Chapter 1 Section 4: The Economist’s Toolbox

Define the term statistics.

• o Statistics are economic systems that help in making decisions

• o Statistics are information in numerical form

• o Statistics can be found during science class where you see a lunar eclipse, which shows the sun behind it

• o Statistics is something that everybody engages in every day, and in the way everyone has knowledge about it

When economists are interested in identifying trends in statistics, they often use _____________________________________ of numerical relationships.

• o Foreign aid and solar system

• o Observations and collecting data

• o Graphs or visual representations

• o Connections and interesting relationships

Explain the term positive economics

• o It studies economic behavior as it is

• o It involves judgements of what economic behavior ought to be

• o It studies consumer sectors

• o It studies monetary system, the ups and downs of business cycles

Explain the term normative economics

• o It studies the scientific method to observe data, hypothesize test and continues test

• o It involves judgements of what economic behavior ought to be

• o It studies national unemployment figures rise and world trade organization meets

• o It studies how due to scarcity all must make a choice

Which graph is called a circle graph and why?

• o Bar graph as it compares items by a single measure

• o Line graph as it uses at least two sets of numbers or variables

• o Pie graph as it shows how part make up a whole

• o Macroeconomics graph as it studies the behavior of individual families

Define the term microeconomics

• o It is the study of individuals, families and businesses in an economy

• o It is the study of economy as a whole and is concern with large scale economic activity

• o It studies economic behavior as it is

• o It involves judgements of what economic behavior ought to be

Define the term macroeconomics

• o It is the study of individuals, families and businesses in an economy

• o It is the study of economy as a whole and is concern with large scale economic activity

• o It studies economic behavior as it is

• o It involves judgements of what economic behavior ought to be

Which does each of the news headlines relate to microeconomics

• o National unemployment figures rise

• o World trade organization meets

• o Shipbuilder wins Navy contract

• o Global perspective to their work

Which does each of the news headlines relate to macroeconomics

• o Gasoline prices jump 25 cents

• o World Trade Organization meets

• o Cab drivers on strike

• o Shipbuilder wins navy contract

Who would be concerned with a large corporation going bankrupt with a large corporation going bankrupt?

• o A microeconomist, since it is an individual corporation

• o A macroeconomist, since statistics are part of a bigger picture

• o Only scarcity will be involved

• o it will the concern of independent agencies