Exam 1: Economics: Foundations and Models

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

What is the "reverse causality" problem in determining cause and effect?

How does a market system prevent people from getting as many goods and services as they wish?

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,it is known as

Which of the following statements about economic resources is false?

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?

Marginal benefit is the benefit that your activity provides to someone else.

Which of the following are positive economic statements and which are normative economic statements? a.An increase in the minimum wage causes unemployment. b.The government should raise the minimum wage above $7.25 per hour. c.The prolonged recession has caused the unemployment rate to reach a 30-year high. d.Interest rates need to be lower for the economy to emerge from the recession. e.Inflation has decreased since the onset of the recession. f.Once the recession has ended,interest rates should increase to assure that inflation does not go up.

You explain to your friend Haslina,who runs a catering service called "Meals in a Zip," about an economic theory which asserts that consumers will purchase less of a product at higher prices than they will at lower prices.She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase in sales.How would you respond to Haslina?

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

Which of the following is a positive economic statement?

Economics promotes which of the following as the way to make the best decision?

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

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

Trade-offs force society to make choices when answering what three fundamental questions?

There is often a trade-off between

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.How can Dr.Goldfinger strive to achieve this productive efficiency?

"A decrease in the price of digital cameras will decrease the demand for camera film." This statement is an example of a positive economic statement.

Define allocative efficiency.Explain the significance of this concept in economics?

Which of the following is a normative economic statement?