Exam 1: Economics: Foundations and Models

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

In economics,an organization that produces a good or service is called a

One example of human capital is the amount of savings that you have.

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

How are the fundamental economic decisions determined in Canada?

What is an economic model?

Table 1-1 Extra Hours Open Total Revenue (dollars) 1 \ 50 2 75 3 95 4 110 5 120 6 125 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 extra hours the nail salon is open as shown in the table above.She would have to hire a worker for those extra hours at a wage rate of $10 per hour. -Refer to Table 1-1.Using marginal analysis,by how many hours should Lydia extend her nail salon's hours of operations?

Which of the following is a normative economic statement?

A restaurant sells a large soft drink at a fixed price of $1.79.A term used by economists to describe the money received from the sale of an additional large soft drink is

Zane's Vanes is a service that restores old weather vanes.Zane has just spent $125 purchasing a 1920s-era weather vane which he expects to restore and sell for $500 once the work is completed.After having spent $125,Zane realizes that he will need to spend an additional $200 on materials to complete the restoration.Alternatively,he can sell the weather vane without restoring it for $200. -What should he do?

Table 1-4 Hours Open Total Revenue (dollars) 1 \ 35 2 60 3 80 4 92 5 100 6 105 Eva runs a small bakery in the village of Roggerli.She is debating whether she should extend her hours of operation.Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above.She would have to hire a worker for those hours at a wage rate of $12 per hour. -Refer to Table 1-4.Using marginal analysis,how many hours should Eva extend her bakery's hours of operations?

________ is a situation in which a good or service is produced at the lowest possible cost.

Tabitha shares a flea market booth with her sister.Her share of the rent is $150 per month.She is considering moving to her own,larger booth which she will not have to share with anyone.The larger booth rents for $450 per month.Recently,you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth.Tabitha is as rational as any other person.As an economics major,you rightly conclude that

Political candidates often hold fundraisers by charging "per plate" for dinner.Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate.Does this transaction benefit both parties?

If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8,the slope of this line is

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

Table 1-6 Hours Open Total Revenue (dollars) 1 \ 275 2 375 3 450 4 500 5 530 6 550 Ivan runs a custom jewelry shop in Sparkle City.He is debating whether he should extend his hours of operation.Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $25 per hour. -Refer to Table 1-6.What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours?

Suppose the extra cost for a company to advertize for one extra day each week on a local TV station is $1,500.Then,the company should advertize on that additional day if it can generate total revenue of $1,500 each week.

Suppose when the price of hybrid automobiles rises,consumers buy fewer hybrid automobiles.This implies that

Table 1-5 Hours Open Total Revenue (dollars) 1 \ 40 2 65 3 80 4 90 5 95 6 98 Julius runs a small tailor shop in the city of Bloomfield.He is debating whether he should extend his hours of operation.Julius figures that his sales revenue will depend on the number of additional hours the tailor shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $18 per hour. -Refer to Table 1-5.What is Julius's marginal cost if he decides to stay open for three hours instead of two hours?