Exam 1: Economics: Foundations and Models

The Stogie Shop, a cigar store in the mall, sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each. What is the opportunity cost of buying a hand-rolled cigar?

Which of the following is an example of a "how much" decision?

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

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. Using marginal analysis, determine how many hours should Ivan extend his hours of operations?

The machines workers have to work with are considered

According to census figures and the Congressional Budget Office, the number of people ________ is projected to increase and the number of people ________ is projected to decrease by the year 2020.

Which of the following is a normative economic statement?

"The distribution of income should be left to the market" is an example of a positive economic statement.

Which of the following is motivated by an equity concern?

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. -Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $700 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month. Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics major, you rightly conclude that

If it costs Vijay $150 to design 5 websites and $175 to design 6 websites, then $175 is the marginal cost of producing the 6th website.

Suppose when the price of laptops falls, college students buy more laptops. This implies that

The term "market" in economics refers to

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false?

Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain.

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each. What is the opportunity cost of buying a Russian tea cake?

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is

Which of the following generates productive efficiency?

Economists assume that individuals

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a. college tuition rates b. farm subsidies c. national income d. automobile prices e. air traffic congestion f. economic recession