Exam 1: The Economic Approach

The opportunity cost of an action is

Which one of the following statements most accurately indicates the basic motivation for behavior?

When an economist states a good is scarce, she means that

A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is

Household production is more likely to occur when

Economics is primarily the study of

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

When economists say an individual displays economizing behavior, they simply mean that the individual is

The opportunity cost of going to college is

When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing

Which of the following is a positive economic statement?

"If Tom had twice as much money, he could consume twice as much. If everyone had twice as much money, they could consume twice as much." This quote illustrates

The basic ingredients in any economic decision are

If scarcity were eliminated,

Which of the following is a positive economic statement?

A restaurant offers an "all you can eat" lunch buffet for $12. Jim has eaten three servings and is trying to decide whether or not to go back for a fourth. The economic way of thinking suggests that Jim should go back for the fourth serving if and only if

What is the best test of an economic theory?

The difference between positive economic statements and normative economic statements is that

Economics is primarily the study of

Which of the following statements is correct?