Exam 1: Economics: Foundations and Models

Damian shares a small food truck with his sister. His share of the expenses is $500 per month. He has decided to get his own, newer food truck which he will not have to share with anyone. His expenses for the newer truck are $1,400 per month. Damian is as rational as any other person. As an economics major, you rightly conclude that

What is an entrepreneur, and what decisions does an entrepreneur make in a market system?

Zane's Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. After having spent $125, Zane realizes that he will need to spend an additional $200 on materials to complete the restoration. Alternatively, he can sell the weather vane without restoring it for $200. What is his marginal benefit if he sells the weather vane without restoring it?

If a straight line passes through the point x = 8 and y = 4 and also through the point x = 12 and y = 6, the slope of this line is

The three fundamental questions that any economy must address are:

Table 1-3 Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store 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 1-3. What is Santiago's marginal cost if he decides to stay open for two hours instead of one hour?

In a centrally planned economy, the households and firms decide how economic resources will be allocated.

Every society faces economic trade-offs. This means

Which of the following is a microeconomics question?

Arlene quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?

What is the "reverse causality" problem in determining cause and effect?

In economics, the accumulated skills and training that workers have is known as

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 2008 and 2010.

If the marginal cost of producing a television is constant at $200, then a firm should produce this item

When production reflects consumer preferences, ________ occurs.

A college must decide if it wants to offer more Internet-based classes. This decision involves answering the economic question of "what to produce."

Zane's Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. After having spent $125, Zane realizes that he will need to spend an additional $200 on materials to complete the restoration. Alternatively, he can sell the weather vane without restoring it for $200. What should he do?

Explain the difference between a firm's revenue and its profit.

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 benefit if he decides to stay open for six hours instead of five hours?

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is