The other-things-constant assumption (Multiple Choice)

The other-things-constant assumption
 a. allows the economist to make useful predictions
  b. is a prediction
  c. applies only to consumers' decisions, not to those of firms
  d. forces the economist to ignore reality, where things are constantly changing
  e. implies rational self-interest on the part of all economic actors

QUESTION 2

Which of the following is an accurate list, in order, of the steps of the scientific process?
 a. define variables; state assumptions; form a hypothesis; test
  b. state assumptions; define variables; form a hypothesis; test
  c. identify variables; state assumptions; test; form a hypothesis
  d. identify variables; form other things equal assumptions; form behavioral assumptions; test
  e. form other things equal assumptions; form behavioral assumptions; form hypothesis; test

QUESTION 3

Ceteris paribus means other things constant.
 a. True
  b. False

QUESTION 4

Economic theory
 a. expresses normative values
  b. invents imaginative and interesting stories
  c. predicts the behavior of a specific economic decision maker after an economic change
  d. predicts the average behavior of a group of similar economic decision makers after an economic change
  e. uses only perfect and complete information

QUESTION 5

A model that sometimes makes incorrect predictions may be used by economic decision makers
 a. under no circumstances
  b. only if its assumptions are detailed and realistic
  c. if it is mathematical and computerized
  d. if it is simple enough for a child to understand
  e. until a better model is developed

QUESTION 6

An economic model is useful if it
 a. includes every detail of reality
  b. involves no unproven assumptions
  c. is expressed in equations
  d. makes accurate predictions
  e. is simple enough to be understood by a child

QUESTION 7

Economics employs a scientific methodology. In part, this means that
 a. all economic laws have been proven true by laboratory tests
  b. there is a single economic theory accepted by all economists
  c. economic hypotheses are tested to determine their validity
  d. personal values never enter into economic policy recommendations
  e. assumptions are not necessary in economic science

QUESTION 8

All economic models must involve simplifications because
 a. economists would be unable to command high salaries if their models were so simple that anyone could understand them
  b. human behavior is very erratic and unpredictable
  c. reality is too complex to understand in its entirety, so we must reduce it to a level that we can understand
  d. they always try to duplicate all possible information and cover all possible variables that might influence decision making
  e. we must rely on value judgments and ignore reality

QUESTION 9

When constructing an economic model, economists
 a. rely mostly on their own value judgments and ignore the far more complex world of facts
  b. always try to duplicate reality by including all available information
  c. use assumptions that are true for the individual but never true for the whole economy
  d. must rely on simplifying assumptions that abstract from the complexity of the real world
  e. are primarily concerned with making realistic assumptions