Exam 1: Economics: Foundations and Models

The study of economics arises due to

Very few businesses,and virtually no nonprofit organizations,hire economists.

The basic economic problem of scarcity

Which of the following is a problem inherent in centrally planned economies?

Table 1-5 Hours Open Total Revenue (dollars) 1 \ 40 2 65 3 80 4 90 5 95 6 98 Julius runs a small tailor shop in the city of Bloomfield. He is debating whether he should extend his hours of operation. Julius figures that his sales revenue will depend on the number of additional hours the tailor shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour. -Refer to Table 1-5.What is Julius's marginal benefit if he decides to stay open for three hours instead of two hours?

Your roommate,Serafina,a psychology major,said,"The problem with economics is that it assumes that consumers and firms always make the correct decision.But we know that everyone's human,and we all make mistakes." Do you agree with her comment?

"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement.

Economists assume that rational people do all of the following except

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

Table 1-6 Hours Open Total Revenue (dollars) 1 \ 275 2 375 3 450 4 500 5 530 6 550 Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour. -Refer to Table 1-6.Using marginal analysis,how many hours should Ivan extend his hours of operations?

An office supply store sells a ream of printer paper at a fixed price of $4.50.Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?

How are most fundamental economic decisions now determined in China?

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it,________ occurs.

Which of the following is part of an economic model?

A restaurant sells a large soft drink at a fixed price of $1.79.A term used by economists to describe the money received from the sale of an additional large soft drink is

Which of the following are positive economic statements and which are normative economic statements? a.An increase in the price of gasoline will decrease the quantity of gasoline purchased. b.The government should eliminate the minimum wage. c.All states should raise the minimum wage to at least $10 per hour. d.The government should scrap its current income tax structure in favor of a flat tax. e.Unemployment has increased since the onset of the recession. f.The government should not bail out investment banks during a financial crisis.

The term "market" refers only to trading arrangements that have been approved by the government.

Which of the following statements is true?