When testing a paper airplane on your campus quad, which of the following would be an exogenous factor?

17. Why do economists use models?

         a.  Models are used to add complexity to a simple world.

         b.  Models allow us to study a simplified version of a complex world.

         c.  Models allow us to control exogenous factors.

         d.  Models make the world harder to understand.

         e.  Models allow us to examine more factors than what actually exists in our world.

ANS: B        

  19.  Variables that are controlled for in a model are called:

         a.  normative statements.

         b.  positive statements.

         c.  endogenous factors.

         d.  exogenous factors.

         e.  the scientific method.

ANS: C        

  21.  When testing a paper airplane on your campus quad, which of the following would be an exogenous factor?

         a.  the weight of the paper used in making the plane

         b.  the ratio of wingspan to plane length

         c.  the height of the body of the plane

         d.  the level of wind encountered

         e.  the number of folds in the wings

ANS: D       

  23.  Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs. The many variables that can be precisely controlled inside the wind tunnel are considered:

         a.  normative factors.

         b.  positive factors.

         c.  comparative factors.

         d.  endogenous factors.

         e.  exogenous factors.

ANS: D     

  25.  A model without any simplifying assumptions:

         a.  is highly complex and likely unworkable.

         b.  excludes important predictive variables.

         c.  is very helpful for solving tough, real-world problems.

         d.  does not look like the real-world problem it is meant to address.

         e.  provides simplified solutions to complex problems.

ANS: A     

  27.  A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

         a.  a production possibilities frontier (PPF).

         b.  a supply curve.

         c.  opportunity cost.

         d.  a consumer demand curve.

         e.  absolute advantage.

ANS: A        

  29.  The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

         a.  concept of absolute advantage

         b.  law of positive statements

         c.  law of demand

         d.  production possibilities frontier (PPF)

         e.  principle of comparative advantage

ANS: D        

  31.  Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

         a.  also increasing the production of the second good.

         b.  decreasing the production of the second good.

         c.  increasing the price of the second good.

         d.  decreasing the price of the second good.

         e.  reducing the resources available for production.

ANS: B     

  33.  On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by:

         a.  movement from a point within the frontier to a point on the frontier.

         b.  a point outside the frontier.

         c.  a point within the frontier.

         d.  movement from a point on the frontier to another point on the frontier.

         e.  a point on the frontier.

ANS: C