Exam 1: Economics: Foundations and Models

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

The development of a new good or a new process for making a good is called

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

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

The cost incurred from the production of an additional unit of a product

Which of the following best describes an assumption economists make about human behavior?

Which of the following is a macroeconomics question?

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16,the slope of this line is

The branch of economics which studies how households and firms interact in markets is called

If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon,what is the percentage change in price?

Which of the following is part of an economic model?

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.What is the marginal cost of moving up from the 1-color application to the 3-color application?

Who receives the most of what is produced in a market economy?

Consider the following statements: a.Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area. b.Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment. c.Firms produce more of a particular DVD when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

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.What is Allison's marginal benefit if she sells a basic 1-color job?

Which of the following is a positive economic statement?

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

Lionel's Lawn Care is a company that maintains residential yards.Lionel's cost for his standard package of mowing,edging,and trimming is $15,and he charges $25 for this service.For a total price of $40,Lionel will also trim shrubs,a service that adds an additional $10 to the total cost of the standard package.Should Lionel continue to offer the shrub-trimming service?

Which of the following contributed to the downfall of the Soviet Union in 1991?

In economics,the accumulated skills and training that workers have is known as