Test 1 MicroEco

An aggregated demand curve is created by summing the ________________ on the individual demand _______________.

quantity demanded at each price; curves

An experiment would be conducted to determine _______________ among the chosen variables. Subjects should be assigned ________________ to either a test or control group in order to get the most unbiased comparison.

causation; randomly

Suppose 1 comma 743 people bought popsicles on a hot summer day. If the average number of popsicles that each person bought is 4​, the number of popsicles sold that day is _________.

6972

Which of the following is not one of the three key principles of​ economics? A. Equilibrium. B. Empiricism. C. Optimization. D. Resource allocation.

D. Resource allocation.

Economists conduct research on the​ "effects of global warming on the​ economy". This means they study the effects of global warming on the national​ income, international trade etc. It is considered a _____________ study.

macroeconomics

An economist makes an assumption that each additional year of education causes future wages to rise by 7 percent. In this​ model, if a person with 12 years of education makes ​$25 comma 000 per​ year, then a person with 4​-year college degree would earn ​$ _________ per year.​ (Round your intermediate calculations to two decimal​ places.)

32750

The Lancet​, a leading medical​ journal, published a paper on a possible link between autism in children and the​ measles, mumps, rubella​ (MMR) vaccine. Following​ this, the number of MMR vaccinations fell and the incidence of mumps increased. Examine each of the following statements carefully. Which of these​ statements, if​ true, would help you conclude that there is indeed a​ cause-and-effect relationship between the vaccine and autism in​ children? A. The MMR vaccine contains​ thimerosal, a preservative that is known to increase the risk of autism. B. The study included a large number of children who had been immunized against MMR and showed signs of autism. C. The survey was conducted on a large group whose members were randomly selected. D. Other studies on the same issue suggest that the results are inconclusive.

A and C

Which of the following questions is not an example of an issue a researcher could study to contribute to the welfare of​ society? A. What will be the side effects of watching television on a​ child? B. What will be the turnout of the next Woody Allen film in​ theaters? C. What is the average unemployment age group in a​ country? D. What combination of colors can one use to paint his bedroom​ wall?

A. D. What combination of colors can one use to paint his bedroom​ wall?

How does microeconomics differ from​ macroeconomics? A. Macroeconomics is the study of how​ individuals, households,​ firms, and governments make​ choices, while microeconomics is the study of the economy as a whole. B. Microeconomics is the study of how individuals and firms make​ choices, while macroeconomics is the study of all state and local government policies. C. Macroeconomics is the study of how individuals and firms make​ choices, while microeconomics is the study of all state and local government policies. D. Microeconomics is the study of how​ individuals, households,​ firms, and governments make​ choices, while macroeconomics is the study of the economy as a whole.

D. Microeconomics is the study of how​ individuals, households,​ firms, and governments make​ choices, while macroeconomics is the study of the economy as a whole.

Identify which of the following is a natural experiment. A. Mobile service providers study whether their lower call rates lead to an increased demand. B. An entrepreneur studies the work efficiency of those who are promoted and those who are not. C. An economist studies whether higher income levels lead to greater expenditure on luxury goods. D. Suppose the public schools in Minnesota make swimming lessons a mandatory course starting in 2012. A researcher studies its impact on physical stamina by selecting students admitted in school before and after 2012.

D. Suppose the public schools in Minnesota make swimming lessons a mandatory course starting in 2012. A researcher studies its impact on physical stamina by selecting students admitted in school before and after 2012.

Q1 Complete the marginal benefit column starting with the step from 0​ gallons/week to 1​ gallon/week. Gallons/Week: 0, 1, 2, 3, 4, 5, 6, 7, 8 Total Benefit​ (dollar equivalent): 0, 4, 8, 11, 14, 16, 18, 19, 19 Marginal Benefit: --, __, __, __, __, __, __, __, __ The price of gasoline is​ $2.40/gallon. Q2 Given this​ information, using the Principle of Optimization at the​ Margin, the optimal number of gallons of gas to consume each week will be ______. Some policy makers have suggested taxing gasoline to reduce global warming​ (Burning fossil fuels such as gasoline releases greenhouses​ gases, which are a cause of global​ warming). Suppose the price of​ gasoline, including a gasoline​ tax, rises to​ $3.60/gallon. Q3 Given this​ information, using the Principle of Optimization at the​ Margin, the optimal number of gallons of gas to consume each week will be ______.

