ECON ch. 1

You plan to go to school this summer. If you​ do, you​ won't be able to take your usual summer job that pays ​$12,000 for the summer. The cost of tuition is ​$2,000 and textbooks cost ​$300. You live with your​ family, which covers your living expenses of ​$1,100. What is your opportunity cost of going to school this​ summer?

$14,300

Your employer has asked you to start working overtime and has offered to pay​ $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual​ $15 per hour. In terms of​ dollars, what is the marginal benefit of working each hour of​ overtime?

$18.00

​Becky, an economics ​student, buys three cups of coffee a​ day, which costs her $6.00. She decides to buy one more cup each day and her expenditure on coffee increases to ​$8.00. The marginal cost to Becky of a cup of coffee is​ _______.

$2.00

The night before a midterm​ exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night​ before, you'd have scored 70 percent. What was the opportunity cost of your evening at the​ movies?

10 percent of your grade

You plan to travel in Europe this summer. If you​ do, you​ won't be able to take your usual summer job that pays ​$6,000 for the​ summer, and you​ won't be able to live at home for free. The cost of transportation is ​$2,000, visas cost ​$300300​, and living expenses are ​$2,000. What is the opportunity cost of your plan to travel in​ Europe?

10,300

​______ earns​ ______.

Bill Gates, profit

Who is Chairman of the Board of Governors of the Federal​ Reserve?

Janet yellen

A power generating plant is an example of the factor of production​ _______.

capital

What kind of economic system relies on private ownership of​ resources, direct incentives and decisions made via markets and the price​ mechanism?

capitalism

Making a choice at the margin means​ ________.

deciding to do a little bit more or a little bit less of an activity

What are the four goals of any economic​ system? (Order does not matter but spelling​ does! Separate them with a​ comma.)

efficiency, equity, stability, growth

Hire factors of production Organize factors of production to produce and sell goods and services

firms

​"Consultants replacing high school counselorsConsultants replacing high school counselors​" involves a​ ______ question. ​"Health dash care professionals and drug companies say Medicaid drug rebates should be available to everyone in needHealth-care professionals and drug companies say Medicaid drug rebates should be available to everyone in need​" involves a​ ______ question.

how, for whom

Scarcity​ - be it in​ time, talent, or money​ - forces all of us to make choices. But according to​ economists, those choices can be influenced. What do choices respond​ to?

incentives

Before starring as Tony Stark in Iron Man​, Robert Downey Jr. had played in 45 movies that had average​ first-weekend box office revenues of a bit less than​ $5 million. Iron Man grossed​ $102 million in its first weekend. The success of Iron Man​ ______ the opportunity cost of hiring Robert Downey Jr. Movie producers now have​ ______ incentive to hire Robert Downey Jr.

increase, more

Factors of production are

inputs used to produce goods and services

Which of the following best defines capital as a factor of​ production?

instruments, machines, and buildings used in production

A movie star is an example of the factor of production-----.

labor

Facilitate trade Enable​ buyers/sellers to get info and do business with each other

markets

---- is not a factor of production

money

Anything accepted as a means of payment Makes trading efficient

money

Several things are necessary to make a​ decentralized, market economy work efficiently.

money, markets, firms, property rights

Jobs alone are not the measure of economic​ well-being. If this were the​ case, then we could increase the​ well-being of an economy by giving highway workers spoons rather than backhoes and garment workers needles and thread instead of computerized sewing machines. What does provide the source of high living​ standards?

production of goods and services people value

Govern ownership​ & use of things people value Provide incentive to​ specialize/produce

property rights

The opportunity cost of any action is

the highest valued alternative given up

Every​ week, Bob skates for one hour​, and his grade on each econ test is 90 percent. Last​ week, after skating for one hour​, Bob considered skating for another hour. He decided to skate for another hour and cut his study time by one hour. But last​ week, his econ grade fell to 85 percent. Given that Bob spent a second hour skating​, what can you conclude about the marginal benefit and marginal cost of the first hour of skating​?

the marginal cost for the first hour of skating exceeded its marginal benefit

All economic questions arise because we____

want more than we can get.

Microsoft announces new operating system involves a ---- question

what

The what​, how​, and for whom questions in economics are questions about​ ______.

what goods and services do we​ produce, how do we use the factors of production to produce these​ goods, and who consumes the goods and services that are produced