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Exam 1: Economics: Foundations and Models

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Question 1

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Which of the following is a positive economic statement?

A) The standard of living in the United States should be higher.
B) If the price of iPhones falls, a larger quantity of iPhones will be purchased.
C) The government should revamp the health care system.
D) The U.S. government should not have bailed out U.S. auto manufacturers.

E) A) and B)
F) None of the above

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Question 2

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Which of the following are primarily macroeconomic topics and which are primarily microeconomic topics? a.gasoline prices b.unemployment c.inflation d.health care costs e.air pollution f.economic growth

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b, c, and f are prim...

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Question 3

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The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal benefit.

Which of the following is a positive economic statement?

Table 1-1 Lydia runs a small nail salon in the town of New Hope.She is debating whether she should extend her hours of operation.Lydia figures that her sales revenue will depend on the number of extra hours the nail salon is open as shown in the table above.She would have to hire a worker for those extra hours at a wage rate of $10 per hour. -Refer to Table 1-1.Using marginal analysis, by how many hours should Lydia extend her nail salon's hours of operations?

Which of the following is a normative economic statement?

What is an entrepreneur, and what decisions does an entrepreneur make in a market system?

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomic topic.

Trina's Tropical Fish Store sells goldfish for $2 each and angelfish for $10 each.What is the opportunity cost of buying a goldfish?

Scenario 1-1 Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week.A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, we are still making an overall profit of $5,000 per week so I think we're on the right track.We are producing the optimal number of cell phones." -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 3,000 cell phones?

"The distribution of income should be left to the market" is an example of a positive economic statement.

Households ________ factors of production and ________ goods and services.

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.A minimum wage law benefits some groups and hurts others. C.In some cities such as San Francisco and New York, it would be impossible for low-skilled workers to live comfortably in the city without minimum wage laws. D.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses. Which of the consequences above are positive statements and which are normative statements?

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

Macroeconomics is the study of

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

In 2015, Hooverville consumed 205,000 tons of sugar.In 2016, sugar consumption rose to 245,000 tons.Calculate the percentage change in sugar consumption.

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Table 1-4 -Refer to Table 1-4.The table above shows the sales of LED light bulbs in North America.Present the information using a bar graph.

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