Exam 1: Economics: Foundations and Models

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.

Table 1-3 Extra Hours Open Total Revenue (dollars) 1 \ 70 2 120 3 160 4 184 5 200 6 210 Santiago runs a comic book store in the town of East Arbor.He is debating whether he should extend his hours of operation.Santiago figures that his sales revenue will depend on the number of extra hours the store is open as shown in the table above.He would have to hire a worker for those extra hours at a wage rate of $18 per hour. -Refer to Table 1-3.Using marginal analysis,by how many hours should Santiago extend his store's hours of operations?

The branch of economics which studies how households and firms make choices,interact in markets,and how government attempts to influence their choices is called

Which of the following is counted as "capital" in economics?

Which of the following is a positive economic statement?

Consider the following statements: A.Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. B.Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. C.Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

Which of the following is motivated by an efficiency concern?

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

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

Billie's Billiard Barn has seen its business slow down ever since Patti's Ping Pong Parlour opened up across the street.Since the opening of Patti's Ping Pong Parlour,the opportunity cost of shooting pool at Billie's Billiard Barn has ________ for Billie's customers who also like to play ping pong.

Consumers make all economic decisions in a mixed economy.

Productive efficiency is achieved when firms produce goods and services

The decisions Apple makes in determining production levels for its iPhone is an example of a microeconomic topic.

What is a market economy?

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky,and therefore carry 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

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps,then the difference of $300 is the marginal cost of producing the 5th lamp.

In an effort to serve consumers who have become more health conscious,a number of firms have begun developing small electronic devices which allow people to monitor various health conditions.These firms are reacting to which of the three key economic ideas?

In economics,the term ________ means "additional" or "extra."

In economics,tangible merchandise is referred to as

Assume that a health spa can earn an additional $35,000 of revenue each year from advertising every day in a local newspaper.What must the additional cost of this daily advertising be to make this advertising economically rational?