Exam 1: The Economic Approach

While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be

Which of the following is true?

Some individuals or families can become completely saturated with a service such as television. This suggests that

"The money and resources currently being devoted to the War on Terrorism reduces the quantity of other goods that we are able to supply." This statement most clearly illustrates which of the following?

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

Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he

When economists use the term ceteris paribus, they indicate

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless

Household production is more likely to occur when

If a good is scarce,

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

The opportunity cost of going to college is

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he

The statement, "John buys more of good X as his income increases, ceteris paribus," means

A fact based on observable phenomenon that is not influenced by differences in personal opinion is called

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

Which of the following is a positive economic statement?

When economists say that people choose rationally, this means

If economics is correct in its assumption that people are rational, why then would anyone choose to smoke cigarettes?