Q1 4, 4, 3, 3, 2, 2, 1, 0 Q2 4 Q3 2

Scott loves to go to baseball​ games, especially home games of the Cincinnatti Reds. All else​ equal, he likes to sit close to the field. He also likes to get to the stadium early to watch batting practice. The closer he parks to the stadium the more batting practice he is able to watch​ (the garages all open​ simultaneously). Find​ Scott's optimal seat type and parking garage using the information that follows. Location/Seat: Diamond Seats, Club Home, Club Seating, Scout Box, Scout Price: $229, $89, $79, $73, $63 Scott's Value of View: $133, $128, $123, $120, $100 Parking Location: Westin parking garage, Fountain Square South Garage, West river parking, East river parking, Under stadium parking Parking Fee: $5, $10, $17, $24, $34 Arrival Time: 6:20 PM, 5:50 PM, 5:25 PM, 5:10 PM, 5:00 PM Missed Batting Practice: 60 min, 50 min, 25 min, 10 min, 0 min Benefit of Arrival Time: $0, $10, $35, $50, $65 Scott's optimal seat type is ______________. ​Scott's optimal parking is _______________.

Scout Box; Under stadium parking

Suppose you have a​ part-time job and earn​ $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost​ $50 each and shoes cost​ $100 each. Budget: $400, $400, $400, $400, $400 Pairs of Shoes Purchased: 4, 3, 2, 1, 0 Pairs of Jeans Purchased: 0, 2, 4, 6, 8 The table above shows that for a given budget if you increase the amount of one type of good that you​ buy, you must _____________ the amount of the other good that you buy.​ Therefore, a budget constraint implies that the consumer faces _____________.

decrease; trade-offs

When John determines what choice of walking shoes will give him the best bang for his buck​, he is using optimization based on _____________. When Janet looks at the additional value of purchasing a new laptop to the cost as compared to keeping her old​ one, she is using optimization based on _______________.

total value; marginal analysis

You are trying to decide how to spend ​$40 you earned last night. You could buy a new shirt or go out to dinner and a movie with a friend. You could also go to the​ movie, not have​ popcorn, and buy a less expensive shirt. Taken together these things form your _______________.

budget constraint

You decide to run an experiment. You invite 20 friends to a party. You randomly select 10 friends and tell them that there will be free​ food: most of them show up to your party. For the other 10 friends you do not mention the free​ food: none of these friends show up. Based on the correlation in your data and also assuming that the correlation is not​ spurious, you conclude that free food causes people to come to parties. Given this​ information, it can be concluded that ___________________________.

correlation implies causation

The following data gives the respective salaries of the two top​ managers, two middle​ managers, and two​ first-line managers at a particular​ firm: ​$200 comma 000​, ​$190 comma 000​, ​$75 comma 000​, ​$60 comma 000​, ​$45 comma 000​, ​$40 comma 000. We can conclude that the mean is __________________ the median.​ Thus, the mean salary of all of the managers ___________________ by the salary of the top managers.

greater than; is impacted

Which of the following is not an item studied under microeconomics​? A. Aggregate issues. B. Firm profits. C. Individual preferences. D. Cigarette taxes.

A. Aggregate issues.

Suppose the market price of corn is​ $5.50 per bushel. Which of the following is not one of the three conditions that will need to be satisfied for the corn market to be in equilibrium at this​ price? A. Both the buyers and sellers of corn could benefit by making small changes to their market behaviors. B. The buyers of corn will only use it for activities that they feel are worth at least​ $5.50 per bushel. C. The quantity of corn produced by corn farmers will equal the quantity purchased by buyers. D. The cost to corn farmers of growing the corn must be less than​ $5.50 per bushel.

A. Both the buyers and sellers of corn could benefit by making small changes to their market behaviors.

Which of the following statements regarding economic questions is not​ correct? A. The questions must have implication on​ individuals' choices and their budget. B. The questions should be associated with some economic research. C. The questions should be such that they can be answered with past data. D. The questions should contribute to the welfare of society.

A. The questions must have implication on​ individuals' choices and their budget.

All of the following would cause a shift in the supply curve for orange​ juice, except A. a new medical discovery about the benefits of citrus. B. a freeze over all of Florida for three nights in a row. C. tax credits for citrus farmers. D. new machinery that speeds up the picking process.

A. a new medical discovery about the benefits of citrus.

Which of the following statements is true in the case of an anecdotal​ argument? A. It never has a counter example. B. It is appropriate when contradicting a blanket statement. C. It can lead to skeptical and misleading conclusions. D. It helps in judging a statistical relationship.

B and C

Which of the following can be categorized as an anecdotal​ argument? A. A random sample of​ 80% of the middle class in a particular town concludes a positive relationship between income and expenditure among the middle class of that particular town. B. Alfred received a promotion when he became the father of a baby girl. Marshall lost his job when he became the father of a baby boy.​ Therefore, the conclusion is drawn that the gender of a newborn child is related to the​ fathers' job status. C. A researcher studies all of the students at New York University to find out current fashion trends among the freshman class of that university. D. John and​ Tina, the brightest students in the​ class, are very poor.​ Therefore, the conclusion is drawn that every bright student is poor.

B and D

Microeconomics is concerned​ with: A. Shifts in aggregate demand due to changes in price. B. Placing a greater emphasis on empirical data. C. Externalities arising from production and consumption. D. Reasons for unemployment.

C. Externalities arising from production and consumption.

Which of the following is not a correct explanation of​ economics? A. It studies the effects of any individual​ agent's choices on society. B. It helps in evaluating the costs and benefits of alternative actions. C. It is concerned only with money and financial aspects of human behavior. D. It is concerned with every type of human behavior.

C. It is concerned only with money and financial aspects of human behavior.

An experiment is to be conducted to find out whether participating in yoga leads to improved health. There are two yoga classes in a​ town, Neo Yoga Center and Union Yoga Center. Which of the following samples best describes​ randomization? A. Selecting healthy students from both of the centers and zero people who are not participating in yoga. B. Selecting less students from both of the centers than people who are not participating in yoga. C. Selecting students from both of the centers and an equal number of people who are not participating in yoga using the lottery method. D. Selecting more students from the Neo Yoga Center than the Union Yoga Center.

C. Selecting students from both of the centers and an equal number of people who are not participating in yoga using the lottery method.

How is the mean calculated from a series of​ observations? A. It is calculated as the difference of all the different items divided by the number of items. B. It is calculated as the product of all the different items divided by the number of items. C. The mean is the sum values of the observations divided by the number of observations. D. The mean is the median value of a set of observations.

C. The mean is the sum values of the observations divided by the number of observations.

Which of the following is not one of the four major factors that shifts the supply curve when it​ changes? A. The scale of sellers. B. Sellers' beliefs about the future. C. Prices of inputs used in production. D. The income of consumers. When one of the four major factors​ changes, causing an increase in​ supply, the supply curve shifts _______________.

D. The income of consumers.; rightward

Give an example of a pair of variables that have negative correlation. A. The number of physicists and the speed of sound. B. The quantity of fertilizers used and crop yield. C. The color of a​ person's shirt and the number of meals sold at Chinese restaurants. D. The number of winter coats sold and the temperature outside.

D. The number of winter coats sold and the temperature outside.

When economists test their theories using​ evidence-based analysis, they are most likely using​ __________. A. equity analysis through the use of models. B. optimization through observation. C. opportunity-cost analysis. D. empiricism through the use of data.

D. empiricism through the use of data.

Optimization is the process that describes​ A. the budgeting process for people. B. the production of resources. C. how to maximize wealth. D. the choices that governments make. E. how to obtain relevant data.

D. the choices that governments make.

Which of the following would not be considered one of the possible opportunity costs of a recent high school graduate starting their career right away by getting a full minus time job. A. Starting college right away. B. Going to Haiti to do missionary work.. C. Spending a year backpacking across Europe. D. None of these would be considered an opportunity cost. E. All of these is a possible opportunity cost.

