Exam 1: The Economic Approach

While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00,Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75.She thinks to herself,"Is it worth the extra 25 cents to get the medium fries?" To an economist,Sally's decision is an example of

Scarcity implies that

Economics is primarily the study of

The economic way of thinking stresses that

What is the best test of an economic theory?

To say that people make marginal decisions means that

Competitive behavior

When a good is scarce,

The basic difference between macroeconomics and microeconomics is that

Which of the following is true?

Which of the following is a positive economic statement?

Just before class,Jim tells Stuart,"Stuart,you shouldn't skip class today because you have paid tuition to enroll in the class." Stuart ignores Jim's advice,and instead makes the decision of whether to attend based on what he feels he'd be missing that day in class relative to his value of the extra time he could have to finish the video game he is playing.To an economist,Stuart is

If a good is scarce,

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?

The value of a good is

Economic analysis assumes that

The value of a good

Ralph wants to buy some milk and a box of cereal.If Ralph buys 4 gallons of milk at $3.00 per gallon,the box of cereal costs $2.00.If he buys 5 gallons of milk,the box of cereal is free.For Ralph,the marginal cost of buying a fifth gallon of milk is:

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