Exam 1: Economics: Foundations and Models

Which of the following generates productive efficiency?

Arlene quits her $125,000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

Technology is defined as

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 DeShawn's marginal benefit if he sells a basic detailing package?

Economists reason that the optimal decision is to continue any activity up to the point where the

Scenario 1-1 Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week. A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of cell phones." -Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental revenue received from the sale of the last 3,000 cell phones?

Which of the following statements is true about profit?

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

Microeconomics is the study of

What is opportunity cost?

Explain the economic idea that "people respond to incentives."

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

Explain the difference between a firm's revenue and its profit.

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

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________,meaning they make the best decisions given their knowledge of the costs and benefits.

The U.S.Health Resources and Services Administration (HRSA)forecasts that in 2020

Which of the following is a normative economic statement?

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

List the five main factors of production.

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon,what is the percentage change in price?