Exam 1: Economics: Foundations and Models

What is an 'economic model'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

When production reflects consumer preferences, ________ occurs.

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

A university must decide if it wants to offer more adult literacy classes. This decision involves answering the economic question of 'for whom to produce'.

A restaurant sells a large lemonade at a fixed price of $2.59. A term used by economists to describe the money received from the sale of an additional lemonade is:

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

A farmers' market sells a bag of apples at a fixed price of $3.60. Which of the following is a term used by economists to describe the money received from the sale of an additional bag of apples?

Which of the following is a 'normative' economic statement?

Which of the following is a 'macroeconomics' question?

Which of the following is a result of a market economy?

Productive efficiency is generated by

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact, it is a change in variable Y that caused a change in variable X.

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

If a graph has a line that shows the amount of outsourcing in the last 10 years, it is known as:

Abigail's Auto Art is a company that applies pinstripes to vehicles. Abigail's cost for a basic 1-colour pinstriping job is $40, and she charges $100 for this service. For a total price of $180, Abigail will apply a fancier 3-colour pinstripe application to an automobile, a service that adds an additional $50 to the total cost of the package. What is Abigail's marginal benefit if she sells a basic 1-colour job?

'Microeconomics' is the study of:

Annie quits her $150 000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?

Which of the following statements about positive economic analysis is false?

Productive efficiency is achieved when:

When voluntary exchange takes place, both parties gain from the exchange.