Exam 1: Economics: Foundations and Models

Which of the following contributed to the downfall of the Soviet Union in 1991?

Which of the following is a normative economic statement?

Competition among sellers generates

Which of the following are positive economic statements and which are normative economic statements? a.An increase in the minimum wage causes unemployment. b.The government should raise the minimum wage above $7.25 per hour. c.The prolonged recession has caused the unemployment rate to reach a 30-year high. d.Interest rates need to be lower for the economy to emerge from the recession. e.Inflation has decreased since the onset of the recession. f.Once the recession has ended,interest rates should increased to assure that inflation does not go up.

________ occurs when economic benefits are distributed fairly.

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is true?

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

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

Trade-offs force society to make choices when answering what three fundamental questions?

Marginal benefit is the benefit that your activity provides to someone else.

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?

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?

As population declines,scarcity eventually disappears.

Which of the following is part of an economic model?

Productive efficiency is achieved when firms produce goods and services

What is an economic variable? Give an example of an economic variable.

Every society faces economic trade-offs.This means

An "omitted variable" is

Which of the following statements is true about revenue?

Scenario 1-1 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track. We are producing the optimal number of t-shirts." -Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental revenue received from the sale of the last 400 t-shirts?