Exam 1: Economics: Foundations and Models

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Which of the following is a positive economic statement?

The U.S. Bureau of Labor Statistics predicts that 9 of the 20 fastest growing occupations over the next ten years will be in

A college must decide if it wants to offer more adult literacy classes. This decision involves answering the economic question of "for whom to produce."

A college must decide if it wants to offer more evening and weekend classes. This decision involves answering the economic question of "for whom to produce."

On a two-dimensional graph, ________ allows for the effects of additional variables.

According to census figures and the Congressional Budget Office, the number of people aged 65 and older is projected to ________ and the number of uninsured people is projected to ________ by the year 2020.

Economics does not study correct or incorrect behaviors, but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a dozen eggs?

"A decrease in the price of tablet computers will decrease the demand for desktop computers." This statement is an example of a normative economic statement.

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

Technology is defined as

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. -Refer to Table 1-5. Using marginal analysis, determine how many hours should Julius extend his shop's hours of operations?

The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents. Each year, more than 500 people wish to attend the concert, so some of the residents who receive the free tickets sell them for as much as $75 each. Is a transaction where someone pays a resident $75 for a "free ticket" economically efficient?

At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored beverage producer announced, "We have increased our sales by 8 percent in just six months." Suppose six months ago, its sales amounted to $452,000. What is the value of its sales today?

Making optimal decisions "at the margin" requires

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

Table 1-6 Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour. -Refer to Table 1-6. What is Ivan's marginal cost if he decides to stay open for six hours instead of five hours?

What is scarcity, and why is it a fundamental concept in economics?