Exam 1: What Is Economics

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will

The night before a midterm exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night before, you'd have scored 70 percent. What was the opportunity cost of your evening at the movies?

-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

-The above figure reveals

Scarcity is a situation in which

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 ________.

A benefit from an increase in activity is called the

The opportunity cost of attending college includes the cost of

-The above figure graphs the price of a bushel of wheat and housing starts. The graph shows the variables are

What is opportunity cost?

Economics is best defined as the study of how people, businesses, governments, and societies

Explain why both rich and poor people experience scarcity.

When I buy an $12.00 movie ticket rather than two paperback books, the opportunity cost of going to the movie is the two paperback books I did not buy.

If you study 3 hours for an exam, you can raise your score by 30 points. If you study for another 3 hours your score increases by 10 points. And if you study for another 3 hours, your score will increase by 5 more points. A graph displaying this relationship between the number of hours studied and your total exam score would show

A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a horizontal line. From this fact we know that

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

Jane is deciding whether to go to school for 8 weeks this summer. The cost of tuition and textbooks is $1,700 and housing and other expenses will cost her $600. If she does not go to school, she will live in her parents' house for free and they will cover her food and other expenses for her. Also, if Jane does not go to summer school she could work fulltime. But the best job she can get pays only $600 per week, and Jane would only agree to give up her free time for no less than $750 per week. However, if she goes to summer school, she'll have to spend 40 hours a week attending classes and studying. a) What will the summer school cost Jane in terms of money spent? b) What are the opportunity costs of going to summer school that Jane does not pay explicitly? Explain. c) What is Jane's total opportunity cost of going to school this summer? Explain your answer. d) Suppose that if Jane does not go to summer school, she will eventually take the classes anyway. What is Jane's marginal benefit of going to summer school? e) Suppose Jane decides to go to school in the summer. Explain her decision using the concepts of marginal cost and marginal benefit.

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions.

To graph a relationship that involves more than two variables, we use the "ceteris paribus" assumption.

Below is a student's answer to the question "What is microeconomics?" If you were the instructor, how would you correct the student's answer? "Microeconomics is the study of how government influences the choices made by individuals and businesses and of the performance of the whole national economy."