Exam 2: The Key Principles of Economics

Table 2.3 -Refer to Table 2.3.The principle of diminishing returns sets in with the addition of the ________ worker.

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 $20.If she is following the marginal principle,how many hours should Julianne stay open?

Two parties engage in exchange when each one expects to be made better off by the exchange.

A principle is a self-evident truth that most people readily understand and accept.

Suppose your bank pays you 6% interest per year on your savings account.If prices increase by 3% per year over that time,approximately how much nominal value do you gain by keeping $100 in the bank for a year?

If the weekly income from 1974 to 2015 increased from $80 to $290,but the number of standard baskets of goods that the weekly income could purchase decreased from 1.70 to 1.23 from 1974 to 2015,then we can conclude that

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

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 second house in a day is

The marginal output of labor is the amount of output that can be produced if one more unit of labor is added.

If your salary increases and the cost of goods in stores increase at the same rate,does a unit of money have more or less buying power?

According to the principle of diminishing returns,if the number of workers is increased beyond the point of diminishing returns,then the additional worker

Table 2.3 -Refer to Table 2.3.The marginal product of the 4th worker is

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 figure shows that the production possibilities curve is

Recall the Application about Rory McIlroy and weed-whacking to answer the following question(s). The Application assumes that Rory McIlroy could whack down all the weeds on his estate in one hour at an opportunity cost of $1,000, but it would take 20 hours for a gardener to do it at a price of $10 per hour. -Based on the assumptions in the Application,Rory McIlroy would be indifferent to hiring a gardener and whacking the weeds himself if the hourly rate for a gardener was

The real value of money

A firm produces its product using both capital and labor.When it does not change its capital usage,but doubles its labor input,its output increases by less than 50%.Which of the following is the most likely explanation of this finding?

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 second new highway built in a year is ________ people provided with medical care.

If you remove resources from factory production,the quantity of factory goods will

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.As the group cleans more houses,the opportunity cost of doing yard work

According to the marginal principle,an individual will do best by producing or consuming where