Exam 1: Economics: Foundations and Models

Productive efficiency is achieved when

Figure 1-3 -Refer to Figure 1-3. Calculate the area of the trapezoid X.

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket.

Table 1-2 Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $16 per hour. -Consider the following statements: a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area. B. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards. C. Citrus growers produce more oranges when the selling price of oranges falls. Which of the above statements demonstrates that economic agents respond to incentives?

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

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

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

At a recent faculty meeting, Lorraine Waverly, president of Skywalker College, announced that enrollment is up by 12 percent over the previous semester. If enrollment the previous semester was 3,250 students, what is the student enrollment this semester?

Explain the term "economics."

The branch of economics which studies how households and firms make choices, interact in markets and how government attempts to influence their choices is called

Zane's Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. After having spent $125, Zane realizes that he will need to spend an additional $200 on materials to complete the restoration. Alternatively, he can sell the weather vane without restoring it for $200. What is his marginal cost to complete the restoration?

In 2010, Hooverville consumed 205,000 tons of sugar. In 2011, sugar consumption rose to 245,000 tons. Calculate the percentage change in sugar consumption.

Which of the following questions or statements regarding medical school is normative?

In the market for factors of production, households earn income by supplying factors of production to firms.

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

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps, then the difference of $300 is the marginal cost of producing the 5th lamp.

Table 1-4 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 1-4. What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour?

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

Table 1-4 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 1-4. Using marginal analysis, determine how many hours should Eva extend her bakery's hours of operations?