Exam 1: Economics: Foundations and Models

On a two-dimensional graph,________ allows for the effects of additional variables.

Which of the following statements is false?

In economics,the accumulated skills and training that workers have is known as

Where do economic agents such as individuals,firms and nations,interact with each other?

Since 1994,obesity rates in the United States

Economists reason that the optimal decision is to continue any activity up to the point where the

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 cost if she decides to stay open for two hours instead of one hour?

Which of the following is a positive economic statement?

Microeconomics is the study of

Allocative efficiency is achieved when firms produce goods and services

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

________ is a problem that occurs when one concludes that a change in variable X caused a change in variable Y when in actual fact,it is a change in variable Y that caused a change in variable X.

Which of the following is not an example of an economic trade-off that a firm has to make?

In 2010,Hooverville consumed 205,000 tons of sugar.In 2011,sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

Economists assume that rational behavior is useful in explaining choices people make

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

"The distribution of income should be left to the market" is an example of a positive economic statement.

Scenario 1-1 Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week.A manager at the plant observes,"Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700,we are still making an overall profit of $5,000 per week so I think we're on the right track.We are producing the optimal number of cell phones." -Refer to Scenario 1-1.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 3,000 cell phones?

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is false?