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Economics Chapter Overview
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Economics Chapter Overview

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Questions and Answers

Which of the following best represents an item classified as capital?

  • a carpentry lesson
  • an oil rig in the Atlantic Ocean
  • a computer (correct)
  • natural gas

    • What would an economist classify as an example of labor?

  • a carpenter's hammer
  • a singer's voice (correct)
  • a factory building
  • a car assembly line

    • Which of the following options is considered land in economic terms?

  • rich agricultural soil in Saskatchewan (correct)
  • a high school classroom
  • a collection of old automobiles
  • a donut production facility

    • Which of the following is not classified as capital?

    <p>a university professor</p> Signup and view all the answers

    Which of the following would economists recognize as a factor of production?

    <p>the skills of a welder</p> Signup and view all the answers

    What type of question does the museum address?

    <p>how</p> Signup and view all the answers

    How do different factors of production earn their income?

    <p>rent; wages; interest; profit</p> Signup and view all the answers

    The disparity between wealthy homeowners and the homeless illustrates which economic question?

    <p>for whom</p> Signup and view all the answers

    What does the income difference between a hockey star and a teacher exemplify?

    <p>for whom</p> Signup and view all the answers

    What encapsulates the essence of entrepreneurship?

    <p>the human resource that organizes labor, land, and capital</p> Signup and view all the answers

    What economic question does Sue's income compared to Chris's illustrate?

    <p>for whom</p> Signup and view all the answers

    What economic question is raised by the ownership of luxury cars by a star athlete versus public transportation use?

    <p>for whom</p> Signup and view all the answers

    How is financial capital best defined?

    <p>money, stocks, and bonds</p> Signup and view all the answers

    Which statements describe a positive assertion?

    <p>Statements 2 and 3 are positive</p> Signup and view all the answers

    Which option correctly identifies the true statement regarding the graphs in Figure 1A.1.1?

    <p>All four graphs indicate ways to represent data.</p> Signup and view all the answers

    Which graphs in Figure 1A.1.1 illustrate a scatter diagram?

    <p>(d)</p> Signup and view all the answers

    Which of the following statements is true about the time-series graphs in Figure 1A.1.1?

    <p>(b) and (c) illustrate time-series graphs.</p> Signup and view all the answers

    How did variable Y behave between 2004 and 2005 as per Figure 1A.1.2?

    <p>Increased more rapidly than in any other observed period.</p> Signup and view all the answers

    Which characteristic best describes the behavior of variable X over time as illustrated in Figure 1A.1.3?

    <p>An upward trend sometimes and a downward trend sometimes</p> Signup and view all the answers

    What describes the primary reason for increased air travel since September 11?

    <p>A rise in global tourism.</p> Signup and view all the answers

    What is the implication of the statement regarding drunk drivers?

    <p>They are the leading cause of accidents.</p> Signup and view all the answers

    The most effective way to depict data on average grades for economics students across different classes at a specific time is through a

    <p>cross-section graph</p> Signup and view all the answers

    In a time-series graph, the x-axis typically measures ________ and the y-axis measures ________.

    <p>time; the variable of interest</p> Signup and view all the answers

    The general tendency for a variable to consistently move in one direction is referred to as a

    <p>trend</p> Signup and view all the answers

    What type of graph best illustrates the behavior of a single economic variable over time?

    <p>time-series graph</p> Signup and view all the answers

    Which of the following types of graphs can potentially mislead the audience?

    <p>all of the above</p> Signup and view all the answers

    A cross-section graph displays values of a variable for

    <p>different groups or categories at a particular point in time</p> Signup and view all the answers

    Which of the following is NOT typically measured in a time-series graph?

    <p>the relationship between two variables</p> Signup and view all the answers

    Figure 1A.1.5 illustrates examples of which type of graph?

    <p>scatter diagrams</p> Signup and view all the answers

    Which graph would represent the relationship where higher levels of interest rates lead to lower levels of house sales?

    <p>Graph (a)</p> Signup and view all the answers

    If the theory predicted that an increase in wages results in a higher supply of labor, which graph should be selected to illustrate this relationship?

    <p>Graph (d)</p> Signup and view all the answers

    Which of the following graphs displays a positive correlation between two variables?

    <p>Graph (b)</p> Signup and view all the answers

    What is depicted by a negative correlation between two variables in one of the graphs?

    <p>Graph (a)</p> Signup and view all the answers

    Which graph would adequately illustrate the relationship where profits are low at low and high production levels but high at medium production levels?

    <p>None of the graphs</p> Signup and view all the answers

    Which curve in the graph displays no correlation between unemployment and inflation?

    <p>None of the curves</p> Signup and view all the answers

    If you needed to represent a theory where inflation decreases as unemployment decreases, which graph would be suitable?

    <p>Graph (c)</p> Signup and view all the answers

    Which statement best describes the outcome of increasing profits with a specified range of production?

    <p>Profits fluctuate based on production levels.</p> Signup and view all the answers

    Study Notes

    The Two Big Economic Questions

    • The "how" question is about the factors and methods of production.
    • In an economy, land, labor, capital, and entrepreneurship are factors of production.
    • Land earns rent; labor earns wages, capital earns interest, and entrepreneurship earns profit.
    • The "for whom" question addresses the distribution of goods and services.
    • The “for whom” question highlights the issue of inequality in the distribution of income and wealth.
    • Financial capital refers to money, stocks, and bonds, which are used to fund businesses and generate income.

    Economics as Social Science and Policy Tool

    • Positive statements are objective and can be tested, while normative statements involve value judgments.
    • The study of economics involves both positive and normative statements.
    • Economics can be used to help make policy decisions, but it is not a perfect tool for predicting the future.

    Graphing Data

    • Graphs are a powerful tool for visualizing economic data.
    • Time-series graphs show the value of a variable over time.
    • Cross-section graphs show the values of a variable for different groups at a point in time.
    • Scatter diagrams show the relationship between two variables.
    • A trend is the general tendency for a variable to move in one direction.
    • Graphs can be misleading if they are not presented accurately or interpreted correctly.

    Graphs Used in Economic Models

    • A positive relationship between two variables means that they move in the same direction.
    • A negative relationship between variables means that they move in opposite directions.

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    Related Documents

    chapter 01.doc.pdf

    Description

    This quiz covers fundamental economic concepts including the two big economic questions of production methods and distribution. It also discusses the role of economics as a social science and policy tool, along with the importance of graphing data for analysis. Test your understanding of these essential topics in economics.

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