Chapter 2 Flashcards
Indicate whether the following statements are positive or normative. Do this by inserting in each answer box either P (for
’positive’)
or N (for
’normative’).
The government should limit immigration _____
Lowering the price of tobacco leads to people to smoke more____
Higher income taxes reduce consumer spending_________
normative, positive, positive
Normative statements are based on:
A. the law, which may be quite different in various countries.
B. value judgements.
C. imaginary views of the world.
D. unrealistic expectations about some aspects of the economy.
E. judgements about what the world is like.
B. value judgements.
Economists have designed _____ to better explain and predict the behaviour we observe in the world around us.
theories
A variable, such as price or quantity, that is determined within a theory is known as an _______ variable. A variable that is determined outside the theory is known as an ________ variable.
**
endogenous, exogenous
In the following examples, identify the exogenous (or independent) variable and the endogenous (or dependent) variable.:
A. Corn production and rainfall.
The exogenous variable is _______, and the endogenous variable is________.
B. The world price of coffee and the price of a cup at Tim Hortons.
The exogenous variable is _________, and the endogenous variable is____________.
C. The quality of health care and longevity.
The exogenous variable is ________, and the endogenous variable is___________.
D. Snowfall and the number of skiers.
The exogenous variable is __________, and the endogenous variable is ____________.
A. rain fall, corn production
B. the world price of coffee, the price of a cup at Tim Hortons.
C. the quality of health care, longevity.
D. snowfall, the number of skiers
An exogenous variable is:
A. an independent variable
B. A variable that is explained outside a theory.
C. an autonomous variable
D. All of the above
D. All of the above
Observations on one variable taken across different households
at the same point in time constitute a data set known as __________ data.
A. household
B. time-series
C.static
D. cross-sectional
E. uniform
D. cross-sectional
Cross-sectional is a data fixed in time, but the location changes.
ex: House Prices for 10 canadian provinces in 2021
On a graph with Y on the vertical axis and X on the horizontal axis, the slope of a straight line is calculated as:
ΔΥ/ΔΧ
In the equation Y=500+4X, the vertical intercept is _____, Y and X are ________ related to each other, and the slope of this linear function is _____.
500, positively, 4
In the equation Y=12−0.2X, the vertical intercept is _______ Y and X are _______ related to each other, and the slope of this linear function is ____
12, negatively, -0.2
On a graph of a non-linear function with either a minimum or a maximum point, the slope at the minimum or maximum is _______, meaning that the marginal response to a change in the independent variable is ______.
zero, zero
Negatively related variables change such that as the value of one variable:
A. decreases, the value of the other variable decreases.
B. Increases, the value of the other variable increases.
C. decreases, the value of the other variable remains the same.
D. increases, the value of the other decreases.
E. increases, the value of the other variable remains the same.
D. increases, the value of the other decreases.
What is time series data:
A. Data collected from various sources at a single point in time.
B. Data gathered from observations over a period, typically at regular intervals.
C. Information obtained through surveys and questionnaires.
D. Data derived from experimental studies in controlled environments.
B. Data gathered from observations over a period, typically at regular intervals.
ex: The Canadian Unemployment rate between 1978 and 2021
What is panel data:
A. Data collected from various sources at a single point in time.
B. Data gathered from observations over a period, typically at regular intervals.
C. Information obtained through surveys and questionnaires.
D. Data derived from observations on multiple entities over time.
D. Data derived from observations on multiple entities over time.
mix of both cross-sectional and time-series data
What does an increasing marginal response imply?
A. Each additional unit of input contributes more to the output than the previous unit.
B. Each additional unit of input contributes less to the output than the previous unit.
C. The system is operating at full capacity.
D. The marginal response remains constant.
A. Each additional unit of input contributes more to the output than the previous unit