E. All of these is a possible opportunity cost.

Economists study ___________; ​therefore, the unifying feature of economics is a focus on ___________.

all human behavior; choice

Economists refer to the process of summing the individual supply curves to find the market supply curve as aggregation. Q1 Aggregation consists of fixing the _______________ and adding up the ______________ by each firm. Pizza​ Hut's Supply Schedule Price ($/pizza): $1, $2, $3, $4, $5 Quantity Supplied (pizzas): 150, 200, 250, 300, 350 Domino's Pizza's Supply Schedule Price ($/pizza): $1, $2, $3, $4, $5 Quantity Supplied (pizzas): 300, 400, 500, 600, 700 Q2 Given the supply schedules above for Pizza Hut and​ Domino's Pizza, complete the total supply schedule for these two firms. Total Supply Schedule Price ($/pizza): $1, $2, $3, $4, $5 Quantity Supplied (pizzas): __, __, __, __, __

Q1 price of the good; quantity supplied Q2 450, 600, 750, 900, 1050

A study was conducted examining diabetes rates by ethnicity. It was determined that Hispanics had the highest rate of diabetes. A conclusion might be made that people of Hispanic origin are the most inclined to be diabetic.​ However, that ______________ correlation could be the result of _______________ , given that other​ factors, such as​ diet, that were not considered.

positive; omitted variables

The market supply curve is the _____________ of all the supply curves of potential producers and would be graphed to the ___________ of the individual curves.

sum; right

Some people choose to live close to the city​ center; others choose to live away from the city center and take a longer commute to work every day. Does this mean that those who stay away from the city center are being​ irrational? A. Yes, because people face direct and indirect commuting costs. B. Yes, because people have different preferences. C. No, because people face the same living costs in and away from the city. D. Yes, because their direct commuting costs must be higher. E. No, because their opportunity cost of commuting must be lower.

​E. No, because their opportunity cost of commuting must be lower.

In response to a​ region-wide power outage cause by a​ hurricane, a retailer increases the price of generator from ​$350 to ​$2 comma 900. The most likely purchaser would be A. the first person in​ line, who has ​$300 of worth of refrigerated food to save. B. a restaurant​ owner, who has ​$3 comma 500 worth of refrigerated food to save. C. a wealthy​ individual, who has ​$700 worth of refrigerated food to save. D. no​ one, as consumers would boycott such price gouging.

B. a restaurant​ owner, who has ​$3 comma 500 worth of refrigerated food to save.

Suppose there are three activities in which you could​ participate: 1. The opportunity cost of the first activity is missing 3 hours of work. 2. The opportunity cost of the second activity is missing a concert that you have tickets to. 3. The opportunity cost of the third activity is missing the afternoon nap that you take every day. Given this​ information, for which of these activities would you be able to compare opportunity​ costs? A. You can compare all the activities after you translate all the missed activities into dollar amounts. B. You can only compare activities 1 and​ 3, since they both relate to an amount of time that is lost. C. You can only compare activities 1 and​ 2, since they can both be easily stated in terms of dollars forgone. D. You cannot compare any of these opportunity​ costs, since they each are measured in different units.

A. You can compare all the activities after you translate all the missed activities into dollar amounts.

Comparing a set of feasible alternatives and picking the best one is an optimization process called​ _________. A. cost-benefit analysis. B. normative analysis. C. likelihood estimation. D. statistical inference.

A. cost-benefit analysis.

Economics is all about making choices. The reason we have to choose one thing over another​ is: A. economic resources are scarce. B. economic agents are scarce. C. economic wants are limited. D. economic choices are unlimited.

A. economic resources are scarce.

A competitive market will A. move towards equilibrium quantity because both producers and consumers act in their own best interest. B. create excess demand because wants exceed needs. C. move towards equilibrium because producers set the prices. D. create excess supply because producers want profits.

A. move towards equilibrium quantity because both producers and consumers act in their own best interest.

The competitive equilibrium price equates A. quantity supplied to quantity demanded. B. price to quantity demanded. C. supply to demand. D. price to quantity supplied.

A. quantity supplied to quantity demanded.

The concept of diminishing marginal benefits states that A. the more you consume of a​ good, your willingness to pay for an additional unit declines. B. the more you consume of a​ good, the less benefit you receive. C. the more you pay for a​ good, the greater the benefit you receive. D. the more you pay for a​ good, the less benefit you receive.

A. the more you consume of a​ good, your willingness to pay for an additional unit declines.

The concept of opportunity cost is a measure of​ _________. A. the value of the best alternative use of a resource. B. all the possible alternative uses of a resource. C. the dollar amount you must pay to do any activity. D. the benefit that you receive from doing any activity.

A. the value of the best alternative use of a resource.

Which of the following areas are addressed in the study of​ economics? A. Inflation rates. B. Financial markets. C. The benefits associated with a decision. D. Optimal tax policies.

All

There is a proverb​ "anything worth doing is worth doing​ well." Do you think an economist would agree with this​ proverb? A. Yes, because the marginal cost of extra effort is typically increasing as effort increases. B. No, because the marginal cost of extra effort may be greater than the marginal benefit. C. No​, because the total net benefit of extra effort is negative by definition. D. Yes, because doing something to the best of your ability is optimizing behavior. E. No, because doing something well has no next best alternatives with which to compare.

B. No, because the marginal cost of extra effort may be greater than the marginal benefit.

Which of the following is least likely to be a question or study of economic​ concern? A. What are the benefits to Tampa Bay of hosting the Super​ Bowl? B. What is the motivation of the Red​ Cross? C. Is anything really​ free? D. How connected is productivity and​ wage?

B. What is the motivation of the Red​ Cross?

Holding all else​ equal, if the price of a digital camera​ rises, then we can expect A. a decrease in the demand for digital cameras. B. a decrease in the quantity demanded of digital cameras. C. an increase in the demand for digital cameras. D. an increase in the quantity demanded of digital cameras.

B. a decrease in the quantity demanded of digital cameras.

Suppose you have been hired as a management consultant by a major oil company to help it optimally price gasoline at its service stations. Your client would like your team to perform a study on​ customers' gasoline purchasing habits when they notice price increases. You suggest that the team​ _____________. A. develop a model that allows for scenario analysis. B. design and execute an experiment. C. utilize artificial intelligence to model human behavior. D. collect competitor data.

B. design and execute an experiment.

Suppose you had information on the sales of similar homes just east and just west of the boundary between two school districts. Also suppose schools on one side of the school boundary are better than the schools on the other side in terms of test scores. You could estimate the average value that parents place on a​ one-point increase in test scores by​ ___________. A. multiplying the price of a home in either district by the difference in test scores between districts. B. dividing the difference in the prices of similar homes between districts by the difference in test scores between districts. C. dividing the difference in the prices of big homes in one district and small homes in the other district by the difference in test scores between districts. D. dividing the difference in the prices of similar homes between districts by the average test score for both districts combined. E. dividing the difference in the prices of big and small homes in a district by the average test score in that district.

B. dividing the difference in the prices of similar homes between districts by the difference in test scores between districts.

If sparkling wine producers expect nbsp the price of wine to decrease in the future​, then the supply curve for sparkling wine would​ _________________. A. decrease (shift left). B. increase (shift right). C. remain unchanged.

B. increase (shift right).

If opportunity cost were to suddenly​ increase, total cost would A. decrease and net benefit would increase. B. increase and net benefit would decrease. C. decrease and net benefit would decrease. D. increase and net benefit would increase.

B. increase and net benefit would decrease.

All of the following are examples of empiricism​ except: A. determining causation. B. predicting human behavior. C. analyzing theories about optimization. D. analyzing theories about equilibrium.

B. predicting human behavior.

Optimization in levels examines​ ___________, while optimization in differences analyzes​ ____________. A. marginal benefits of​ alternatives; the change in marginal benefits. B. total net benefits of​ alternatives; the change in net benefits. C. total benefits of​ alternatives; total costs of alternatives. D. total net benefits of feasible​ alternatives; total net benefits of infeasible alternatives. E. total benefits of​ alternatives; net benefits of alternatives.

B. total net benefits of​ alternatives; the change in net benefits.

If the government sets a minimum wage for seasonal workers​, then the supply curve for sparkling wine would​ ___________________. A. remain unchanged. B. increase (shift right). C. decrease (shift left).

