Microecon chapter 2

Question 1

Normative statement

Answer 1

What ought to be

Question 2

Positive statement

Answer 2

What actually is, was or will be

Question 3

Where economists work (5)

Answer 3

• Government
• Private businesses
• Crown corporation
• Non-profit org
• Post-secondary school

Question 4

Theory

Answer 4

abstraction of reality

Question 5

Theory consists of… (3)

Answer 5

• Variables
• Assumptions
• Predictions

Question 6

Endogenous variable

Answer 6

Dependent, can be explained within a theory

Question 7

Exogenous variable

Answer 7

Independent, outside a theory

Question 8

The variables that interest economists are generally influenced by…

Answer 8

Forces that vary simultaneously

Question 9

Positive correlation

Answer 9

X and Y move in the same direction

Question 10

Negative correlation

Answer 10

X and Y move in opposite direction

Question 11

Is correlation a direct evidence of causal relation ship?

Answer 11

No

Question 12

Randomized controlled trials (RCT) approach

Answer 12

Helps determine underlying causality among economic variables

Question 13

Value of a base period

Answer 13

100

Question 14

CPI formula

Answer 14

(Absolute value in given period / Absolute value in base period) x 100

Question 15

Basic forms of single economic variable (2)

Answer 15

• Cross-sectional data
• Time-series data