Exam 2: The Key Principles of Economics

Figure 2.1 -Refer to Figure 2.1. If you are producing 600 tons of agricultural products per year, what is the maximum amount of manufactured products you can produce per year?

The trade-offs made by the U.S. government to fund the war in Iraq

The opportunity cost of something is

Suppose that you lend $1,000 to a friend and he or she pays you back one year later. What is the opportunity cost of lending the money?

The opportunity cost of something is the gain you receive as a result of your sacrifice.

According to the principle of diminishing returns, if all factors of production but one are held constant and if that one factor is doubled, then eventually output will most likely

Is it possible for nominal wages to decrease while real wages increase?

Table 2.1 -Kaitlyn and Larissa have formed a dog bathing and grooming business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. As they groom more dogs, the opportunity cost of grooming additional dogs

People acting in their own self interest is the basis of the

Figure 2.1 -Referring to Figure 2.1,if you increase the production of farm goods, what other area is affected?

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $32. How many hours should Joe stay open?

Recall the Application about the impact inflation has on your potential future salary and the repayment of student loans to answer the following question(s). -In considering the costs involved for student loans that must be repaid in ten years, this Application is addressing the economic concept of

If a company's total costs per day increase from $200 to $400 by adding another worker, but its additional benefits are $300, it is sensible to add that additional worker.

What is the real value of money?

A Major League Baseball player signs a contract that pays $27 million over 5 years. The $27 million is the contract's ________ value.

What matters to people is the real value of money or income.

Spending money on a new car instead of a used car when you are on a fixed budget is an example of

When a firm hired its tenth worker, its factory output increased by four units per month. Would you expect the firm's output to increase by eight more units per month if the firm hired two more workers?

When product prices increase slower than nominal wages increase, the real value of wages decreases.

Table 2.3 -Refer to Table 2.3. Increasing the number of workers from 2 to 3 will increase output per day by