Exam 1: What Is Economics

Suppose that you are spending two hours a day studying economics, and your grade is 85 percent. You want a higher grade and decide to study for an extra hour a day. As a result, your grade rises to 90 percent. Your marginal benefit is the

-In the above figure, the relationship between costs and quantity is negative

A scatter diagram shows the

Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later, though he could continue to play football at $2 million a year, he quits football to make movies for $3 million a year. His opportunity cost of playing football at graduation was and eight years later the opportunity cost of making movies was .

The loss of the highest-valued alternative defines the concept of

Positive economic statements

-In the above, which figure shows a line with a slope of 1.0?

Total household income (dollars) Total consumption (dollars) 30,000 27,000 40,000 35,000 50,000 38,000 -The data in the table above shows the relationship between the Joneses? total consumption and total household income. Based on these data, total consumption varies

-In the above figure, the slope across the arc between c and d is

-Using the above figure, the origin is at which point?

The vertical axis of a graph shows only positive values)

-In the above figure, when the interest rate is 8 percent and household income is $40,000, household consumption is

The tools, instruments, machines, and buildings that people use to produce goods and services are called human capital.

The statement ʺManagers with a college education earn $18 an hour while ski instructors who did not complete college earn $10ʺ is

You decide to take a vacation and the trip costs you $2,000. While you are on vacation, you do not go to work where you could have earned $750. In terms of dollars, the opportunity cost of the vacation is

When Susan makes the statement, ʺThe government should spend less money to take care of national parks,ʺ she is

Your friend is preparing for this exam and in your practice session makes the following statement: ʺInstead of attending microeconomics class for two hours, Kiki could have played tennis or watched a movie. Therefore, the opportunity cost of attending class is the tennis and the movie she had to give up.ʺ Is your friendʹs analysis correct or not? Explain your answer.

If two variables are positively related, then

-In the above figure, the relationship between x and y is

A positive relationship exists between two variables if