Exam 1: What Is Economics

The fact that some people can afford to live in beautiful homes while others are homeless, is most directly an example of an economy facing the ________ part of one of the two big economic questions.

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

When the government chooses to spend the tax dollars that it collects on homeland security, its choice

-The above figure depicts a

-The above figure shows the relationship between the Joneses' total consumption and total household income. The figure illustrates that the Joneses' total consumption varies

-The slope of the line shown in the above figure is

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the ________ part of one of the two big economic questions.

The above figure reveals

Marginal cost is the

Along a curved line, the slope at the maximum

-In the above figure, the curve has a slope that is ________.

Why do economists use graphs?

Differences in income are most directly related to which of the following economic question?

-In the above figure, which curve shows a negative relationship between x and y?

-The slope of the line shown in the above figure is

-In the above figure, using the slope across an arc, the slope of the curve between points a and b is

What is the difference between scarcity and poverty?

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

In a graph, a line has a negative slope if

The term used to emphasize that making choices in the face of scarcity involves a cost is