Exam 1: The Economic Approach

A radio station gives "free money" to those listeners whose names are drawn and announced over the airwaves from postcards the listeners sent into the radio station. Is the money really free for the listener?

The economic way of thinking suggests that if the government imposed a $500 tax on owners of red automobiles,

The economic way of thinking stresses that

Economic analysis is based on the premise that

Isabella wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $1.50 per gallon, the car wash costs $1, but if she buys 10 gallons of gasoline, the car wash is free. For Isabella, the marginal cost of the tenth gallon of gasoline is

When economists use the term ceteris paribus, they are indicating that

If you win the lottery this would be great for you, but if everyone simultaneously won the lottery this wouldn't be nearly as good, why?

If the government provides free schooling for all students, an economist would say education is

A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is

Positive economics

A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he

The Latin phrase "ceteris paribus" means

If a good is scarce,

Which of the following is a positive economic statement?

Every economy must ration goods in some way because of

The fallacy of composition is the incorrect view that

The expression, "There's no such thing as a free lunch," implies that

When price is the rationing criterion, individuals have a strong incentive to

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

In economics, the term "scarcity" refers to the fact that