Exam 2: The Key Principles of Economics

The opportunity cost of something is

Recall the Application about the use of fertilizer and its impact on crop yields to answer the following question(s). The table is taken from this Application. Fertilizer and Corn Yield -Recall the Application.Based on the data in the table,the principle of diminishing returns began to take effect on the ________ bag of fertilizer per acre.

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.The opportunity cost of cleaning the first house in a day is

Farmer Bill grows corn on his 27-acre farm.To increase production,he puts more and more fertilizer on the corn.What does the marginal principle say will happen?

The principle of diminishing returns implies that when one input increases while the other inputs are held fixed,output beyond some point will exhibit

The extra benefit resulting from a small increase in some activity is called the

According to the principle of diminishing returns,if all factors of production but one are held constant and if that one factor is doubled,then eventually output will most likely

Table 2.3 -The firm depicted in Table 2.3 is facing diminishing returns because

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s). -According to the Application,the opportunity cost of your time should be ________ the opportunity cost of your invested funds.

The principle of diminishing returns occurs

What does an increase in prices in retails stores do to the real value of the money you earn as wages?

What matters to people is the face value of money or income.

Table 2.4 -The principle of diminishing returns does NOT apply to labor when all inputs are allowed to vary because

Figure 2.1 -On the production possibilities curve in Figure 2.1,the gain from decreasing manufacturing production from 700 tons to 500 tons is ________ tons of agricultural products.

Figure 2.3 -In Figure 2.3,the movement from production possibility curve XV to production possibility curve YZ could be caused by

Figure 2.1 -The production possibilities curve in Figure 2.1 illustrates the notion of

When you voluntarily accept a job and exchange your labor for money,

The economic reason why some individuals choose keep their tuition money and not to go to school is

Firms expect to make money on repeat business because

The notion of opportunity cost allows the measurement of trade-offs.