Exam 1: What Is Economics

Factors of production include all of the following EXCEPT

"When OPEC increases the supply of oil to the market, the price of gasoline falls." This is an example of

The term "opportunity cost" points out that

-The above figure plots income and consumption in a nation. In 2007

A scatter diagram will be most useful

When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions.

The vertical axis in a graph

-Graph the data in the table above in the figure. Label the axes. a) Is the relationship between X and Y positive or negative? b) What is the slope when X = 4? c) What is the slope when X = 8?

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

The statement "An increase in the price of gasoline will lead to a decrease in the amount purchased" is

-Using the data in the above table

Which of the following creates an incentive to increase the amount of an activity?

Misty has the option of purchasing one of three products: Brand A, Brand B, or Brand C. Each costs ten dollars. If she decides that Brand A meets her needs best, then the opportunity cost of this decision is

-In the above, a positive relationship between price and quantity is shown in

Today, Julie attended her 12:30 Economics class. If she hadn't gone to class, Julie would have gone out to lunch with friends. She had other options; she could have worked or slept in. Julie's opportunity cost of going to class is the

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

What is the difference between microeconomics and macroeconomics?

One economist says that raising taxes on gas would be in the social interest. What does this economist mean?

The slope of a line is the change in the y-axis variable divided by the change in the x-axis variable.

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.