Exam 1: Economics: Foundations and Models

Scenario 1-2 Suppose a cigar manufacturer currently sells 1,500 cigars per week and makes a profit of $3,000 per week.The plant foreman observes,"Although the last 500 cigars we produced and sold increased our revenue by $7,500 and our costs by $7,000,we are only making an overall profit of $3,000 per week so I think we need to cut back on production. -Refer to Scenario 1-2.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 500 cigars?

The government makes all economic decisions in a centrally planned economy.

Refer to the Article Summary.The article discusses income inequality,and for some people this means a more equitable distribution of income is needed in the economy.What is meant by a more equitable distribution of income?

What is an economic market?

Explain the term "economics."

How are the fundamental economic decisions determined in Cuba?

Which of the following is a normative economic statement?

Define macroeconomics.

Technological progress has made it possible for firms such as Apple and Alivecor to develop small electronic devices,including smartwatches,smartphones,and products that can be attached to the smartwatches and smartphones,to serve consumers who have become more health conscious and wish to monitor various health conditions.These firms are reacting to which of the three key economic ideas?

Examining the conditions that could lead to economic growth is an example of a macroeconomics topic.

All ________ economies have been political dictatorships.

Which of the following is a macroeconomics question?

Optimal decisions are made at the point where marginal benefit is maximized.

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?

What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

Competition among sellers generates

Which of the following is a microeconomics question?

All of the following questions or statements regarding medical school are positive except:

Which of the following is a normative economic statement?

Table 1-3 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 1-3.Using marginal analysis,how many hours should Ivan extend his hours of operations?