Exam 1: What Is Economics

-In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases,

-In the above figure, the axis breaks are used

-Graph the data in the table above in the figure. Label the axes. a) Is the relationship between X and Y positive or negative? b) What is the slope when X = 4? c) What is the slope when X = 8?

When the government hires people to serve in the army, these people are no longer available to do other work. This choice illustrates the concept of

John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?

-In the above figure, the axis break in the x-axis

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue

-In the above figure, if there is a negative relationship between the variables x and y, which of the graphs above can be used to indicate this?

Keeping in mind economists' definition of factors of production, which of the following is NOT a factor of production?

"The difference between positive and normative statements is that a positive statement is always true while a normative statement might or might not be true." True or false? Explain.

The value of the y-coordinate of a point in a graph is the length of a line from the point to the

If an increase in x (the variable on the horizontal axis) from 6 to 8 units causes a decrease in y (the variable on the vertical axis) from 4 to 3 units, the slope equals

A student athlete is deciding whether to work out for an extra hour. Her marginal benefit from another hour of exercise

In economics we learn that

-In the above figure, the slope at point b

Explain why both rich and poor people experience scarcity.

Your student association is looking for an auditorium to rent for an all-day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it. The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitorial services for the conference. You know that no one else wants to rent the Center on that day and you think that the price that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answer this question and to convince the manager to accept your offer: a) If you rent the Center, what will be the university's marginal cost of renting the center to you? b) If you rent the Center, what will be the university's marginal benefit of renting the center to you? c) What amount of rent should you offer? Convince the manager to accept your offer.

-The slope of the line shown in the above figure is

Because we face scarcity, every choice involves