Chapter 1: Q 1.4 (page 1)
Explain why economics is a science.
Economics is considered a science because it considers the cause and effect relationship and is based on predictions and assumptions.
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Under the rationality assumption, could a woman potentially take into account her family's welfare as well as her own when considering having another child? Explain your reasoning.
For each of the following items, state whether a direct or an inverse relationship is likely to exist.
(a) The number of hours you study for an exam and your exam score.
(b) The price of pizza and the quantity purchased.
(c) The number of games the university basketball team won last year and the number of season tickets sold this year.
Consider the following statements, based on a positive economic analysis that assumes that all other things remain constant. For each, list one other thing that might change and thus offset the outcome stated.
(a) Increased demand for laptop computers will drive up their price.
(b) Falling gasoline prices will result in additional vacation travel.
(c) A reduction of income tax rates will result in more people working.
Given the function , complete the following schedule and plot the curve.
| y | x |
| -4 | |
| -2 | |
| 0 | |
| 2 | |
| 4 |
Distinguish between Normative and Positive Economics.
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