Exam 1: Economics: Foundations and Models

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

Explain the difference between a firm's revenue and its profit.

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10,the slope of this line is

An economic model is a simplified version of reality used to analyze real-world economic situations.

Suppose when the price of laptops fall,college students buy more laptops.This implies that

If the marginal cost of keeping a doctor's office open one additional hour per day is $200,then the doctor should keep the office open for one extra hour

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon,what is the percentage change in price?

Explain the economic idea that "people respond to incentives."

What is the difference between an invention and an innovation?

Positive analysis is concerned with "what ought to be",while normative analysis is concerned with "what is."

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

In economics,the term "equity" means

Which of the following is a problem inherent in centrally planned economies?

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

Which of the following is a normative economic statement?

In economics,choices must be made because we live in a world of

The government makes all economic decisions in a mixed economy.

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

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?