Exam 2: The Key Principles of Economics

If a company's total costs per day increase from $500 to $600 by adding another worker,but its additional benefits are $150,it is sensible to add that additional worker.

According to the application,the corn production exhibited the principle of diminishing returns because:

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $24.If she is following the marginal principle,how many hours should Julianne stay open?

When people interact in markets for their own self interest,it is described as the:

The additional cost resulting from a small increase in some activity is called the:

Is it possible for nominal wages to decrease while real wages increase?

Firms expect to make money on repeat business because:

Figure 2.1 -On the production possibilities curve in Figure 2.1 as agricultural production increases by 200 tons per year from 200 tons to 400 tons and then to 600 tons,the opportunity cost in terms of tons of manufacturing goods:

The value of money or income in terms of the quantity of goods the money can buy is called its:

You rent a copy of a new action/adventure movie.The rental is for seven days and you watch the movie on the first day.You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back.What is your opportunity cost of watching the movie a second time?

If an economy is fully utilizing its resources,it can produce more of one product only if it:

Table 2.2 -Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $12.If she is following the marginal principle,how many hours should Julianne stay open?

Marginal cost is the additional cost resulting from a large or small increase in some activity.

If each of us could produce everything we needed for ourselves,we would be considered to be ________.

When applying the marginal principle,you should pick the level at which the activity's marginal benefit equals its marginal cost.

Suppose that you own a house.What is the opportunity cost of living in the house?

Economists argue that individuals should continue to consume until total benefit equals total cost.

Suppose that a house painter can earn $200 per day painting houses while Jasper Johns earns $5,000 per day painting art.According to the application,Jasper Johns should:

The real-nominal principle states that:

An increase in the benefit from undertaking an activity will result in an increase in the opportunity cost of that activity.