Exam 1: Economics: Foundations and Models

Table 1-1 Lydia runs a small nail salon in the town of New Hope. She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $10 per hour. -Refer to Table 1-1.What is Lydia's marginal cost if she decides to stay open for two hours instead of one hour?

Economists assume that individuals

Where do economic agents such as individuals,firms and nations,interact with each other?

Microeconomics is the study of

Marginal analysis involves undertaking an activity

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

Consider the following economic agents: a.the government B)consumers C)producers Who,in a centrally planned economy,decides what goods and services will be produced with the scarce resources available in that economy? A) the government B) producers C) consumers D) consumers and producers E) the government, consumers and producers

Which of the following is a positive economic statement?

Which of the following statements about economic resources is true?

What is the "omitted variable" problem in determining cause and effect?

Macroeconomics is the study of

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.

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

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?

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

Explain why economics is considered a social science.

The machines workers have to work with are considered

Which of the following is an example of an activity undertaken by an entrepreneur?

Assume that a doctor can earn an additional $20,000 of revenue each year from keeping his office open for one additional hour per week.What must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?

Which of the following is a macroeconomics question?