Exam 1: Introduction: What Is Economics

A student has a D grade average in her accounting course and a B grade average in her economics course. She decides to study an extra hour for her accounting exam and one less hour for her economics exam hoping to improve her accounting grade while not hurting her economics grade. This is an example of:

Unrealistic simplifying assumptions should be avoided because they cause the analysis that is based on the assumption to be incorrect.

Bill Gates, with his $53 billion fortune, does not experience scarcity.

Because resources are limited:

A straight line graph shows

Which of the following is a microeconomic question?

Figure 1.1 -Refer to Figure 1.1. The relationship between hours worked and income, as shown by the graph in Figure 1.1 is:

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, does a reward provide more incentive to produce compared to punishment?

Using assumptions to make things simpler and focus attention on what really matters is like using a road map to plan a trip.

To think at the margin means to consider:

Scarcity is a situation in which resources are limited in quantity and can be used in different ways.

The reason why spammers find it profitable to spam is because:

If a variable is 100 and then increases to 150, then using the initial value approach its percentage growth is:

When a student is thinking at the margin, he analyzes how many more points he would get on his economics final exam if he devotes one more hour for studying.

Money is an example of a scarce factor of production.

Recall Application 1, "Responding to Production Rewards," to answer the following questions: -Based on the application, do incentives increase the average worker productivity?

If one variable falls the other variable falls, the two variables are positively related.

Which of the following is an example of a normative question?

A key assumption of most economic analysis is that people act rationally and in their own self- interest.

The recent experience of sub- Saharan Africa has taught economists that institutions such as the legal system and the regulatory environment play a key role in economic growth.