Exam 1: Economics: Foundations and Models

Which of the following is a microeconomic question?

If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon,what is the percentage change in price?

All economic questions arise from the fact that resources are unlimited.

Of the following examples,which would most likely be performed by an economist working for the Federal Reserve Bank of San Francisco?

Which of the following is an example of a "how much" decision?

Article Summary In a January, 2017 report, the World Economic Forum stated that the growing income gap has become one of the biggest threats to the global economy and cannot be remedied solely by higher economic growth. Although income inequality has fallen over the past 30 years on a global level, in high-income countries like the United States and the United Kingdom, the top 1% of income earners have benefitted disproportionately from economic growth. This has led a growing belief that the traditional model for economic growth does not result in a population-wide increase in income. According to the report, "The growing mood of anti-establishment populism suggests we may have passed the stage where [reviving economic growth] alone would remedy fractures in society: reforming market capitalism must also be added to the agenda." Source: Lauren Gensler, "Rising Income Inequality Is Throwing The Future Of Capitalism Into Question, Says World Economic Forum," Forbes, January 11, 2017. -Refer to the Article Summary.The article discusses income inequality and how economic growth alone is no longer resulting in a more equitable distribution of income.If governments increased equity by reducing the incomes of high-income people and increasing the incomes of the poor,would this necessarily increase efficiency?

Table 1-4 Hours Open Total Revenue (dollars) 1 \ 35 2 60 3 80 4 92 5 100 6 105 Eva runs a small bakery in the village of Roggerli. She is debating whether she should extend her hours of operation. Eva figures that her sales revenue will depend on the number of additional hours the bakery is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $12 per hour. -Refer to Table 1-4.What is Eva's marginal cost if she decides to stay open for two hours instead of one hour?

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps,then the difference of $300 is the marginal cost of producing the 5th lamp.

A college must decide if it wants to offer more evening and weekend classes.This decision involves answering the economic question of "for whom to produce."

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,it is known as

Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.college tuition rates b.farm subsidies c.national income d.automobile prices e.air traffic congestion f.economic recession

Making "how much" decisions involves

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Which of the following statements about the economic decisions consumers,firms,and the government have to make is false?

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called

Zane's Vanes is a service that restores old weather vanes.Zane has just spent $125 purchasing a 1920s-era weather vane which he expects to restore and sell for $500 once the work is completed.After having spent $125,Zane realizes that he will need to spend an additional $200 on materials to complete the restoration.Alternatively,he can sell the weather vane without restoring it for $200.What should he do?

When voluntary exchange takes place,only one party gains from the exchange.

Figure 1-5 -Refer to Figure 1-5.Calculate the area of the triangle A.

Which of the following is a positive economic statement?