Exam 1: Economics: Foundations and Models

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service.For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package.What is Allison's marginal benefit if she sells a basic 1-color job?

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky, and therefore carry a higher cost than not retiring.By using all available information as they act to achieve their goals, these teachers are exemplifying the economic idea that

Consider the following statements: A.Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area. B.Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards. C.Citrus growers produce more oranges when the selling price of oranges falls. Which of the above statements demonstrates that economic agents respond to incentives?

Microeconomics is the study of

Even if the population declines, scarcity will still exist.

Table 1-2 Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of extra hours the flower shop is open as shown in the table above. She would have to hire a worker for those extra hours at a wage rate of $16 per hour. -Refer to Table 1-2.Using marginal analysis, by how many hours should Thuy Anh extend her flower shop's hours of operations?

One example of human capital is the amount of skills that you have.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is

In economics, the term "equity" means

Explain why economics is considered a social science.

What is an economic variable?

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Damian shares a small food truck with his sister.His share of the expenses is $500 per month.He has decided to get his own, newer food truck which he will not have to share with anyone.His expenses for the newer truck are $1,400 per month.Damian is as rational as any other person.As an economics major, you rightly conclude that

The branch of economics which studies the behavior of entire economies is called

The highest-valued alternative that must be given up to engage in an activity is the definition of

Figure 1-3 -Refer to Figure 1-3.Calculate the area of the trapezoid X.

Scarcity is a problem that will eventually disappear as technology advances.

Suppose the extra cost for a town to lower its speed limit by 5 mph is $20 per day.Then, the town should lower the speed limit if it can generate an additional benefit of $20 per day.

If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is

A college must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of "what to produce."