Exam 1: Economics: Foundations and Models

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi purchased two tickets for $40 each.Is this transaction economically efficient?

Cassie's Quilts alters,reconstructs and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively,she can sell the quilt "as is" now for $900.What should she do?

Economists assume that rational people

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

Tabitha shares a flea market booth with her sister.Her share of the rent is $150 per month.She is considering moving to her own,larger booth which she will not have to share with anyone.The larger booth rents for $450 per month.Recently,you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person.As an economics major,you rightly conclude that

Scenario 1-1 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track. We are producing the optimal number of t-shirts." -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 400 t-shirts?

If the price of milk was $1.25 a gallon and it is now $2.25 a gallon,what is the percentage change in price?

Before a doctor decides to keep her office open on Saturdays,she should

As population declines,scarcity eventually disappears.

If the marginal cost of producing a television is constant at $200,then a firm should produce this item

________ involves undertaking an activity until its marginal benefits equal marginal costs.

Human capital refers to

Ted quits his $60,000-a-year job to be a stay-at-home dad.What is the opportunity cost of his decision?

According to census figures,what has been the trend in the United States since 1970 of doctors choosing to operate a private practice versus choosing to work for a hospital or group practice?

What is a household? How do households interact with firms in a market?

Cassie's Quilts alters,reconstructs and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively,she can sell the quilt "as is" now for $900. What is the marginal cost of completing the task?

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 2010.

An "omitted variable" is

Trade-offs force society to make choices when answering what three fundamental questions?

In the market for factors of production,households earn income by supplying factors of production to firms.