Exam 1: Exploring Economics

Heather has one employee in her sweater shop who can sew six sweaters a day.When she hires a second person,the two employees can make 10 sweaters together.As it relates to thinking at the margin,the extra benefit received from hiring a second worker is:

Tradeoffs occur because resources are scarce.

Microeconomics looks at how markets are structured.

Economics is a:

At the start of the war in Iraq,homeowners in the United States found it difficult to find plywood.The U.S.military,at the same time,was constructing buildings in Iraq.How do the two situations reflect economic tradeoffs?

_____ is the fairness of various issues and policies.

When the government chooses to use resources to build tourist centers,the chosen resources are no longer available to build highways.This BEST illustrates the concept of:

Macroeconomics deals with all of the following,EXCEPT:

The purpose of an economic model is to:

Marginal analysis exists when a person continues to make a decision until the value of the outcome is zero.

How do the concepts of scarcity and opportunity cost relate to each other?

Economists point out that the quality of economic decisions depends on the quality of the information underlying those decisions.

It is impossible to have a conflict between allocative efficiency and production efficiency.

Why is it important for students to study economics?

If two variables are correlated with one another,it is possible but not necessary that one variable causes the other.

Use the following to answer questions Figure: Sales and Advertising -(Figure: Sales and Advertising)The graph shows the advertising expenditures and the resulting sales (in bottles)of a new caffeinated beverage called Jump.The slope for the equation graphed is 3,000.

Explain the meaning of the phrase "People respond to incentives."

When economists say that all societies face scarcity,they are describing:

When the individuals who get a good or service are the ones who desire that product the most,the economy is experiencing:

Changes in stock prices are correlated with the amount of rainfall.Therefore,rainy weather causes the stock market to fall.