Exam 2: The Key Principles of Economics

As more and more of a variable input is combined with some fixed inputs,additions to the total output decline.

The principle that individuals and firms pick the activity level where the incremental benefit of that activity equals the incremental cost of that activity is known as the:

Farmer Bill grows corn on his 27-acre farm.To increase production,he puts more and more fertilizer on the corn.What does the marginal principle say will happen?

Suppose you earn $50,000 per year in 2009.If your income increases by 8 percent while inflation increases by 10% in 2010,then calculate how much your real income has increased between 2009 and 2010.

If the nominal minimum wage is unchanged while prices rise,then the real minimum wage:

Figure 2.4 -Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 5 hours per day.If he is following the marginal principle,what must his marginal cost be?

The principle of diminishing returns does NOT apply to labor when all inputs are allowed to vary because:

According to the marginal principle,a rational individual should not undertake an economic activity if the:

Table 2.3 -Refer to Table 2.3.The marginal product of the 4th worker is:

The saying that "There is no such thing as a free lunch" refers to:

The principle of opportunity cost:

The principle of voluntary exchange is the concept that a voluntary exchange between two people makes both people better off.

Based on the Application,if the total cost of sailing a ship faster exceeds the total benefit of sailing the ship faster,then:

If the nominal minimum wage is unchanged while prices fall,then the real minimum wage:

Using figures from the Application,$5000 (which is the market alue of all your equipment)is the:

When Jimmy produces one guitar his costs total $250.When he produces two guitars his total costs are $400.This means that Jimmy's marginal cost of producing the second guitar is $200.

Suppose your bank pays you 5% interest per year on your savings account while prices increase by 3% per year over that time.Approximately how much nominal value do you gain by keeping $100 in the bank for a year?

Suppose a ticket to a concert costs $39,and parking costs $5.Further,in order to watch the concert,you must miss 2 hours of work where your hourly wage is $15 per hour.The total opportunity cost of watching a concert is:

As bags of nitrogen applied went from 0 to 1 to 2 to 3 to 4,crop yield went from 85 to 120 to 135 to 144 to 147 bushels per acre or production exhibited:

A principle is a self-evident truth that most people readily understand and accept.