Exam 1: Economics: Foundations and Models

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

Which of the following is part of an economic model?

Dr.Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health care services.How can Dr.Goldfinger strive to achieve this productive 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 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?

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests.Suppose your classmate,Heidi purchased two tickets for $40 each.Is this transaction economically efficient?

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?

Trade-offs force society to make choices when answering what three fundamental questions?

Which of the following is a normative economic statement?

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 revenue received from the sale of the last 500 cigars?

Policies based on normative economic ideas tend to increase economic efficiency and improve equity.

Productive efficiency is achieved when firms produce goods and services