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Review 1.Fill in the blanks accordance with meanings of the sentences, and 2 marks are to 1 blank. Please to write items into the blanks with each underline. (10%) 1Technological progress is an increase in output _ increasing inputs. without2A rising cost of living, _is called inflation, means a shrinking value of dollar. which;3Services are tasks performed for people such _ haircuts. as4Goods are physical objects such _ golf balls. as5Capital deepening is that increases in the stock of capital _ worker. per6Aggregate demand is the total demand for _ and services in an economy. goods7When production and jobs increase, the _ is in a business cycle expansion. economy (Answer only 5 items). Answer the following Yes-No questions and write only A or B into the front round brackets, each question is 1.5 marks. ( 30 %)( B ) 1. Distinguish the following sentence with the What, How and For Whom questions: What will the government do with its budget surplus? Who will get the budget surplus is a For What question. Is it OK? A. Yes B. No ( A ) 2. A good model is the basis of an economic theory. And the process of building and testing models creates theories. Are they true? A. Yes B. No( B ) 3.Economists derive and apply principles about economic behavior at the level: macro-micro economics GDP and economic well-being, environmental protection, business cycle and so on, they belong to microeconomics. Are they true? A. Yes B. No ( A ) 4. To discover how the economic world works, economists often distinguish between two types of statements: What is and What ought to be: The first It is called positive statement and the second is called normative statement. Our planet is warming because of the increasing pollution of burning coal and oil. Is it the first? A. Yes. Its positive statement. B. No. Its not. Its the second, normative statement. ( B ) 5. To control air and water pollution, the most direct action is specific tax. Is it OK? A. Yes B. NoA. Yes B. No( A ) 6. Natural scientist such as chemists can much more easily control experiments with great precision an assumed relationship between two variables. Economists have a much more difficult time trying to isolate key economic relationships. None the less the “other things equal assumption” is extremely important. Economists must test their theories using real world data, generated by the actual operation of economy. Under these conditions “other things” do change and despite sophisticated statistical techniques, controls are less than perfect. As a result economics principles are less precise than those of laboratory sciences. Are they true? A. Yes B. No( B ) 7. Suppose a scientist discovers a new way to treat a common disease, everyone suffering from the disease will be well. We called it as spillover costs from scientific. Is it OK? A. Yes B. No( B ) 8. The role of Policy Economics is used to systematically arrange facts, interpret them, and generalize from them. Is it true? A. Yes B. No ( B ) 9. Economists derive and apply principles about economic behavior at the Level: Demand and supply, price elasticity, consumer behavior such on such, they belong to macroeconomics. Are they true? A. Yes B. No( A ) 10. Consider a paper mill that dumps chemical waste into a river, and these wastes make the water unhealthy for drinking. The manager of paper firm decides how mach paper to produce, but some of the costs of producing paper are incurred by people who live in a city downstream from the mill. This is spillover costs. Is it true? A. Yes B. No( A ) 11. Economic models are general simplifications, which attempt to find the important connections and relationships of economic behavior. These models are useful precisely because they strip away the clutter and complexity of reality. They also call abstractions. Are they true? A. Yes B. No( A ) 12. The methods confront a polluter with the external cost of pollution and provide an incentive to seek new technologies that are less polluting. They are emission charges. Are they true? A. Yes B. No( B ) 13. The national output, adjusted for inflation, grew by 2 percent in 2000. This sentence indicates microeconomics. Is it OK? A. Yes B. No ( .B ) 14. The dogfood plant in the city laid off 150 workers last month. This sentence indicates macroeconomics. Is it OK? A. Yes B. No ( B ) 15. The spillover principle suggests that the costs or benefits of some decisions “spillover” onto people who are just involved in making those decision. Is it true? A. Yes B. No( A ) 16. Suppose the government carries out the methods that the firms with a low marginal cost of reducing pollution sell the rights of waste water and firms with a high marginal cost of reducing pollution buy them. They are marketable permits. Are they true? A. Yes B. No( B ) 17. The carrots that we face are marginal costs. Are they true? A. Yes B. No ( A ) 18. The economic perspective