Exam 1: Economics: Foundations and Models

The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a gallon of milk?

Which of the following is a positive economic statement?

Mr. Peabody chooses to invest in companies that produce goods and services at the lowest possible cost. Mr. Peabody is investing in companies that are

What is voluntary exchange?

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

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

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

Which of the following is an example of an economic trade-off that a firm has to make?

If a graph has a line that shows the amount of outsourcing in the last ten years, it is known as

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Table 1-7 -Refer to Table 1-7. The table above shows the sales of DVD recorders in North America. Present the information using a bar graph.

Consumers and make all economic decisions in a mixed economy.

Microeconomics is the study of

Which of the following statements is false?

Suppose the U.S. government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000. These doctors would be exemplifying the economic idea that

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

What is meant by the statement that "optimal decisions are made at the margin"?

The distribution of income primarily determines which of the fundamental economic questions?

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

Consider the following economic agents: a. the government B. consumers C. producers Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy?