Exam 1: Economics: Foundations and Models

Economists assume that rational behavior is useful in explaining choices people make

Automobile manufacturers produce a range of automobiles such as sports utility vehicles,luxury sedans,pickup trucks and compact cars.What fundamental economic question are they addressing by making this range of products?

A firm's technology may depend on which of the following factors?

Which of the following is a normative economic statement?

Which of the following is a positive economic statement?

What is meant by the statement that "optimal decisions are made at the margin"?

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?

Suppose the U.S.government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000.These doctors would be exemplifying the economic idea that

On a two-dimensional graph,________ allows for the effects of additional variables.

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

Microeconomics is the study of

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 benefit if she decides to stay open for two hours instead of one hour?

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

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

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

In 2010,Hooverville consumed 205,000 tons of sugar.In 2011,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Define microeconomics.

Economists assume that rational people do all of the following except

What is a marginal benefit?

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