Liberty University ECON 213 InQuizitive chapter 2 complete solutions correct answers updated

Liberty University ECON 213 InQuizitive ch. 2 complete solutions correct answers A+ work

Chapter 2: Model Building and Gains from Trade

What methods may an economist use to test a hypothesis?

Apply the appropriate label to each pair of variables.

team t-shirt sales and the winning percentage of the team, seat belt use and car crash fatalities, ice cream sales and temperature, rainfall and number of visitors at a golf course

The figure shows the production possibilities frontier for an economy that produces only two goods, pizzas and wings. Label each point in the figure with the appropriate description

not currently possible, efficient mix of both pizza and wings, maximum wings, maximum pizza, inefficient mix of both pizza and wings

Drag each formula to the part of the graph where it would be most useful.

area = one-half1212 × height × base, area = height × base, slope = StartFraction change in y Over change in x EndFractionchange in ychange in x

Each box below describes a relationship between two variables that has been interpreted incorrectly. Apply the appropriate label to each mistake.

Drinking a lot of water leads to sunburn. People who visit the dentist are more likely to get a cavity. Cars that mechanics work on regularly are more likely to break down. People become tired when they wear athletic clothes.

What were the key factors that made the Wright brothers’ wind tunnel a useful tool for wing design?

allowed measurement of wing performance, enabled independent control of each key variable, could be used without prior knowledge of aerodynamics, included an element of unpredictability

Assume that an economy produces only two goods, pizza and wings. Place the events in order, to show how an improvement in pizza-making technology would lead to an increase in wing production.

Calculate the slope of the curve between points B and C.

In the figure, PPF₁ represents society today and PPF₂ represents society in the future, after a period of technological progress. Click on the two sections of PPF₁ associated with the biggest expansion of PPF₂.

What simplifying assumption would explain the straight-line appearance of the PPF in the figure?

The production resources are fixed even if their use changes.

Society naturally produces at full capacity.

Correlation does not always indicate direct causation

Which numbers would be used to calculate Mike Piazza’s opportunity cost for producing wings?

The figure shows an increase in resources that shifts the production possibilities frontier from PPF₁ to PPF₂. For someone producing only wings, what is the change in opportunity cost compared with producing only pizza?

Fill in the blanks to complete the passage about positive and normative statements. A       statement can be tested and validated by gathering     . By contrast, a       statement is assessed in light of        and opinions.

In A Knight’s Tale, three friends are deciding what to do with 15 silver coins they won in a jousting tournament. They can spend their winnings immediately and live the good life for a while, or they can spend the money on training for the next tournament. They ultimately decide to spend most of the winnings on training for the next tournament. What does their decision represent? More than one choice may be correct.

Which country is a good example of a high present rate of investment and a low present rate of consumer goods consumption?

Click on the region of the figure that best fits this description: Making more pizzas has a very high opportunity cost.

Interpret the time-series graph below to determine the five-year time span in which the inflation rate changed the most.

A health club membership could be considered a form of investment

Which of the following types of graphs would be appropriate for data about a single variable?

Which of the following is not a characteristic of a good economic model?

By comparing opportunity costs and gains from trade for two parties each making the same two goods, one can determine the exact exchange ratio at which the parties should agree to trade.

In one month, Mikhail’s Furnishings can make 160 carpets or 160 quilts, while Dominique’s Parlor can make 120 carpets or 200 quilts. Currently, Mikhail’s is making 80 carpets and 80 quilts per month while Dominique’s is making 60 carpets and 100 quilts. If from now on Mikhail’s starts making nothing but carpets and Dominique’s makes nothing but quilts, and the two shops trade 90 quilts from Dominique’s for 70 carpets from Mikhail’s every month, what will be each shop’s gain from trade? Answer the question by matching gains to shop.

Which graph might represent the relationship between rainfall and raincoat sales?

Fill in the blanks to complete the passage about trade-offs. It is characteristic of       goods that they are not used up in the short run. A society can choose to        some quality of life now—fewer consumer goods—in order to build up its stock of capital goods. This will lead to a         —and more consumer goods—later on.

People become tired when they wear athletic clothes. Drinking a lot of water leads to sunburn. Cars that mechanics work on regularly are more likely to break down. People who visit the dentist are more likely to get a cavity.

Which of the following statements is normative rather than positive?