C. decrease (shift left).

A budget constraint represents​ _________. A. the total amount of income a family earns from all sources. B. the maximum amount of spending the federal government is allowed to do by law. C. the bundles of goods or activities that a consumer can choose given her limited budget. D. any actions taken by government officials to limit the amount of government spending.

C. the bundles of goods or activities that a consumer can choose given her limited budget.

One reason​ free-riders exist could be​ that: A. the social cost ensures a​ strong, enforceable penalty. B. the social cost exceeds the private benefit. C. the private benefit exceeds the private cost. D. people often act in the best interest of others.

C. the private benefit exceeds the private cost.

All of the following would fall under the study of microeconomics​ except: A. a factory polluting a lake used for fishing. B. an international trade dispute. C. the stock​ market's response to an interest rate increase. D. a labor union strike.

C. the stock​ market's response to an interest rate increase.

Suppose you have just been hired as a management consultant by a major oil company to help it optimally price gasoline at its service stations. Q1 In your first presentation to​ management, how would you describe your planned methodology to perform the​ analysis? A. Scientific method. B. Management consulting method. C. Economic method. D. Price discrimination method. Q2 What tool would you employ to analyze the relationship between gasoline prices and consumer​ behavior? A. Refining models. B. Accounting models. C. Fashion models. D. Economic models. Q3 You should collect ________________ amount of data to create _________________ to test the ________________ indicated by the economic model.

Q1 A. Scientific method. Q2 D. Economic models. Q3 a large; empirical evidence; hypotheses

Economics is divided into two broad fields of​ study: microeconomics and macroeconomics. Q1 Microeconomics studies​ _________, while macroeconomics studies​ _________. A. economy-wide phenomena; decisions made by the government. B. a small piece of the overall​ economy; the economy as a whole. C. issues relating to​ businesses; choices made by individuals and consumers. D. money; policy. Q2 Policy decisions made by the government are analyzed by​ _________. A. both microeconomics and macroeconomics. B. only macroeconomics. C. neither microeconomics nor macroeconomics. D. only microeconomics. Q3 A policy such as taxes on cigarettes would be studied under ___________​, since it deals with ___________.

Q1 B. a small piece of the overall​ economy; the economy as a whole. Q2 A. both microeconomics and macroeconomics. Q3 microeconomics; a small part of the overall economy

Q1 How does a natural experiment differ from a randomized​ one? A. A natural experiment generates​ variation, while a randomized experiment uses existing variation. B. Natural experiments are not influenced by omitted​ variables; randomized experiments contain omitted variables. C. A natural experiment uses existing​ variation, while a randomized experiment generates variation. D. A natural experiment is​ expensive, while a randomized experiment is cheap. Q2 Which type of experiment is likely to yield more accurate​ results? A. Randomized, because a natural experiment may not be completely randomized. B. Natural, because there could be reverse causality. C. Natural, because there could be an omitted variable. D. Randomized, because a natural experiment may be completely influenced by chance. Q3 Suppose you had to find the effect of seatbelt rules on road accident fatalities. Would you choose to run a randomized experiment or would it make sense to use natural experiments​ here? Explain. A. Randomized, because natural experiments with seatbelt rules may exist. B. Randomized, because seatbelt rules may be influenced by road accident fatalities. C. Natural, because seatbelt rules may increase road accident fatalities. D. Natural, because seatbelt rules may be unrelated to road accident fatalities.

Q1 C. A natural experiment uses existing​ variation, while a randomized experiment generates variation. Q2 Randomized, because a natural experiment may not be completely randomized. Q3 B. Randomized, because seatbelt rules may be influenced by road accident fatalities.

Suppose that you allocate​ $20 each week for your entertainment budget. This money is spent on two​ items: either renting movies for​ $1 each at Redbox or downloading songs from iTunes at​ $1 each. Q1 Given this​ information, which of the following would represent your budget constraint for​ entertainment? A. Amount spent on iTunes minus Amount spent at Redbox​ = $20. B. Amount spent on iTunes​ + Amount spent at Redbox​ = $1. C. Amount spent on iTunes​ + Amount spent at Redbox​ = $20. D. Amount spent on iTunes minus Amount spent at Redbox minus ​$1 =​ $20. Q2 Your budget constraint for entertainment illustrates the concept of ______________________, since as you increase your purchases of one​ item, you _______________________.

