‘Name: Chass: Chapter 1- Set B FruciFalse Indicate whether the statement is true or false. 1. The high uncmployment of 2008-2010 caused a substantial deorease in inflation which created 2, The concept of economic efficiency refers tothe size ofthe “economic pie” whereas the concept of equality refers to how the “pie” is distributed. 3. ‘The achievement of greater efficiency in the United States has been at the expense of growing inequality Mattiple Choice Date: wa 4, The United States has been willing to trade off greater efficiency for greater wage equality 5. Economic efficiency and income equality are often conflicting goals in an economy. 6. Lower inflation rates are usualy correlated with ower nmemplogment rates Ldentiy the chotce that best completes the statement or answers the question. 7. ‘Throughout the 1980s, accounting departments in USS. universities were unable to fill many available faculty positions. This fact suggests that salaries oflered by these departments a. suffered from the cost disease ofthe service sector, 'b. were below the market price for qualified accountants. 4. failed to reflect productivity growth in teaching 8. ‘The principle of comparative advantage explains how one nation can take advantage of another one ', two nations may engage in mutually beneficial trade, even though one of them is more productive than the other. one individual can take advantage of another ‘hrouzh international trade. 4. some people are good at producing everything, “while others have no comparative advantages © some nations end up with large trade surpluses. 9, The United States produces both automobiles and computers more efficiently than Mexico, Nevertheless, it is possible that both nations ‘would benetit from trade in these items, ‘Te reason for this is 2 the law of comparative advantage, b. the inflation-unemployment trade-off, &extemalities the cost disease of personal rervices attempts to repeal the law of supply and demand. 10, When a teacher in private school points out to her high school principal that since there are additional students is really zero, s a law of comparative advantage. principle of marginal analysis, theory of extemalities. 4d. notion of the cost decreases ofthe service sector. concept of opportunity cost 11, When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis i that of 4 extemalives, b. equality-efficiency trade-off. © comparative advantage. the cost decrease of the service sector. © the cast disease of personal services. is using theName: 12, 14 15, In Egypt, in 1970, the Aswan Dam was 16 completed. By preventing the annual flood ofthe Nile (thereby providing millions of acres of arable land) and by providing elecricity, dhe dam was ‘expected to raise the living standard of the Egyptian people-and it has. However, it has also {ed to arise in the water table which causes Egypts limestone structures, including the prvramids 9 ahcorh more eat water and to fFer serious erosion from crystallized salts. Combined ‘with ar pollution and traffic vibration, this crosion is tuning the pyramids to dust. Economists analyze this type of problem with the concept of ‘an externality the antiquity problem, a firce-ider problem, the public good problem. the trade-off between equity and output ‘What is the appropriate degree of abstraction? ‘The more dett avoid all complexity. Abstraction is unnecessary, and should be avoided 4. Abstraction isthe essence of analysis, and is pursued for its own sake. .Ttdepends on the objective of the analysis, “Assume that all individuals have perfect information about prices now and in the future, that they have identical tastes, that all markets are competitive, and that there is no government.” ‘This statement is indicative of how economists spply the law of supply and demand. employ marginal analysis. sate prevented from getting correct answers, abstract for analytic purposes. use realistic assumptions to develop theory. A thcory can best be defined a an untested assertion of untested fact. ». scollection of assumptions that simplily the real world, & an opinion of a reliable person who studies a subject or discipline 4. a deliberate simplification of factual rtionchins that attempts ta exiin how Hoe relationships work. the body of knowledge that has been scientifically verified by the scientific community. pppoe iD: A. Economie theory isa deliberate simplification of factual relationships b. seeks to disprove a hypothesis, ©. is based mainly on assumptions. 4. _secks to prove political ideals. ‘The slope of a curved line differs fiom that of a straight line in that ‘a. the numerical value of the slope of a straight Tine is different at every point, but isthe same at ‘every point fora curved line. the numerical value ofthe slope of straight line is always higher than the numerical value of the slope of a curved fine ©. the numerical value ofthe slope of a curved line is different at every point, but isthe same at ‘every point fora straight line ‘the numerical value of the slope of curved line isan irrational number, bt the numerical value of the slope of a straight line is always a rational number straight lines are more realistic, but curved lines are not descriptively accurate forthe real world, When variable 4 rises by 10 units, variable B rises ‘by 15 units. The slope of the line describing this relationship a always 28. bi. cither 2/3 or 1.5, depending on which variable {goes on which axis of the graph, © either 1.5 or -1.5, depending on which variable goes on which axis. 4. always=15 Which of the following mathematical expressions represents the equation of a straight line with a slope of zero a all points on a grapla with F om the vertical axis and X'on the horizontal axis? +X