Chapter 1 Homework

The diagram to the right shows a hypothetical demand curve for apples. The slope of this curve is _________________.

-1.00

The diagram to the right is an example of - A time-series graph - A pie chart - A bar graph - An economic map

A time-series graph

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity​ (in 1,000s of units per unit of​ time). The area of the triangle shown on the diagram is $___________.

Area = 1/2 Base x Height 69,000 - 22,000 = 47,000 47,000 x 1/2 = 23,500 68 - 21 = 47 47 x 23,500 = $1,104,500

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when - Marginal benefit is maximized - Marginal benefit is greater than marginal cost - Marginal cost is zero - Marginal benefit equals marginal cost

Marginal benefit equals marginal cost

Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn ​$400,000 next year playing for a minor league baseball​ team, ​$700,000 next year playing for a European professional football​ team, or​ $0 returning to college for another year. The opportunity cost of the student-athlete returning to college next year is $_______________.

$700,000

______________ is concerned with what is, and _________________ is concerned with what ought to be. Economics is about ________________, which measures the costs and benefits of different courses of action. Blank 1: - Positive analysis - Neutral analysis - Normative analysis Blank 2: - Positive analysis - Neutral analysis - Normative analysis Blank 3: - Positive analysis - Neutral analysis - Normative analysis

Blank 1: Positive analysis Blank 2: Normative analysis Blank 3: Positive analysis

A market is a group of ______________ of a good or service and the institution or arrangement by which they come together to trade. - Sellers - Buyers and sellers - Buyers

Buyers and sellers

The diagram to the right represents a demand curve for apples. The original demand curve is D1. If a factor other than price which affects demand changes, causing demand to increase, the resultant demand curve is represented by _____________. - D1 - D2 - D3

D2

​Suppose, in an effort to prevent the population from​ declining, Italy begins offering new mothers extended periods of paid family leave from work​ and, consequently, the birthrate per woman increases. If​ so, then this could best be characterized as an example of people responding to: - Envy - Economic incentives - Accounting principles - Compassion - Religious beliefs

Economic incentives

____________ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

Microeconomics is the study of: - Firms as individual units excluding how these firms interact with one another. - ​​"Small" (less than​ $100,000) economic transactions in the economy. - The economy as a whole, including topics such as​ inflation, unemployment, and economic growth. - How households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

How households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

When economists develop models designed to explain the choices people​ make, they generally assume that: - Consumers do not use all available information - People make the best decisions - People are rational - Consumers do not act to achieve their goals - Everyone knows everything

People are rational

Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domestic product​ (GDP) is an important macroeconomic variable. If in 2010 GDP was​ $11,150 billion​ dollars, and GDP increased to ​$11,576 billion in​ 2011, what is the growth rate of the U.S. economy in​ 2011? ______________%

Percentage change = ((Value in 2nd period - Value in 1st period) / Value in 1st period) x 100 3.8%

Suppose an analyst estimates how many jobs have been lost from family leave laws. This is an example of: - Normative analysis - Positive analysis

Positive analysis

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls - Rationality - The market - Scarcity - Economics

Scarcity

Opportunity cost is: - When unlimited wants exceed the limited resources available to fulfill those wants. - The idea that because of scarcity, producing more of one good or service means producing less of another good or service. - When consumers and firms use all available information as they act to achieve their goals. - The highest valued alternative that must be given up to engage in an activity.

The highest valued alternative that must be given up to engage in an activity.

A _________________ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources. - Centrally planned - Market - Mixed

Mixed

The diagram to the right illustrates a demand curve. As with all demand ​curves, this​ curve's slope is _______________. - Infinite - Negative - Zero - Positive

Negative

Macroeconomics is: - The study of firms as a group with special emphasis on how these firms interact with one another. - The study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. - The study of how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices. - The study of "large" (greater than $100,000) economic transactions in the economy.

The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.

Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions: - One, what goods and services will be produced? Two, how will the goods and services be produced? Three, who will receive the goods and services produced? - One, what goods and services will be produced? Two, how will the goods and services be produced? Three, is the distribution of goods and services fair? - One, what goods and services will be produced domestically? Two, how will the goods and services be produced? Three, is the distribution of goods and services fair? - One, what goods and services will be produced in foreign countries? Two, who will produce the goods and services? Three, who will receive the goods and services produced?

One, what goods and services will be produced? Two, how will the goods and services be produced? Three, who will receive the goods and services produced?