Sexton 6e Solutions Manual for Problems
Chapter 1:
1. In most countries the birth rate has fallen as incomes and the economic opportunities for women have
increased. Use economics to explain this pattern.
Answer: One of the most important resources used raising children has historically been
2. Write your own definition of economics. What are the main elements of the definition?
3. Are the following topics ones that would be covered in microeconomics or macroeconomics?
a. the effects of an increase in the supply of lumber on the home-building industry.
b. changes in the national unemployment rate.
c. changes in the inflation rate.
d. .
e. the price of concert tickets.
4. Identify which of the following headlines represents a microeconomic topic and which represents a
macroeconomic topic.
a
b
c
d
e
f
Answer: Macroeconomics examines economic problems that influence the whole
5. The Environmental Protection Agency asks you to help them understand the causes of urban
pollution. Air pollution problems are worse the higher the Air Quality Index. You develop the following
two hypotheses.
Hypothesis I: Air pollution will be a greater problem the higher the average temperature in the urban area.
Hypothesis II: Air pollution will be a greater problem, the greater the population of the urban area.
Test each hypothesis with the facts given below. Which hypothesis fits the facts better? Have you
developed a theory?
Metropolitan Days with Average Maximum Population
Statistical Area Polluted Air* Temperature (thousands)
Cincinnati, OH 30 64.0 1,979
El Paso, TX 13 77.1 680
Milwaukee, WI 12 55.9 1,690
Atlanta, GA 24 72.0 4,112
Philadelphia, PA 33 63.2 5,101
Albany, NY 8 57.6 876
San Diego, CA 20 70.8 2,814
Los Angeles, CA 80 70.6 9,519
*Air Quality Index greater than 100 (2002) Source: U.S. Dept. of Commerce, Bureau of Census, 2002
Statistical Abstract of the United States, Tables Nos. 30, and 363; U.S. EPA, Air Trends Report, 2002,
EPA.Gov/airtrends/Factbook.
Answer: The data support the second hypothesis better than the first. The number of days
.
6. Do any of the following statements involve fallacies? If so, which ones do they involve?
a. Because sitting in the back of classrooms is correlated with getting lower grades in the class, students
b. Historically, the stock market rises in years the NFC team wins the Super Bowl and falls when the AFC
c. When a basketball team spends more to get better players, it is more successful, which proves that all
d. Gasoline prices were higher last year than in 1970, yet people purchased more gas, which contradicts
e. An increase in the amount of money I have will make me better off, but an increase in the supply of
7. In the 1940s, Dr. Melvin Page conducted a national campaign to stop people other than infants from
drinking milk. According to Page, milk was a dangerous food and a leading cause of cancer. He pointed
ducer, than any
Answer: This is a case of mistaking correlation for causation. People in Wisconsin tended
8. Are the following statements normative or positive, or do they contain both normative and positive
statements?
a. A higher income-tax rate would generate increased tax revenues. Those extra revenues should be
b. The study of physics is more valuable than the study of sociology, but both should be studied by all
c. An increase in the price of corn will decrease the amount of corn purchased. However, it will increase
d. A decrease in the price of butter will increase the amount of butter purchased, but that would be bad
e. The birth rate is reduced as economies urbanize, but it also leads to a decreased average age of
decision on national air quality standards? Describe two positive statements that might be useful in
determining the air quality standards.
Answer: This is a normative statement because it is a matter of opinion. Unless you held
10. Answer the following questions:
a. What is the difference between self-interest and selfishness? Self-interest is the desire to improve
c. Why are observation and prediction more difficult in economics than in chemistry? Observation and
d. Why do economists look at group behavior rather than individual behavior? Economics is concerned
11. Using the map analogy from the chapter, talk about the importance of abstraction. How do you
abstract when taking notes in class?
Answer: Abstraction enables an observer to highlight what are considered significant