Exam 1: Economics: Foundations and Models

Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants.

Society faces a trade-off in all of the following situations except

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

A university must decide if it wants to offer more internet-based classes.This decision involves answering the economic question of 'what to produce.'

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky,and it therefore carries a higher cost than not retiring.By using all available information as they act to achieve their goals,these teachers are exemplifying the economic idea that

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

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

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

Suppose a doctor can earn an additional $25 000 in revenue per year by keeping her office open on Sundays.At what additional cost would keeping the office open on Sundays not be considered economically rational?

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

Which of the following questions or statements regarding medical school is normative?

What is opportunity cost?

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

The relationship between consumer spending and disposable personal income is

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Consider the following statements: a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area. b. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards. c. Citrus growers produce more oranges when the selling price of oranges falls. Which of the above statements demonstrates that economic agents respond to incentives?

The distribution of income primarily determines which of the fundamental economic questions?

Positive analysis is concerned with 'what ought to be',while normative analysis is concerned with 'what is'.

Scarcity is a problem that will eventually disappear as technology advances.

The government makes all economic decisions in a mixed economy.