Question 1

Which of the following best describes a scatter diagram in economics?

Accepted Answer

A graph that shows the relationship between two variables by plotting individual data points for each observation.

Question 2

Suppose you are analyzing the relationship between the price of ice cream and the quantity consumed at different temperatures. If you hold the temperature constant and vary the price, what are you illustrating?

Accepted Answer

A movement along the demand curve.

Question 3

If two variables move in the same direction, what type of relationship do they have, and how is it represented on a graph?

Accepted Answer

A positive (direct) relationship, represented by an upward-sloping line.

Question 4

Given the following data points on a straight line: $(x_1, y_1) = (2, 4)$ and $(x_2, y_2) = (6, 12)$, what is the slope of the line?

Accepted Answer

$2$

Question 5

Which of the following is an example of a negative (inverse) relationship in economics?

Accepted Answer

As the price of a product increases, the quantity demanded decreases.

Question 6

If a graph shows a curve that first rises and then falls, what kind of relationship does it represent?

Accepted Answer

A relationship with a maximum.

Question 7

What does the term 'ceteris paribus' mean in economic analysis?

Accepted Answer

"All other relevant things remain the same."

Question 8

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

Accepted Answer

As one variable increases, the other decreases.

Question 9

Suppose the average income in Canada increases from $50,000 to $55,000, and average expenditure increases from $34,000 to $37,000. What is the average slope of the relationship between income and expenditure over this interval?

Accepted Answer

$\frac{37,000 - 34,000}{55,000 - 50,000} = 0.6$

Question 10

Which of the following best describes a situation where two variables are unrelated?

Accepted Answer

A scatter diagram shows no discernible pattern between the variables.

Question 11

In a real-world scenario, if the temperature increases and the quantity of ice cream consumed at each price also increases, what happens to the demand curve for ice cream?

Accepted Answer

The demand curve shifts to the right.

Question 12

Which formula correctly represents the slope of a line in economics?

Accepted Answer

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

Question 13

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

Accepted Answer

There is no relationship between inflation and unemployment during this period.

Question 14

Which of the following is an example of a nonlinear relationship in economics?

Accepted Answer

A curve that has a maximum or minimum point.

Question 15

If the slope of a curve at a specific point is needed, how is it determined?

Accepted Answer

By finding the slope of the tangent line at that point.

Question 16

A movie's production budget and its box office revenue are plotted on a scatter diagram, but there is no clear upward or downward trend. What does this indicate?

Accepted Answer

There is no clear relationship between production budget and box office revenue.

Question 17

If you want to analyze the effect of both price and temperature on ice cream sales, but can only graph two variables at a time, what economic principle are you applying?

Accepted Answer

Ceteris paribus, holding one variable constant while analyzing the relationship between the other two.

Question 18

Which of the following statements about the origin on a two-variable graph is correct?

Accepted Answer

It is the point where both variables have a value of zero.

Question 19

If a line on a graph is horizontal, what does this indicate about the relationship between the variables?

Accepted Answer

The variable on the y-axis does not change as the variable on the x-axis changes.

Graphs and Relationships in Microeconomics: Appendix Study Notes

Study Guide - Practice Questions

Study Guide - Flashcards