Exam 1: Economics: Foundations and Models

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Where do economic agents such as individuals,firms and nations,interact with each other?

Table 1-1 Hours Open Total Revenue (dollars) 1 \ 50 2 75 3 95 4 110 5 120 6 125 Lydia runs a small nail salon in the town of New Hope.She is debating whether she should extend her hours of operation.Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $10 per hour. -Refer to Table 1-1.Using marginal analysis,how many hours should Lydia extend her nail salon's hours of operations?

Table 1-8 Year Flat-Panel TV Sets (millions) 2007 1.0 2008 1.5 2009 7.3 2010 12.7 2011 20.0 -Refer to Table 1-8.The table above shows the sales of flat-panel television sets in Central America.Present the information using a bar graph.

All of the following contributed to the downfall of the Soviet Union in 1991 except

Table 1-2 Hours Open Tatal Revenue (dallars) 1 \ 25 2 45 3 70 4 90 5 105 6 110 Thuy Anh runs a small flower shop in the town of Florabunda.She is debating whether she should extend her hours of operation.Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $16 per hour. -Refer to Table 1-2.What is Thuy Anh's marginal benefit if she decides to stay open for three hours instead of two hours?

In economics,an organization that produces a good or service is called a

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-color pinstriping job is $35,and she charges $95 for this service.For a total price of $175,Allison will apply a fancier 3-color pinstripe application to an automobile,a service that adds an additional $40 to the total cost of the package.Should Allison continue to offer the 3-color pinstripe application?

Macroeconomics is the study of

Explain the economic assumption that "people are rational."

Which of the following statements is false?

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

Which of the following is a macroeconomics question?

What is an economic model?

Which of the following statements about economic resources is true?

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage: a.The minimum wage law causes unemployment. b.A minimum wage law benefits some groups and hurts others. c.In some cities such as San Francisco and New York,it would be impossible for low-skilled workers to live in the city without minimum wage laws. d.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses. Which of the consequences above are positive statements and which are normative statements?

Soo Jin shares a one-bedroom apartment with her classmate.Her share of the rent is $700 per month.She is considering moving to a studio apartment which she will not have to share with anyone.The studio apartment rents for $950 per month.Recently,you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment.Soo Jin is as rational as any other person.As an economics major,you rightly conclude that

Define microeconomics.

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

All of the following questions or statements regarding medical school are positive except: