Exam 1: Thinking Like an Economist

Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below. Muurs in East Orchard Number af Apples Per Hour Hours in West Orchard Number d Apples Per Hour 1 40 1 10 2 32 2 10 3 25 3 10 4 20 4 10   What is the marginal benefit to Frank of the 2?? hour he spends picking in the east orchard?

The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.   The marginal benefit (in terms of extra donations)of the 2ⁿᵈ employee is:

Economists believe the Cost-Benefit Principle is:

The average benefit of n units of an activity is the:

Choosing to study for an exam until the extra benefit (e.g., improved score)equals the extra cost (e.g., the value of foregone activities)is:

Your scholarship depends on your maintaining a 3.5 cumulative GPA. Your GPA for last semester was 3.6, which brought your cumulative GPA down. What must be true?

The marginal cost of an activity is the:

Positive economic principles are those that:

You won a free ticket to see the latest Star Wars movie this Friday night (which you can costlessly resell for its face value of $15). Your favorite band is also performing on Friday and is your only alternative activity. Friday is your last chance to see either the movie or the band. Tickets to see your favorite band cost $30, and on any given day, you would be willing to pay as much as $50 for a ticket. Based on this information, what is your opportunity cost of going to see the Star Wars movie on Friday?

Whether studying the output of the U.S. economy or how many classes a student will take, a unifying concept is that:

You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your economic surplus from working as a math tutor instead of going to the movies?

The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHz Total Benefit Marginal Benefit Total Cost Marginal Costs 2.0 \ 1,000 \ 900 2.5 \ 1,400 \ 100 3.0 \ 300 \ 1,200 3.5 \ 1,900 \ 1,500 4.0 \ 2,000 \ 400   The total cost of a 2.5GHz computer is:

Forest lives in complete isolation in Montana. He is self-sufficient and feeds himself through hunting, fishing, and farming. Which of the following statements about Forest is true?

Dividing the total cost of undertaking n units of an activity by n reveals the:

Microeconomics differs from macroeconomics in that microeconomics focuses on:

The last time gas prices increased drastically, sales of large Sport Utility Vehicles (SUVs)fell. Why?

Alex received a four-year scholarship to State U. that covered tuition and fees, room and board, and books and supplies. If Alex becomes a full-time student, then:

The Scarcity Principle applies to:

Refer to the accompanying table below. According to the Cost-Benefit Principle, how many units of this activity should be carried out? Units of Activity Tatal Cast Tatal Benefit 0 \ 0 \ 0 1 \ 30 \ 100 2 \ 40 \ 160 3 \ 60 \ 190 4 \ 100 \ 210 5 \1 50 \ 220 6 \2 10 \ 225  

The fact that most people make some decisions based on intuition rather than calculation is: