Exam 1: Economics: Foundations and Models

Consider the following economic agents: A.the government B.consumers C.producers Who, in a market economy, decides what goods and services will be produced with the scarce resources available in that economy?

Economic models do all of the following except

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

Which of the following is a macroeconomics question?

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

In a centrally planned economy, the households and firms decide how economic resources will be allocated.

All economic questions arise from the fact that resources are unlimited.

Suppose that to increase sales of hybrid vehicles, auto manufacturers are offering large cash incentives.This is an example of a macroeconomic topic.

The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of

What is a mixed economy?

Which of the following statements is true about profit?

Define microeconomics.

Pookie's Pinball Palace restores old Pinball machines.Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration.After having spent $300, Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration.Alternatively, he can sell the machine "as is" now for $1,000.What is his marginal benefit if he sells the machine "as is" now?

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Which of the following generates productive efficiency?

What is an economic variable?

Article Summary Recent studies about wealth inequality and income inequality indicate that the American public's estimates of the distribution of wealth and income are quite different than actual data suggests. With respect to wealth, the top 20 percent of households hold more than 84% and the bottom 40 percent hold less than 1%, yet the public's estimates were 59% and 9%, respectively. In terms of income inequality, the public estimated that the CEO-to-worker pay-ratio was 30-to-1, whereas data suggests the actual ratio is 354-to-1, up from 20-to-1 in the 1960s. President Obama has referred to economic inequality as "the defining challenge of our time," and although Americans seem to recognize that income and wealth gaps have widened, only 5 percent indicate that this inequality is a problem that needs to be addressed. Source: Nicholas Fitz, "Economic Inequality: It's Far Worse Than You Think," Scientific American, March 31, 2015 -Refer to the Article Summary above.The article discusses wealth inequality, and for some people this means a more equitable distribution of wealth is needed in the economy.What is meant by a more equitable distribution of wealth?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2013 and 2016.

Scarcity is a problem that will eventually disappear as technology advances.