Exam 1: What Is Economics

-The figure above shows

In economics, normative statements are about

-In the above figure, tax revenue is at a maximum when the tax rate is

China's population is over 1.5 billion, while the population of the United States is about 300 million. This fact means that China has much more human capital than the U.S. does. True or false? Explain your answer.

The term "opportunity cost" points out that

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.

An example of a question that might be explored in microeconomics is to determine

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

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, the slope across the arc between a and b is

An economic system in which the government decides what, how, and for whom to produce, directs workers to jobs, and owns all the land and capital is

-If we use the numbers in the above table to draw a graph, with the price on the vertical axis and the quantity on the horizontal axis, the line relating price and quantity has a slope of

Suppose that for the past two months, you have studied economics one hour a day. You now decide to study economics two hours a day. For the past two months

Which of the following college majors experience a higher mid-career salary than economics?

Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is positive and is less than 1. This slope means that a change in x is associated with

On the horizontal axis of a graph, generally

-The slope of the line in the above figure is

Which of the following is NOT an example of an opportunity cost?

-In the above figure, x is

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