Exam 1: Economics: Foundations and Models

Which of the following is a normative economic statement?

The cost incurred from the production of an additional unit of a product

Which of the following generates allocative efficiency in a market economy?

How can the influence of a third variable be shown on a two-dimensional graph?

Competition among sellers generates

The decisions General Motors makes in determining production levels for its Chevy Volt is an example of a microeconomics topic.

Suppose the U.S.government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus.These teachers would be exemplifying the economic idea that

Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

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

The U.S.Health Resources and Services Administration (HRSA)forecasts that in 2020

Table 1-2 Julius runs a small tailor shop in the city of Bloomfield.He is debating whether he should extend his hours of operation.Julius figures that his sales revenue will depend on the number of hours the tailor shop is open as shown in the table above.He would have to hire a worker for those hours at a wage rate of $18 per hour. -Refer to Table 1-2.What is Julius's marginal cost if he decides to stay open for three hours instead of two hours?

Which of the following is a positive economic statement?

Consider the following statements: a.Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. B.Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. C.Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

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

Economic models

Define macroeconomics.

Which of the following is an example of an activity undertaken by an entrepreneur?

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 benefit if he sells the standard package?

What is a household? How do households interact with firms in a market?

Explain the term "economics."