Exam 2: The Key Principles of Economics

You have an hour between your economics and math classes.What is the opportunity cost of that time if you use it to do math homework?

When economists use the term "marginal," they usually refer to

Figure 2.4 -Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that Joe's marginal cost of staying open per hour is $40.How many hours should Joe stay open?

Table 2.3 -Refer to Table 2.3.The marginal product of the 2nd worker is

Suppose you earn $50,000 per year in 2015.If your income increases by 8 percent while inflation increases by 10% in 2016,then calculate how much your real income has increased between 2015 and 2016.

Five years ago,Tammy always took a big envelope full of coupons to the grocery store.Now that she has a child in pre-school,she rarely brings coupons.Which of the following is NOT a possible explanation of this change in her behavior?

Diminishing returns occur because

The saying that "There is no such thing as a free lunch" refers to

The principle that states that the cost of something is equal to what is sacrificed to get it is known as the

When people interact in markets for their own self-interest,it is described as the

When Jimmy produces one guitar his costs total $250.When he produces two guitars his total costs are $400.This means that Jimmy's marginal cost of producing the second guitar is $200.

If an economy is fully utilizing its resources,it can produce more of one product only if it

The opportunity cost of going to college

Table 2.4 -Refer to Table 2.4.The marginal product of the 3rd tank of fertilizer is

Figure 2.3 -In Figure 2.3,point B

Recall the Application about the use of fertilizer and its impact on crop yields to answer the following question(s). The table is taken from this Application. Fertilizer and Corn Yield -Recall the Application.Based on the data in the table,production exhibited

If the government estimates that the marginal cost of building a bridge is $100 million,while the marginal benefit is $150 million,the marginal principle dictates that the government should

Table 2.4 -Refer to Table 2.4.The principle of diminishing returns sets in with the addition of the ________ tank of fertilizer.

Suppose a ticket to a concert costs $39,and parking costs $5.Further,in order to watch the concert,you must miss 2 hours of work where your hourly wage is $15 per hour.The total opportunity cost of watching a concert is

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of cleaning houses