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Thinking Like an Economist

1. Twovariablesthathaveapositive correlationmoveinthesamedirection.

a. True

b. False

2. Twovariablesthathaveanegative correlationmoveinoppositedirections.

a. True

b. False

3. Whentwovariablesmoveinoppositedirections,thecurverelatingthemisupwardsloping,andwesaythevariablesarepositivelyrelated.

a. True

b. False

4. Whentwovariablesmoveinthesamedirection,thecurverelatingthemisdownwardsloping,andwesaythe variablesarenegativelyrelated.

a. True

b. False

5. Whenavariablethatisnamedonanaxisofagraphchanges,thecurveshifts.

a. True

b. False

6. Whenavariable thatisnotnamedoneitheraxisofagraphchanges,wereadthechangeasamovementalongthecurve.

a. True

b. False

7. Theconceptofslopecanbeusedtoanswerquestionsabouthowmuchonevariablerespondstochangesinanothervariable.

a. True

b. False

8. Theslopeofalineisequaltothechangeinthex-variabledividedbythechangeinthey-variable.

a. True

b. False

9. Theslopeofanupward-slopinglineispositive,andtheslopeofadownward-slopinglineisnegative.

a. True

b. False

10. The slopeof ahorizontal lineis infinite,andthe slopeof avertical line is zero.

a. True

b. False

11. Theslopeofalineistheratioofthevertical distancecoveredtothehorizontaldistancecoveredalongtheline.

a. True

b. False

12. Ifalinepassesthrough thepoints(20,5)and(10,10),thentheslopeofthelineis1/2.

a. True

b. False

13. Ifalinepassesthroughthepoints(20,5)and(10,10), thentheslopeofthelineis-2.

a. True

b. False

14. Changesinonevariableonagraphmightbecausedbytheothervariable onthegraphorbyathirdomittedvariable.

a. True

b. False

15. DecidingthatAcausesBwheninfactBcausesAisamistakecalledomittedvariablebias.

a. True

b. False

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