Exam 2: The Key Principles of Economics

Nancy and Melissa both have broken light fixtures in their living rooms.Nancy opts to hire an electrician,while Melissa spends two hours replacing the fixture herself.Which of the following is a possible explanation of this behavior?

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $12.If she is following the marginal principle,how many hours should Julianne stay open?

Figure 2.2 -Figure 2.2 presents a production possibilities curve for a given year for a country that can either produce highways or provide people with medical care.The reason why the production possibilities curve is shaped as it is (bowed outward)is because inputs for healthcare and highways are

Recall the Application about the best speed at which to sail an ocean cargo ship to answer the following question(s). -Based on the Application,if the total cost of sailing a ship faster exceeds the total benefit of sailing the ship faster,then

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $16.If she is following the marginal principle,how many hours should Julianne stay open?

A major league baseball player signs a contract that pays $50 million over five years.The $50 million is the ________ value.

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that we observe Julianne staying open 5 hours per day.If she is following the marginal principle,what must her marginal benefit be?

When two parties engage in voluntary exchange,one must be made worse off.

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s). -According to the Application,if the interest rate rises,then the opportunity costs of running a business

Different people eat different amounts of food when they go to buffet restaurants,even though they all pay the same price.Explain how this relates to the marginal principle.

Jessica,aged three,decides to dress up like Sleeping Beauty for Halloween.What is her opportunity cost of this decision?

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that we observe Julianne staying open 2 hours per day.If she is following the marginal principle,what must her marginal benefit be?

You are running a small yard maintenance business for the summer.What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)?

If the nominal minimum wage is unchanged while prices rise,then the real minimum wage

Figure 2.4 -Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 6 hours per day.If he is following the marginal principle,what must his marginal cost be?

The value of money or income in terms of the quantity of goods the money can buy is called its

People are interested in how much their money can buy.This is called the ________.

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that we observe Julianne staying open 3 hours per day.If she is following the marginal principle,what must her marginal benefit be?

What is the opportunity cost of your college degree?

Figure 2.2 -Figure 2.2 presents a production possibilities curve for a given year for a country that can either produce highways or provide people with medical care.The opportunity cost of the fourth new highway built in a year is