Exam 1: Economics: Foundations and Models

Table 1-7 Year DVD Recorders (millions) 2007 12.5 2008 14.0 2009 17.2 2010 20.0 2011 21.7 -Refer to Table 1-7.The table above shows the sales of DVD recorders in North America.Present the information using a bar graph.

Damian shares a small food truck with his sister.His share of the expenses is $500 per month.He has decided to get his own,newer food truck which he will not have to share with anyone.His expenses for the newer truck are $1,400 per month.Damian is as rational as any other person.As an economics major,you rightly conclude that

Suppose the U.S.government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus.These teachers would be exemplifying the economic idea that

In economics,the total amount received for selling a good or service is referred to as

The basic economic problem of ________ has always existed and will continue to exist.

Making optimal decisions "at the margin" requires

All centrally planned economies

Which of the following is a normative economic statement?

The branch of economics which studies how households and firms make choices,interact in markets and how government attempts to influence their choices is called

Zane's Vanes is a service that restores old weather vanes.Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed.After having spent $125,Zane realizes that he will need to spend an additional $200 on materials to complete the restoration.Alternatively,he can sell the weather vane without restoring it for $200.What should he do?

"A decrease in the price of tablet computers will decrease the demand for desktop computers." This statement is an example of a normative economic statement.

Explain the term "economics."

The decision about what goods and services will be produced made in a market economy is made by

A college must decide if it wants to offer more evening and weekend classes.This decision involves answering the economic question of "for whom to produce."

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

What is the difference between goods and services?

When voluntary exchange takes place,neither party usually gains from the exchange.

Consider the following statements: a.Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. b.Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. c.Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

Mr.Peabody chooses to invest in companies that produce goods and services based on consumer preferences.Mr.Peabody is investing in companies that are attempting to be

The Farm Factory,a booth at the local Farmer's Market,sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon.What is the opportunity cost of buying a gallon of milk?