Exam 1: Economics Foundations and Models

Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky, and therefore carry a higher cost than not retiring. By using all available information as they act to achieve their goals, these teachers are exemplifying the economic idea that

What is equity, and how does it differ from efficiency?

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each. What is the opportunity cost of buying a goldfish?

Which of the following statements is true about competition in a market?

Which of the following is a microeconomics question?

Optimal decisions are made at the point where marginal cost equals zero.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

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

When Mr. Peabody decides on the companies to which he will donate his time and money, a ________ issue is being addressed.

The branch of economics which studies the behaviour of entire economies is called

An economic model is a simplified version of reality used to analyse real-world economic situations.

If the marginal cost of keeping a doctor's office open one additional hour per day is $200, then the doctor should keep the office open for one extra hour

Which of the following statements is true?

Which of the following correctly describes the relationship between economic efficiency and economic equity?

Economists reason that the optimal decision is to continue any activity up to the point where the

A restaurant sells a large soft drink at a fixed price of $1.79. A term used by economists to describe the money received from the sale of an additional large soft drink is

What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement.

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

In a centrally planned economy, the households and firms decide how economic resources will be allocated.

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.