ECN 2020- Final Exam Guide - Comprehensive Notes for the exam ( 99 pages long!)

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5 Dec 2017
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NSU
ECN 2020
FINAL EXAM
STUDY GUIDE
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SET 1
It always rains about an hour after you finish washing your car. Concluding that washing your
car caused it to rain is an example of the
post hoc, ergo propter hoc fallacy
You own the Star Wars six DVD set. The opportunity cost of watching these DVDs for the
second time
is the value of the alternative use of the time you spend watching the DVDs
An economist wants to understand the relationship between minimum wages and the level of
teen age unemployment. The economist collects data on the values of the minimum wage and the
levels of teenage unemployment over time. The economist concludes that 1% increase in
minimum wage causes a 0.2% increase in teenage unemployment. From this information he
concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to
increase employment among teenagers.
The statement, "the minimum wage is harmful to teenagers and should be reduced or eliminated
to increase employment among teenagers," is an example of
normative economics
Which field of economics deals primarily with the problems faced by low-income countries?
economic development
You have decided that you want to attend a costume party as Ironman. You estimate that it will
cost $40 to assemble your costume. After spending $40 on the costume, you realize that the
additional piece you need will cost you $25 more. The marginal cost of completing the costume
is
$25
If you can buy 9 DVDs for $126 or you could buy 10 DVDs for $130, then the marginal cost of
the 10th DVD is
$4
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Better insurance benefits increase the incentive of some individuals to work. This statement is
best described as a
positive statement
An economist wants to understand the relationship between minimum wages and the level of
teen age unemployment. The economist collects data on the values of the minimum wage and the
levels of teenage unemployment over time. The economist concludes that 1% increase in
minimum wage causes a 0.2% increase in teenage unemployment. From this information he
concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to
increase employment among teenagers.
The statement that a !% increase in the minimum wage causes a 0.2% increase in teenage
unemployment is an example of
positive economics
Statistics tells us that ice cream sales increase during the summer months. It is also the case that
reported burglaries increase during the same period. We can conclude, therefore that increased
ice cream sales cause an increase in burglaries.
The conclusion of this statment
falls victim to "post hoc, ergo propter hoc"
A formal statement of theory, usually a mathematical statement of a presumed relationship
between two or more variables, is called a _______. A ________ can change over time or across
observations.
model
variable
The importance of the ceteris paribus assumption when using models is that
it allows researcher to isolate the effect of one event on anther without the influence of outside
variables
T/F: Resources are unlimited in a wealthy society.
False
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