Q1 C. Amount spent on iTunes​ + Amount spent at Redbox​ = $20. Q2 trade-offs; must decrease your purchases of the other item

Q1 Which of the following would be considered a scarce resource for​ producers? A. Machinery. B. High minus skill labor. C. Land. D. All of the above. Q2 Since the inputs used to produce goods are​ scarce, the total amount produced of most goods is __________ the amount that consumers would like to buy. To allocate the goods produced to the people who value them the​ most, we use ____________.

Q1 D. All of the above. Q2 below; the price mechanism

Suppose the random sample of 500 people is drawn to conduct an experiment to find out whether participating in yoga leads to improved health. The group of people from the Neo Yoga Center and the Union Yoga Center constitutes __________________. The group of people not participating in yoga constitutes _________________.

a treatment group; a control group

You are thinking about buying a house. You find one you like that costs ​$150 comma 000. You learn that your bank will give you a mortgage for ​$120 comma 000 and that you would have to use all of your savings to make the down payment of ​$30 comma 000. You calculate that the mortgage​ payments, property​ taxes, insurance,​ maintenance, and utilities would total ​$nbsp 720 per month. Q1 Which of the following is true regarding your calculation of the cost of owning the​ house? A. It should include your monthly​ income, since you must know the source of the money when trying to calculate costs. B. It should not include​ maintenance, since homeowners often use their own time to fix things around the house instead of calling a professional. C. It should not include property​ taxes, since that is money that goes directly to the government and is no longer in the market. D. It should include the opportunity cost of the money used to make the down payment. This money could be earning interest in a bank. Q2 Given the information​ above, if the interest rate on your savings account was 2 percent a​ year, then the yearly opportunity cost of using this money for a down payment would be equal to ​$ _______.

Q1 D. It should include the opportunity cost of the money used to make the down payment. This money could be earning interest in a bank. Q2 600

Q1 Which of the following could be considered an economic​ agent? ​ A. Senators. B. Consumers. C. Criminals. D. Parents. Q2 Scarcity is the situation of having ___________ wants in a world of ____________ resources. Q3 Which of the following are considered scarce​ resources? A. Mechanical pencils. B. Time. C. Diamonds. D. Oil.

Q1 all Q2 unlimited; limited Q3 all

You are taking two courses this​ semester, biology and chemistry. You have quizzes coming up in both classes. The table below shows your grade on each quiz for different numbers of hours studying for each quiz. For​ instance, the second row implies that one hour of studying for Chemistry will generate an expected grade of 72 on​ Chemistry, whereas one hour of studying for Biology will generate an expected grade of 72 on Biology. Hours of Study: 0, 1, 2, 3 Chemistry: 65, 72, 77, 80 Biology: 66, 72, 76, 78 Your goal is to maximize your average grade on the two quizzes. Use the idea of optimization in differences to decide how much time you would spend studying for each quiz if you had a total of​ 1, 2, or 3 hours to prepare for each exam. Q1 If you had 1​ hour, you should study _______________. Q2 If you had 2​ hours, then you should study __________ hour(s) for chemistry and _________ ​hour(s) for biology. Q3 If you had 3​ hours, then you should study _________ ​hour(s) for chemistry and __________ ​hour(s) for biology.

Q1 chemistry Q2 1; 1 Q3 2; 1

Q1 Given the supply and demand curves on the​ right, when the price of the good is​ $20, we say that the market is in ___________________. At this​ price, we know that the quantity supplied is ____________________ the quantity demanded. Q2 If the only change in the market was that the price increased to​ $30, then we know that the quantity supplied will be _____________ the quantity​ demanded, resulting in ____________​, which is also known as _______________. Q3 Suppose instead that the price of the good dropped below the competitive equilibrium price to a price of​ $15 per unit. If this were to​ occur, then the quantity supplied would be ____________ the quantity​ demanded, resulting in _____________ , which is also known as _____________.

