Exam 1: The Role and Method of Economics

Kelly is a lawyer and also an excellent typist. She can type 120 words per minute but she has all the legal work she can handle at $75 per hour. Kelly's friend Todd works as a waiter earning $25 per hour. Todd would like some typing work but can only type only 60 words per minute. What is the most efficient scenario?

Which of the following is most likely a topic of discussion in a microeconomics course?

Ceteris paribus is a Latin expression that means "holding everything else constant."

"Government should do all it can to slow the process of global warming." Is this a positive or normative statement? Explain your answer.

"When one hockey team spends a large sum of money acquiring better players, it is better off. If all teams do the same thing, all of them are better off." What is this statement an illustration of?

Saudi Arabia has a comparative advantage in oil production and China has a comparative advantage in electronics. Which of the following statements about specialization and trade is NOT correct?

What is the term for the branch of economics that studies the decisions made by individual firms and consumers?

Which of the following statements describing the relationship between theory and hypothesis is most accurate?

Under what condition does a nation have a comparative advantage over another nation in the production of cars?

What does the opportunity cost of an action include?

What is a hypothesis?

Which of the following lies primarily within the realm of macroeconomics?

If Spain can produce a particular product at a lower relative cost than Portugal, what kind of advantage does Spain have?

TABLE 1-5 -Refer to Table 1-5. What does this table demonstrate about price and quantity at each combination?

If people follow the rule of rational choice, on what basis will they make their decisions?

What is the opportunity cost of an action equal to?

What does scarcity imply?

Economists typically use controlled experiments to learn about how the economy functions.

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

On what basis is the best test of an economic theory?