises, a smaller quantity of it will be bought.
C) The government should close income tax loopholes.
D) U.S. firms should not be allowed to outsource production of goods and services.
5) Which of the following is a positive economic statement?
A) People should not buy imported fruits and vegetables.
B) The government should subsidize solar power for homeowners.
C) The minimum wage law causes unemployment.
D) The number of work visas should not be limited by the government.
6) Which of the following is a normative economic statement?
A) Rising global demand for diesel and heating oil has led to increases in the price of crude oil.
B) With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased.
C) The federal government is considering raising the gasoline tax to promote the use of public transportation.
D) Fashion designers should be allowed to copyright designs to promote innovation.
7) Which of the following is a normative economic statement?
A) The price of milk is too high.
B) The current high price of milk is the result of reduced worldwide supply.
C) When the price of milk rises, the quantity of milk purchased falls.
D) When the price of milk rises, the cost of milk-based products rises.
8) All of the following questions or statements regarding medical school are positive except:
A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose?
B) Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care.
C) What role does tuition play in a student’s decision about whether to attend medical school?
D) Have tuition increases had a large effect or a small effect on the number of applications to medical school?
9) The economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage:
a.The minimum wage law causes unemployment.
b.Unemployment would be lower without a minimum wage law.
c.Minimum wage laws benefit some workers and harm others.
d.The minimum wage should be more than $7.25 per hour.
Which of the consequences above are positive statements and which are normative statements?
A) a, b, and c are positive statements and d is a normative statement.
B) a and b are positive statements, c and d are normative statement.
C) Only a is a positive statement, b, c and d are normative statements.
D) a and c are positive statements, b and d are normative statements.
10) Which of the following is part of an economic model?
A) preferences of economic agents
B) data
C) norms
D) opinions
