Question 1

In economics,the difference between a firm's revenues and its costs is referred to as

Accepted Answer

A) physical capital. 
B) profit. 
C) capital gains. 
D) factor payments. 
A) physical capital. 
B) profit. 
C) capital gains. 
D) factor payments.

Question 2

In economics,tangible merchandise is referred to as

Accepted Answer

A) invention. 
B) human capital. 
C) services. 
D) goods. 
A) invention. 
B) human capital. 
C) services. 
D) goods.

Question 3

Economists assume that

Accepted Answer

A) individuals behave in unpredictable ways. 
B) consumer behavior is explained by the existence of unlimited resources. 
C) people put other people's interests ahead of their own. 
D) optimal decisions are made at the margin. 
A) individuals behave in unpredictable ways. 
B) consumer behavior is explained by the existence of unlimited resources. 
C) people put other people's interests ahead of their own. 
D) optimal decisions are made at the margin.

Question 4

"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement.

Accepted Answer

A) True 
 B)False

Question 5

In a market economy,who decides what goods and services will be produced?

Accepted Answer

A) only the producers 
B) only consumers 
C) consumers and producers 
D) the government 
A) only the producers 
B) only consumers 
C) consumers and producers 
D) the government

Question 6

What is technology and what factors does it depend on?

Accepted Answer

Technology is the processes a firm uses

Question 7

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 is his marginal cost to complete the restoration?

Accepted Answer

A) $75 
B) $125 
C) $200 
D) $300 
A) $75 
B) $125 
C) $200 
D) $300

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

Table 1-3
   Ivan runs a custom jewelry shop in Sparkle City.He is debating whether he should extend his hours of operation.Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $25 per hour.
-Refer to Table 1-3.What is Ivan's marginal cost if he decides to stay open for six hours instead of five hours?

Accepted Answer

A) $10 
B) $20 
C) $25 
D) $91.67 
A) $10 
B) $20 
C) $25 
D) $91.67

Question 10

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.Using marginal analysis terminology,what is another economic term for the incremental cost of producing the last 400 t-shirts?

Accepted Answer

A) marginal cost 
B) operating cost 
C) explicit cost 
D) Any of the above terms are correct. 
A) marginal cost 
B) operating cost 
C) explicit cost 
D) Any of the above terms are correct.

Question 11

Opportunity cost is defined as

Accepted Answer

A) the benefit of an activity. 
B) the monetary expense associated with an activity. 
C) the highest valued alternative that must be given up to engage in an activity. 
D) the total value of all alternatives that must be given up to engage in an activity. 
A) the benefit of an activity. 
B) the monetary expense associated with an activity. 
C) the highest valued alternative that must be given up to engage in an activity. 
D) the total value of all alternatives that must be given up to engage in an activity.

Question 12

Which of the following are positive economic statements and which are normative economic statements?
a.An increase in the minimum wage causes unemployment.
b.The government should raise the minimum wage above $7.25 per hour.
c.The prolonged recession has caused the unemployment rate to reach a 30-year high.
d.Interest rates need to be lower for the economy to emerge from the recession.
e.Inflation has decreased since the onset of the recession.
f.Once the recession has ended,interest rates should increase to assure that inflation does not go up.

Accepted Answer

Statements a,c,and e are posit

Question 13

Which of the following is a problem inherent in centrally planned economies?

Accepted Answer

A) There are no problems and everyone,including consumers,is satisfied. 
B) There is too much production of low-cost,high-quality goods and services. 
C) Production managers are more concerned with satisfying government's orders than with satisfying consumer wants. 
D) Unemployment is too high. 
A) There are no problems and everyone,including consumers,is satisfied. 
B) There is too much production of low-cost,high-quality goods and services. 
C) Production managers are more concerned with satisfying government's orders than with satisfying consumer wants. 
D) Unemployment is too high.

Question 14

Table 1-4
  
-Refer to Table 1-4.The table above shows the sales of flat-panel television sets in Central America.Present the information using a bar graph.

Accepted Answer

The answer of Table 1-4
  
-Refer to Table 1-4.The...

Question 15

Cassie's Quilts alters,reconstructs,and restores heirloom quilts.Cassie has just spent $800 purchasing,cleaning,and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished.After having spent $800,Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task.Alternatively,she can sell the quilt "as is" now for $900.What is her marginal benefit if she sells the quilt "as is" now?

Accepted Answer

A) $100 
B) $900 
C) She makes a marginal loss of $600,not a marginal benefit. 
D) The marginal benefit cannot be determined. 
A) $100 
B) $900 
C) She makes a marginal loss of $600,not a marginal benefit. 
D) The marginal benefit cannot be determined.

Question 16

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

Accepted Answer

A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic 
A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic

Question 17

The government makes all economic decisions in a centrally planned economy.

Accepted Answer

A) True 
 B)False

Question 18

The relationship between sales and revenue is

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent.

Question 19

Lionel's Lawn Care is a company that maintains residential yards.Lionel's cost for his standard package of mowing,edging,and trimming is $15,and he charges $25 for this service.For a total price of $40,Lionel will also trim shrubs,a service that adds an additional $10 to the total cost of the standard package.What is Lionel's marginal cost of adding the shrub-trimming service to the standard package?

Accepted Answer

A) $10 
B) $15 
C) $25 
D) $40 
A) $10 
B) $15 
C) $25 
D) $40

Question 20

If the marginal cost of producing a television is constant at $200,then a firm should produce this item

Accepted Answer

A) only if the marginal benefit it receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit it receives is just equal to or greater than $200. 
C) as long as its marginal cost does not rise. 
D) until the marginal benefit it receives reaches zero. 
A) only if the marginal benefit it receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit it receives is just equal to or greater than $200. 
C) as long as its marginal cost does not rise. 
D) until the marginal benefit it receives reaches zero.

In economics,the difference between a firm's revenues and its costs is referred to as

In economics,tangible merchandise is referred to as

Economists assume that

"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement.

In a market economy,who decides what goods and services will be produced?

What is technology and what factors does it depend on?

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.

Opportunity cost is defined as

Which of the following is a problem inherent in centrally planned economies?

Table 1-4 -Refer to Table 1-4.The table above shows the sales of flat-panel television sets in Central America.Present the information using a bar graph.

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

The government makes all economic decisions in a centrally planned economy.

The relationship between sales and revenue is

If the marginal cost of producing a television is constant at $200,then a firm should produce this item

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 1: Economics: Foundations and Models

In economics,the difference between a firm's revenues and its costs is referred to as

In economics,tangible merchandise is referred to as

Economists assume that

"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement.

In a market economy,who decides what goods and services will be produced?

What is technology and what factors does it depend on?

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.

Opportunity cost is defined as

Which of the following is a problem inherent in centrally planned economies?

Table 1-4 -Refer to Table 1-4.The table above shows the sales of flat-panel television sets in Central America.Present the information using a bar graph.

When Dr.Goldfinger decides on the companies in which he will invest,a ________ issue is being addressed.

The government makes all economic decisions in a centrally planned economy.

The relationship between sales and revenue is

If the marginal cost of producing a television is constant at $200,then a firm should produce this item

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters