Exam 1: Ten Principles of Economics: Part A

Tracy quits her job,which pays $25,000 a year,to finish her college degree.Her annual college expenses are $12,000 for tuition and fees and $1,000 for books.What is her opportunity cost of attending college for the year?

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors.The company's cost will be $30,070 if it produces an additional heart rate monitor.The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6.What is the company's marginal cost?

Rational people make decisions "at the margin" by comparing ------.

What does the "invisible hand" refers to?

Scenario 1-4 You have the afternoon free.You have a choice between going to the movies with a friend or studying economics for three hours.If you go to the movies,you will spend $12.00 on a ticket and $4.75 on popcorn.If you choose to study economics for three hours,you will raise your exam grade by 15 points. -Refer to Scenario 1-4.What is your opportunity cost of studying economics?

The term ------ refers to a small incremental adjustment to an existing plan of action.

What does the term "marginal change" mean?

Zack quits his job at a consulting firm,which pays $40,000 a year,to enroll in a two-year graduate program.His annual school expenses are $30,000 for tuition,$2,000 for books,and $600 for food.What is his opportunity cost of attending the two-year graduate program?

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors.The company's cost will be $30,070 if it produces an additional heart rate monitor.The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6.What is the company's average cost?

Economists use the term ------ to refer to fluctuations in economic activity,such as employment and production.

Explain how government policies that redistribute income from the rich to the poor might reduce efficiency.

Explain how trade with other countries is beneficial.

Melinda quits her job at a bank,which pays $30,000 a year,to enroll in a two-year graduate program.Her annual school expenses are $22,000 for tuition and fees and $2,000 for books.What is her opportunity cost of attending the two-year graduate program?

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators.The company's cost will be $35,070 if it produces an additional graphing calculator.The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3.What is the company's average cost?

Give an example of government intervention that is intended to improve equality.

Consider two countries,Muria and Zenya.In Muria total annual output is worth $800 million and people work 40 million hours.In Zenya total annual output is worth $900 million and people work 50 million hours.In which country is productivity higher?

How does the study of economics depend upon the phenomenon of scarcity?

Scenario 1-5 Suppose that you have a choice between going to the movies with a friend for three hours or working at your job.If you go to the movies,you will spend $12 on a ticket and $6 on popcorn.If you choose to work,you will earn $10 an hour. -Refer to Scenario 1-5.What is your opportunity cost of going to the movies?

Scenario 1-1 You have the afternoon free.You have a choice between going to the movies with a friend or studying economics for three hours.If you go to the movies,you will spend $8.00 on a ticket and $4.50 on popcorn.If you choose to study economics for three hours,you will raise your exam grade by 10 points. -Refer to Scenario 1-1.What is your opportunity cost of going to the movies?

What are the two reasons for the government to intervene in a market?