Exam 1: Economics: Foundations and Models

What is an economic variable?

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a. gasoline prices b. unemployment c. inflation d. health care costs e. air pollution f. economic growth

Describe what has happened to state obesity rates in the United States since 1994.

One example of human capital is the amount of savings that you have.

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace.

Competition forces firms to produce and sell products as long as the ________ to consumers exceeds the ________ of production.

Making "how much" decisions involves

Which of the following is a macroeconomics question?

Table 1-2 Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $16 per hour. -Refer to Table 1-2. Using marginal analysis, how many hours should Thuy Anh extend her flower shop's hours of operations?

Scenario 1-2 Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of $5,000 per week. The plant owner observes, "Although the last 300 hats we produced and sold increased our revenue by $1,000 and our costs by $1,100, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of hats." -Refer to Scenario 1-2. Had the firm not produced and sold the last 300 hats, would its profit be higher or lower, and if so by how much?

In economics, the term ________ means "additional" or "extra."

Scarcity refers to the situation in which

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.

Figure 1-6 -Refer to Figure 1-6. Calculate the area of the trapezoid X.

The economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage: a. The minimum wage law causes unemployment. B. Unemployment would be lower without a minimum wage law. C. Minimum wage laws benefit some workers and harm others. D. The minimum wage should be more than $7.25 per hour. Which of the consequences above are positive statements and which are normative statements?

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 increase to assure that inflation does not go up.

Which of the following is a microeconomics question?

Which of the following is part of an economic model?

Table 1-8 -Refer to Table 1-8. The table above shows the sales of flat-panel television sets in Central America. Present the information using a bar graph.