Exam 1: Economics: Foundations and Models

Markets promote

Table 1-5 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 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. -Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month. Recently, you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person. As an economics major, you rightly conclude that

Allocative efficiency is achieved when

Pookie's Pinball Palace restores old Pinball machines. Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration. After having spent $300, Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration. Alternatively, he can sell the machine "as is" now for $1,000. What is the marginal cost of completing the task?

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?

Figure 1-1 -Refer to Figure 1-1. Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2007 and 2011.

Which of the following is motivated by an efficiency concern?

The study of economics arises due to

Which of the following statements is true about profit?

The relationship between consumer spending and disposable personal income is

Which of the following is part of an economic model?

Allocative efficiency best explains ________, and productive efficiency best explains ________.

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

Table 1-5 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 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. -Consider the following statements: a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. B. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. C. Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

Suppose the extra cost to a doctor of keeping her office open on Saturdays is $800. Then, the doctor should not stay open on Saturdays if keeping the office open can only bring in additional revenue of $800.

Which of the following is a macroeconomics question?

Recent changes occurring within the U.S. health care system, including lower insurance reimbursement rates, have resulted in

If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon, what is the percentage change in price?

Define allocative efficiency. Explain the significance of this concept in economics?

What is an economic model?