Exam 1: What Is Economics

As a curve approaches a maximum point, the slope will

If variable x always increases when variable y decreases, x and y are said to be

Suppose you are working four nights per week at your courses and your grade point average is 3.5. You want a higher grade and decide to study an extra night each week. Your GPA now rises to 3.8. What is your marginal benefit from studying for one additional night a week?

-In the above figure, the curve has a slope that is .

Joe likes to sleep late in the mornings and play tennis in the afternoons. The opportunity cost of Joe attending his morning class for one hour is

-In the above figure, while moving along the line showing the relationship between household income and expenditure,

An art museum decides to offer tours by having visitors listen to cassette tapes rather than have tour guides. The museum is answering the part of one of the two big economic questions.

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

Which of the following is a normative statement?

If the price of apples is on the vertical axis and the quantity of apples demanded is on the horizontal axis, the slope between two points on the line describing the relationship between price and quantity is

-In the above, which figure shows a linear relationship?

Which of the following is NOT part of the first big economic question?

When a country decides to produce fewer bombers and more public housing projects, it is answering the part of one of the two big economic questions.

Opportunity cost means the

-The relationship in the above figure suggests that when the interest rate is 5 percent,

Which of the following is a macroeconomic issue?

Factors of production include all of the following EXCEPT .

From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is

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

Suppose Canon Inc. decided to invest 45 billion yen in developing and launching a new model of its digital camera, expecting that it will bring additional sales of 60 billion yen. The company has already invested 38 billion yen when the marketing department suddenly finds out that the introduction of a similar camera by Sony will reduce Canonʹs expected additional sales to 30 billion yen. The companyʹs management is trying to decide whether to continue investing in the new product or close the project. Canon hires you as an economic consultant. So, think like an economist to help the companyʹs management make their decision: a) At this point in time, what is Canonʹs marginal cost of introducing the new product? b) What is Canonʹs marginal benefit from introducing the new product? c) Will you advise Canon to finish the project and introduce the new product? Why or why not? What principles of economic thinking will help you analyze the situation and make the right choice?