Exam 1: Introduction: What Is Economics

A key assumption of most economic analysis is that people act rationally, meaning they respond to incentives.

Normative economic analysis answers what question?

The Latin phrase ceteris paribus means that when a relationship between two variables is being studied

Figure 1A.1 -Refer to Figure 1A.1. If the hours worked per week are 30, the income per week is

There is a negative relationship between two variables if

When computing percentage changes, using the simple approach results in increases and decreases which are

Slope is calculated as a change in the variable on the horizontal axis divided by a change in the variable on the vertical axis.

Figure 1A.2 -Refer to Figure 1A.2. If this consumer rents zero DVDs, how many movie tickets will she purchase?

When economists assume that people are rational and respond to incentives, they mean

Positive relationships are also referred to as inverse relationships.

According to the Texas Transportation Institute, the typical U.S. commuter wastes approximately how much time per year due to traffic congestion?

Slope is calculated as the

Macroeconomics helps explain economic fluctuations, why the economy shrinks and expands and why some of the economy's resources are idle.

To make things simpler and focus attention on what really matters, economists

Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of

If the price of a 32GB memory card decreases from $25 to $20, the percentage change is

There is a positive relationship between two variables if

Economic models are used to