Question 1

Which of the following best describes a positive (direct) relationship between two economic variables on a graph?

Accepted Answer

As one variable increases, the other variable also increases.

Question 2

Suppose the price of ice cream is held constant at $2.75 per scoop. If the temperature increases from 21°C to 32°C, what happens to the quantity of ice cream consumed, according to the ceteris paribus assumption?

Accepted Answer

The quantity consumed increases.

Question 3

What is the formula for the slope of a straight line in economic graphs?

Accepted Answer

$$ Slope = \frac{\Delta y}{\Delta x} $$

Question 4

A scatter diagram is most useful for which of the following purposes in economics?

Accepted Answer

To determine whether a relationship exists between two variables.

Question 5

If a graph shows that as the unemployment rate increases, the inflation rate decreases, what type of relationship is this?

Accepted Answer

Inverse (negative) relationship

Question 6

In a two-variable graph, what is the point called where both axes meet at zero?

Accepted Answer

The origin

Question 7

Which of the following is an example of holding a variable constant (ceteris paribus) in economic analysis?

Accepted Answer

Holding the price of ice cream constant while examining the effect of temperature on quantity consumed.

Question 8

If the slope of a straight line is negative, what does this indicate about the relationship between the two variables?

Accepted Answer

They move in opposite directions.

Question 9

Given two points on a line: Point A $$(x_1$, y_1$)$$ and Point B $$(x_2$, y_2$)$$, what is the correct formula for calculating the slope between these points?

Accepted Answer

$$ Slope = \frac{y_2$ - y_1$}{x_2$ - x_1$} $$

Question 10

Which of the following best describes a relationship that has a maximum or a minimum?

Accepted Answer

The relationship is positive over part of its range and negative over another part.

Question 11

If a scatter diagram of inflation and unemployment in Canada from 2006 to 2021 shows no clear pattern, what can you conclude?

Accepted Answer

The variables are unrelated.

Question 12

When plotting the relationship between the price of ice cream and quantity consumed at a constant temperature, what does a movement along the curve represent?

Accepted Answer

A change in the price of ice cream.

Question 13

Which of the following is true about the average slope of a curved line across an arc?

Accepted Answer

It is equal to the slope of a straight line joining the two endpoints of the arc.

Question 14

If a movie's production budget and its box office revenue are plotted on a scatter diagram and there is no clear pattern, what does this suggest?

Accepted Answer

There is no relationship between the two variables.

Question 15

Which of the following statements about ceteris paribus is correct?

Accepted Answer

It means holding all other relevant variables constant.

Question 16

Suppose you are analyzing the effect of income on expenditure using a scatter diagram. If the points form a close upward-sloping pattern, what does this indicate?

Accepted Answer

There is a strong positive relationship.

Question 17

If the slope of a curve at a point is calculated using the tangent, what does this represent?

Accepted Answer

The slope at that specific point.

Question 18

Which of the following is NOT a possible pattern to look for in economic graphs?

Accepted Answer

Variables always have a linear relationship.

Question 19

In a real-world scenario, if the price of a product increases and the quantity demanded decreases, what type of relationship is this?

Accepted Answer

Inverse (negative) relationship

Question 20

If you want to analyze the effect of three variables (such as price, quantity, and temperature) on ice cream sales, what technique would you use to graphically represent the relationship between two of them?

Accepted Answer

Hold the third variable constant (ceteris paribus) and plot the relationship between the other two.

Graphs and Relationships in Microeconomics: An Introduction to Economic Data Analysis

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