Fill in the blanks to complete the passage about gains from trade. To have          advantage means to be able to produce more using the same resources. To have            advantage means to have a lower        . Comparative advantage is the basis for          . It is          for one producer to have a comparative advantage for every good.

Dinesh notices that many people with gym memberships are overweight. He concludes that gym memberships make people gain weight. What is the error in Dinesh’s thinking?

A bar graph is usually the best choice for graphing one variable to show proportions.

What is the opportunity cost of moving from point A to point C? Give your answer as a number followed by a type of item.

An economic model is always a simplification.

What Latin phrase means “other things being equal”?

When a society moves from point A to point B along PPF₁, the result is that PPF₂ expands as shown. What phenomenon does this represent?

Fill in the blanks to complete the sentence about the law of increasing opportunity cost. According to the law of increasing opportunity cost, as a society      more and more of a certain good, further production       involve ever-greater opportunity costs, so that producing the good is associated with greater and greater        .

Attach the appropriate label to each specific good.

1.

Assume that an economy produces only two goods, pizza and wings. Which are ways to increase the maximum possible number of pizzas produced?

2.

Calculate the slope of a line passing through point A at (2, 1) and point B at (4, 2). Calculate to one decimal place.

5.

Homer notices that he gains more weight if he eats more doughnuts. 

There is a ______ correlation between the number of doughnuts Homer eats and his weight. If Homer wants to lose weight, he should eat ____ doughnuts. If Homer graphed this relationship on a scatterplot, an increase on the y axis would lead to ______ on the x axis.

6.

In one day, Al's Furniture can make 3 tables or 4 chairs, while BIG Furniture Warehouse can make 20 tables or 30 chairs. Match the concept to the description.

7.

In one month, Mikhail's Furnishings can make 160 carpets or 160 quilts, while Dominique's Parlor can make 120 carpets or 200 quilts. Currently, Mikhail's is making 80 carpets and 80 quilts per month while Dominique's is making 60 carpets and 100 quilts. If from now on Mikhail's starts making nothing but carpets and Dominique;s makes nothing but quilts, and the two shops trade 90 quilts from Dominique's for 70 carpets from Mikhail's every month, what will be each shop's gain from trade?

8.

In one week, Jedidiah Schlepp can produce 24 gizmos or 20 whatsits. What is the opportunity cost ratio, in gizmos per whatsit? Give the answer to one decimal place.

9.

In one year, Wynn Debbler can make 90 pairs of trousers or 30 coats, while Peg Michaels can make 100 pairs of trousers or 30 coats. They discuss an arrangement in which Peg gives Wynn trousers in exchange for coats, so that they both benefit. Which arrangements should be acceptable to both Wynn and Peg?

10.

Fill in the blanks to complete the sentence about model failure in the Great Recession. Leading up to the Great Recession, a major problem with computer models used by – to predict the performance of – was that the models were designed to assume that real estate – would always –.

11.

Mike and Debra are the only producers in an economy with two goods, wings and pizza. What is wrong with the following statement?

"Whether Mike should make pizza or wings depends on which he is better at making"

12.

Natalia notices that if she does not sleep a lot at night, she feels tired the next day. What relationship (if any) exists between hours of sleep and degree of exhaustion?

13.

Place the steps that make up the scientific method in their proper order.

14.

A production possibilites frontier is a _____ summarizing the different ways a society's _____ could be used ______, assuming those resources _______

15.

A pro football quarterback has to move to a new house. What would be a good economic reason for him to do his own moving rather than hiring someone else?

16.

Reverse causation or omitted variable?

17.

A community of woodworkers produces tables and chairs. If five new members join who specialize in chairs, the community will be able to produce both more tables and more chairs because the increase in labor resources has shifted the entire PPF upward and outward.

19.

Fill in the blanks to complete the passage about consumer goods and capital goods. Trade-offs between the – and the future require weighing the –available today against what will be available tomorrow. A good produced for present – is a – good; a good that will help in the production of other valuable goods for the – is a – good.

20.

What is the usual term for spending on infrastructure, production facilities, or anything else that will increase future production possibilities?

21.

When the Wright brothers designed their aircraft, they built a wind tunnel to model the aerodynamics of different wing designs. Identify each of the factors below as endogenous or exogenous to the Wright brothers' model

22.

Which statement is normative rather than positive?

23.

Which type of graphs would be appropriate for date about a single variable?