Exam 1: Economics: Foundations and Models

Soo Jin shares a one-bedroom apartment with her classmate.Her share of the rent is $700 per month.She is considering moving to a studio apartment which she will not have to share with anyone.The studio apartment rents for $950 per month.Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment.Soo Jin is as rational as any other person.As an economics major, you rightly conclude that________.

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

What is opportunity cost? __________________________________________________________________________________________________________________________________________________________________________________________

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week.What must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational? __________________________________________________________________________________________________________________________________________________________________________________________

What allows for the effects of additional variances on a two-dimensional graph?

What is a graph called that has a line that shows the amount of outsourcing in the last ten years?

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

What does making 'how much' decisions involve?

Even if the population declines, scarcity will still exist.

An example of a normative economic statement is:

Mr.Peabody chooses to invest in companies that produce goods and services at the lowest possible cost.Mr.Peabody is investing in companies that are:

When is productive efficiency achieved?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is:

Economic agents, such as individuals, firms and nations, interact with each other________.

Mr.Peabody chooses to invest in companies that produce goods and services based on consumer preferences.Mr.Peabody is investing in companies that are attempting to be:

When voluntary exchange takes place, both parties gain from the exchange.

The decision about what goods and services will be produced in a market economy is made by:

Trinh quits his $80 000-a-year job to become a full-time volunteer at a museum.The opportunity cost of his decision is:

Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets.By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that________.

What do markets promote?