Q: If your wage with 13 years of education is $$15 per hour and each additional year of education increases your wage by 10%, what will your wage be after 4 more years of education? Use the formula W = 15$$ \times (1.1)^n$$ where n$ is the number of additional years.

$$W = 15 \times (1.1)^4$ = 21.9615$$

Question 1

Which of the following best describes the purpose of a model in economics?

Accepted Answer

A model is a simplified description of reality used to explain and predict economic phenomena.

Question 2

Suppose the average wage for a high school graduate is $$39,152 and for a college graduate is 56$$,182. What is the percentage increase in wages from high school to college, and how does it compare to the model prediction of a 46% increase?

Accepted Answer

The increase is 43.5%, which is close to the model prediction of 46%.

Question 3

If your wage with 13 years of education is $$15 per hour and each additional year of education increases your wage by 10%, what will your wage be after 4 more years of education? Use the formula W = 15$$ 	imes (1.1)^n$$ where n$ is the number of additional years.

Accepted Answer

$$W = 15 	imes (1.1)^4$ = 21.9615$$

Question 4

Which of the following statements about correlation and causation is correct?

Accepted Answer

Correlation means two variables move together, but it does not necessarily mean one causes the other.

Question 5

What is an example of a spurious correlation based on the provided study materials?

Accepted Answer

US spending on science, space, and technology correlates with suicides by hanging, strangulation, and suffocation.

Question 6

Why might the mean not be an accurate measure of central tendency in a highly skewed income distribution?

Accepted Answer

The mean can be distorted by extremely high or low values, making it unrepresentative of the typical value.

Question 7

In the context of the scientific method in economics, what is the primary role of data?

Accepted Answer

To evaluate the accuracy of models and understand how the world works.

Question 8

Suppose you observe a positive correlation between the number of films a certain actor appears in and the number of people who drown in pools. What is the most likely explanation?

Accepted Answer

This is an example of spurious correlation.

Question 9

Which of the following is an example of reverse causality?

Accepted Answer

Assuming that healthier seniors are more likely to exercise, rather than exercise causing better health.

Question 10

Given the equation $$Y = 5 + 2X$$, what is the value of $$Y$$ when $$X = 4$$?

Accepted Answer

Question 11

If the sum of two numbers is 385 and their difference is 97, what are the two numbers?

Accepted Answer

241 and 144

Question 12

A fishing boat brings in 5,000 pounds of fish, consisting of cod ($$x$$ pounds at $$2.00/lb) $$and haddock ($$y$$ pounds at $$1.50/lb). $$The total revenue is $9,000. Which system of equations represents this scenario?

Accepted Answer

$$x + y = 5,000$$ and $$2x + 1.5y = 9,000$$

Question 13

Which of the following best explains why experiments are difficult to conduct in economics?

Accepted Answer

Because it is often not possible or ethical to randomly assign people to treatment and control groups.

Question 14

What is the opportunity cost of attending university full-time for 28 weeks per year, 50 hours per week, at a minimum wage of $17.60 per hour?

Accepted Answer

$24,640

Question 15

Which of the following is NOT a reason why correlation does not imply causality?

Accepted Answer

Direct causation is always present

Question 16

If the average wage for Canadians aged 30-34 with no certificate, diploma, or degree is $$31,778, and with a university degree is 56$$,182, what is the percentage increase in wages?

Accepted Answer

$$(56,182 - 31,778)/31,778 \approx 76.8\%$$

Question 17

Which of the following best describes the median in a data set?

Accepted Answer

The value that divides the data set into two equal halves.

Question 18

What is the slope $$B in $$the equation $$Y = A + BX if$$ $$A = 5$$ and $$Y = 15$$ when $$X = 5$$?

Accepted Answer

$$B = 2$$

Models, Data, and the Scientific Method in Microeconomics

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