Exam 1: Economics: Foundations and Models

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

Fast food restaurants produce a range of menu items such as hamburgers,chicken sandwiches,salads,and french fries.What fundamental economic question are they addressing by offering this range of items?

The U.S.Bureau of Labor Statistics forecasts that by 2024,total employment in U.S.________ will decline to 11.4 million.

What is an economic market?

The basic economic problem of scarcity

An "omitted variable" is

"The distribution of income should be determined by the government" is an example of a normative economic statement.

When voluntary exchange takes place,neither party usually gains from the exchange.

Which of the following is motivated by an efficiency concern?

The decision about what goods and services will be produced in a centrally planned economy is made by

Which of the following is a positive economic statement?

"The unemployment rate is too high" is an example of a positive economic statement.

Which of the following statements is true?

Which of the following is a microeconomic question?

Scenario 1-1 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week.A manager at the plant observes,"Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800,we are still making an overall profit of $10,000 per week so I think we're on the right track.We are producing the optimal number of t-shirts." -Refer to Scenario 1-1.Had the firm not produced and sold the last 400 t-shirts,would its profit be higher or lower,and if so by how much?

It is necessary for all economic systems to provide people with goods and services and also restrict them from getting as much of these goods and services as they wish,because failure to do this could ________ the efficiency of the system by producing some goods and services that are ________.

How does the study of microeconomics differ from that of macroeconomics? Give one example each of an issue studied in microeconomics and in macroeconomics.

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 1-1 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 1-1.What is Eva's marginal cost if she decides to stay open for two hours instead of one hour?

Describe what has happened to state obesity rates in the United States since 1994.