Exam 1: Economics: Foundations and Models

Table 1-2 -Refer to Table 1-2.The table above shows the sales of DVD recorders in North America.Present the information using a bar graph.

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?

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

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 2008 and 2011.

The highest valued alternative that must be given up to engage in an activity is the definition of

Assume that a doctor can earn an additional $20,000 of revenue each year from keeping his office open for one additional hour per week.What must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?

Recent changes occurring within the U.S.health care system,including lower insurance reimbursement rates,have resulted in

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

By definition,economics is the study of

Which of the following is motivated by an equity concern?

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

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.

Productive efficiency is achieved when

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

If the marginal cost of keeping a doctor's office open one additional hour per day is $200,then the doctor should keep the office open for one extra hour

You explain to your roommate Surya,who makes beaded headbands,about an economic theory which asserts that consumers will purchase more of a product at lower prices than they will at higher prices.She contends that the theory is incorrect because over the past two years she has lowered the price of her headbands and yet has seen a decrease in sales.How would you respond to Surya?

One example of human capital is the amount of skills that you have.

________ is a situation in which a good or service is produced at the lowest possible cost.

The three fundamental questions that any economy must address are:

At a recent faculty meeting,Lorraine Waverly,president of Skywalker College,announced that enrollment is up by 12 percent over the previous semester.If enrollment the previous semester was 3,250 students,what is the student enrollment this semester?