Exam 1: Economics: Foundations and Models

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

As recently as 2000,________ percent of doctors were in private practice and by 2013,________ percent of doctors were in private practice.

What is the difference between physical capital and human capital?

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?

Which of the following contributed to the downfall of the Soviet Union in 1991?

Which of the following is a positive economic statement?

The relationship between sales and revenue is

In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.

Fiona shares an office with her ex-husband.Her share of the rent and utilities are $625 per month.She is considering moving to a home office which she will not have to share with anyone.The home office will not cost her anything as far as extra rent or utilities.Recently,you ran into Fiona at the gym and she tells you that she has moved into her home office.Fiona is as rational as any other person.As an economics major,you rightly conclude that

What is the "reverse causality" problem in determining cause and effect?

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?

A college must decide if it wants to offer more evening and weekend classes.This decision involves answering the economic question of "for whom to produce."

Voluntary exchange increases economic efficiency

________ occurs when economic benefits are distributed fairly.

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it,________ occurs.

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage: a.The minimum wage law causes unemployment. B.Unemployment would be lower without a minimum wage law. C.Minimum wage laws benefit some workers and harm others. D.The minimum wage should be more than $7.25 per hour. Which of the consequences above are positive statements and which are normative statements?

Holding all other personal characteristics-such as age,gender,and income-constant,economists would expect that

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 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 benefit if he decides to stay open for six hours instead of five hours?

Suppose when the price of hybrid automobiles rises,consumers buy fewer hybrid automobiles.This implies that

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