Exam 1: What Is Economics

A horizontal line has a slope of

The optimal degree of abstraction depends on the objective of the analysis.

One of the consequences of preventing wages from falling in the European Union has been growing unemployment.

Jack, an outstanding high school baseball player, has to decide whether to sign a contract with a major league baseball organization or to go to college. If Jack is determining his opportunity costs to go to college instead, he would include

There are possible policies that could significantly reduce income inequality but opponents argue that such policies would be likely to lead to

The slope of a curved line differs from that of a straight line in that

Economic theory simplifies relationships to explain how the relationships interact.

Productivity growth is the main cause of rising living standards.

Economists are often required to make unrealistic assumptions concerning the problems they are investigating.

Opportunity cost is the value of the next best alternative to a given choice.

You have just bought a used car and drive away satisfied that you've made a good deal on the purchase. What would an economist say about your "gain" on the deal?

A theory is a deliberate simplification or abstraction of factual relationships.

How is a production indifference map helpful?

In Egypt, in 1970, the Aswan Dam was completed. By preventing the annual flood of the Nile (thereby providing millions of acres of arable land)and by providing electricity, the dam was expected to raise the living standard of the Egyptian people-and it has. However, it has also led to a rise in the water table, which causes Egypt's limestone structures, including the pyramids, to absorb more salt water and to suffer serious erosion from crystallized salts. Combined with air pollution and traffic vibration, this erosion is turning the pyramids to dust. Economists analyze this type of problem with the concept of

Slope is measured as run\rise.

If Taiwanese workers can produce all goods at lower wages than American workers, then

Both parties gain in a voluntary exchange.

There are never any adverse consequences of government attempts to modify the laws of supply and demand.

A line that slopes downward from left to right has a positive slope.

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college. How would an economist look at the matter?