Exam 1: The Scope and Method of Economics

Many economists argue that items such as food and clothing should be exempt from sales tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals. This argument is motivated by concerns over

Refer to the information provided in Figure 1.5 below to answer the question(s) that follow. Figure 1.5 -Refer to Figure 1.5. Which of the Panels shows a curve or line that has a slope that is positive and increasing?

Which of the following is a question answered with positive economic analysis?

Economists often refer to risk-free ventures as

Marginal cost refers to the incremental cost arising from a decision.

Related to the Economics in Practice on page 10: Prior to joining a fraternity, James spent most of his evenings and weekends studying for his classes. Once he joined the fraternity, James spent a majority of his evenings and weekends going to parties. This change in behavior is best described by

If information is less costly and more easily available, then usually this

Economic growth is an increase in the total output of an economy.

Related to the Economics in Practice on p. 10: Based on a study of the effects of roommates on college grades discussed in the Economics in Practice, which of the following is true?

Economic stability refers to the condition of steady growth in national output, with ________ inflation and ________ employment of resources.

Refer to the information provided in Figure 1.3 below to answer the question(s) that follow. Figure 1.3 -Refer to Figure 1.3. The slope of the line is

________ economy is an economy that produces what consumers demand and does so at the least possible cost.

As the variable on the Y-axis rises the variable on the X-axis falls. The relationship between X and Y is said to be positive.

Refer to Scenario 1.1 below to answer the question(s) that follow. SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. -Refer to Scenario 1.1. The statement that an increase in the minimum wage causes an increase in teenage unemployment is an example of

If you can download 10 ring tones for your cell phone for $10 or you can download 11 ring tones for your cell phone for $10.50, then the marginal cost of the eleventh ring tone is

Related to the Economics in Practice on page 10: A study on the effect of roommates on college grades found that there were strong roommate effects on grade point average, effort in school, and fraternity membership. Which of the following is an example of a normative statement concerning this study?

Microeconomics is best described as the study of

If you can buy 9 DVDs for $126 or you could buy 10 DVDs for $130, then the marginal cost of the tenth DVD is

An efficient market is a market in which

The government should extend the duration of unemployment benefits to those workers who lost their jobs due to outsourcing. This statement is best described as