Q1 competitive equilibrium; equal to Q2 greater than; an excess supply; a surplus Q3 less than; an excess demand; a shortage

Debbie, a member of your​ team, advocates finding random people and then breaking them up into two groups. Group A would be shown an increase in the price of gas before taking the survey. Group B would be told there was no increase in the price of gas before taking the survey.​ Troy, another member of your​ team, recommends finding two groups of people already sorted by whether or not they have recently noticed an increase in the price of gas. Q1 Debbie's method is a ______________ and​ Troy's method is a ________________. Q2 Group A is the ______________ and Group B is the _______________.

Q1 controlled experiment; natural experiment Q2 treatment group; control group

For a market to be in​ equilibrium, three conditions must hold. Fill in the blanks below to complete these conditions. Q1 The amount produced by sellers must be _____________ the amount purchased by buyers. Q2 The costs of making a product must be _____________ the final price at which the product sells. Q3 Buyers must place a value on the uses of the product that is _____________ the cost of buying the product.

Q1 equal to Q2 less than Q3 greater than

Suppose your firm has a marginal revenue given by the equation MR equals 10 minus Upper Q​, where Q is the quantity produced and sold. This means that the seventh unit of output brings in 10 minus 7 equals $ 3 of additional revenue. The marginal cost for your firm is given by the equation MC equals 2 plus Upper Q. This means that the seventh unit of output increases the marginal cost by 2 plus 7 equals $ 9. Q1 If the firm produces the seventh unit of​ output, marginal cost will be _________________ marginal revenue. Q2 In which of the following​ cases, will the profit of the firm be​ maximized? A. When the average cost of producing an additional unit equals the marginal revenue from that unit. B. When the marginal cost of producing an additional unit equals the marginal revenue from that unit. C. When the average cost of producing an additional unit is less than the marginal revenue from that unit. D. When the marginal cost of producing an additional unit is less than the marginal revenue from that unit. Q3 The​ profit-maximizing level of output is _______ units.

Q1 greater than Q2 B. When the marginal cost of producing an additional unit equals the marginal revenue from that unit. Q3 4

Q1 As a firm produces more of a​ good, the cost of producing each additional unit ______________. This implies that the marginal cost of producing a good _______________ as you make more of that good. Q2 The supply curve represents​ ___________. A. the minimum price sellers are willing to accept to sell an extra unit of a good. B. the minimum price buyers are willing to pay to buy an extra unit of a good. C. the maximum price sellers are willing to accept to sell an extra unit of a good. D. the maximum price buyers are willing to pay to buy an extra unit of a good.

Q1 increases; increases Q2 A. the minimum price sellers are willing to accept to sell an extra unit of a good.

The three principles of economics include​ optimization, equilibrium, and empiricism. Q1 Equilibrium describes a situation where ____________________________________. Q2 Empiricism describes a situation where ____________________________________. Q3 Optimization describes a situation where ___________________________________.

Q1 no one would benefit from changing his or her behavior. Q2 economists use data to analyze what is happening in the world. Q3 people weigh costs and benefits when making a decision.

Suppose that you are on a date with an economics​ major, and you want to impress them by talking about economics. Your date challenges you to state your knowledge of positive and normative questions. Q1 You say that positive questions ask ______________________ and normative questions ask ________________________. Q2 Which of the following examples do you provide as a normative​ question? A. How many people are on food​ stamps? B. What is the rate of change of disability​ enrollment? C. How much does welfare drive up the​ deficit? D. Should welfare be​ repealed? Q3 Which of the following do you provide as a positive​ question? A. Who is the most to blame for the national​ debt? B. Is passing on a high national debt to our children an immoral​ act? C. How much is the national​ debt? D. Will our high national debt lead to a breakdown of family​ values?

Q1 what is or what will be; what ought to be Q2 D. Should welfare be​ repealed? Q3 C. How much is the national​ debt?

When deciding whether to install visible countdown timers for pedestrians at​ crosswalks, which of the following would be considered in the​ cost-benefit analysis? A. The value of the​ pedestrians' lives saved by having the timers to assist in crossing the street. B. The value of the lives lost by drivers who watch the countdown timers and try to make it through a light. C. The higher maintenance bill associated with fixing these more complex signals when they break down. D. The cost in terms of dollars of installing these new timers all over the city.

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