Fill-in-the-Blank
1. Fill in the blanks to make the following statements correct.
a. Economists have designed to better explain and
predict the behaviour we observe in the world around us.
b. A variable, such as price or quantity, that is determined
within a theory is known as a(n) variable. A
variable that is determined outside the theory is known as
a(n) variable.
c. When, based on a theory, we claim that “If A occurs, then
B will follow,” we are making a that can then be
tested by observation.
d. If we observe that when variable A decreases, variable B
also decreases, we can say that the two variables are. We cannot necessarily say that there is a
relationship between A and B.
e. An important assumption that is made in economics is
that individuals and firms pursue their own. We
assume that individuals seek to maximize their
and firms seek to maximize their.
2. Fill in the blanks to make the following statements correct.
a. It is difficult to compare two or more data series when
absolute numbers and different units are used. For that
reason we construct numbers in order to
compare changes.