Exam 1: Economics: Foundations and Models

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. -Fiona shares an office with her ex-husband. Her share of the rent and utilities are $625 per month. She is considering moving to a home office which she will not have to share with anyone. The home office will not cost her anything as far as extra rent or utilities. Recently, you ran into Fiona at the gym and she tells you that she has moved into her home office. Fiona is as rational as any other person. As an economics major, you rightly conclude that

In economics, tangible merchandise is referred to as

Which of the following contributes to the efficiency of markets?

Macroeconomics is the study of

Which of the following is a normative economic statement?

What is the difference between economic efficiency and equity?

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays. What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each. What is the opportunity cost of buying a goldfish?

Scenario 1-4 Suppose a cigar manufacturer currently sells 1,500 cigars per week and makes a profit of $3,000 per week. The plant foreman observes, "Although the last 500 cell cigars we produced and sold increased our revenue by $7,500 and our costs by $7,000, we are only making an overall profit of $3,000 per week so I think we need to cut back on production." -Refer to Scenario 1-4. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 500 cigars?

Political candidates often hold fund raisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Is this transaction economically efficient?

Which of the following is a microeconomics question?

Which of the following is a positive economic statement?

Which of the following is not an example of an economic trade-off that a firm has to make?

Which of the following is counted as "capital" in economics?

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. What is Julius's marginal benefit if he decides to stay open for three hours instead of two hours?

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that

Assume that it will cost a plumber an additional $35,000 each year by keeping her shop open for one additional hour per week. What must the additional revenue from keeping the shop open this additional hour per week be to make staying open for the extra hour economically rational?

At a recent company meeting, Ravi Batra, sales manager of Life's a Beach, a surfboard producer, announced, "We have increased our sales by 13 percent in just 9 months." Suppose 9 months ago, its sales amounted to $245,000. What is the value of its sales today?

In market economies, income distribution is always going to be completely equitable.

Based on projections from the U.S. Census Bureau and the Congressional Budget Office,