focuses largely on marginal analysis-comparisons of marginal primary ( social) benefits, MPB (MSB), and marginal primary (social) costs, MPC (MSC). Are they true? A. Yes B. No ( B ) 19. A consumer can obtain some utility from the consumption of one unit of a good or service. The value of this gain is that a changing amount in the part utility of consuming is divided by the change in other part consumed. That is marginal utility. Is it true? A. Yes B. No ( B ) 20. The dependent variable is the cause, and it is changing first. The independent variable is the effect, which changes because of the change in the independent variable. Are they true? A. Yes B. No ( B ) 21. The opportunity cost principle, competitive market, demand and supply model do not belong to important economic perspective. Are they true? A. Yes B. No ( B ) 22.The marginal principle is based on a comparison of the marginal benefits and marginal costs of a particular activity. It often expresses a persons feeling toward a good or service, so it is not a real, objective phenomenon. When youve reached the level where the marginal benefit equals the marginal cost, you get only the decisions of hypothesis. Is it OK? A. Yes B. No( A ) 23. Economic policy is to evaluate the options on the basis of specific criteria important to decision _ makers: looking at how well it worked. And because that “ the trouble with economic theory is that it is not practical. It is detached from the real world.” Are they true? A. Yes B. No( A ) 24. To discover how the economic world works, economists often distinguish between two types of statements: What is and What ought to be: The first It is called positive statement and the second is called normative statement. We should cut bake on our sue of burning coal and oil. Is it the first? A. No. Its not. Its the second, normative statement.B. Yes. Its positive statement. ( B ) 25. A less direct action is based on the fact legislation prohibiting or limiting pollutions are about a cost and therefore a determinant of a firms supply curve. Are they true? A. Yes B. No( B ) 26. What is model building? It is a description of some inside of the economic world. It is complex and has realness just as a true society. Model often uses mathematical in economics. Is it true? A. Yes B. No ( B ) 27. The role of economic theorizing or economic analysis is to be used to formulate policies. And it normally is applied to problems after they arise. Is it true? A. Yes B. No( B ) 28. The sticks that we face are marginal benefits. Are they true? A. Yes B. No( B ) 29. In the long run, the firm suffers from diminishing returns because workers have to share a production facility with more and more workers. There is no chance to duplicate the existing equipments. Are they true? A. Yes B. No( B ) 30. People do face the full costs and benefits of their action in market although there are the spillover costs and spillover benefits existed. Is it true? A. Yes B. No( A ) 31. Economic principles, theories or models are abstractions, simplifications, which attempt to find the important connections and relationships of economic behavior. These models are useful precisely because they strip away the clutter and complexity of reality. Are they true? A. Yes B. No ( B ) 32.Economic models are general simplifications, which attempt to find the important connections and relationships of economic behavior. These models are useful precisely because they strip away the clutter and complexity of reality. They also call terminology. Are they true? A. Yes B. No( B ) 33. In order to judge the affect one variable has upon another it is also necessary to hold other contributing factors variable. Natural scientists can test with much greater precision than can economists. They have the advantage of controlled laboratory experiment. Economists must test their theories as the same method. Are they true? A. Yes B. No ( A ) 34. We can not rely on unregulated markets to make decisions that are in the general interests of society because of spillover principals. Is it true? A. Yes B. No( B ) 35. Diminishing returns occur in the any shape of running because workers to an existing facility mean that each worker gets a smaller piece of the facility, and each becomes less productive. Are they true? A. Yes B. No( B ) 36.The macro-micro distinction means that economics is so highly compartmentalized that every topic can be readily labeled as either macro or micro. They are not rooted in both. For example, the problem of unemployment belongs to individual workers, it belongs to microeconomics. International trade is as task of government, it is macroeconomics. Is it true? A. Yes B. No ( A ) 37. Economic theory consists of factually supported generalizations about economic behavior. Economists use two methods to obtain sound theory: induction and deduction. In deduction the ec
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