ECON 201 Quiz 1

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

$1,020

In the United States in 2012, the CDC estimated that the total number of people with diabetes (both diagnosed and undiagnosed cases) was lowest for people in the age range of ________, and the percentage of people with diabetes was lowest for people in the age range of ________.

20 - 44; 20 - 44

Refer to Figure 2-13. Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

J and M

Economic models

are simplified versions of reality.

The revenue received from the sale of an additional unit of a product

is a marginal benefit to the firm.

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

$12

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

$15,000

At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored-beverage producer announced, "We have increased our sales by 8 percent in just six months." Suppose six months ago, its sales amounted to $452,000, what is the value of its sales today?

$488,160

Table 2-8 shows the output per month of two people, Wilma and Betty. They can either devote their time to making marble statues or making marble benches. Refer to Table 2-8. What is Betty's opportunity cost of making a bench?

2 statues

The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a dozen eggs?

3/5 of a gallon of milk

Your roommate, Serafina, a psychology major, said, "The problem with economics is that it assumes that consumers and firms always make the correct decision. But we know that everyone's human, and we all make mistakes." Do you agree with her comment?

I disagree with her. Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave rationally, meaning they make the best decisions given their knowledge of the costs and benefits.

For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries?

Switzerland has the comparative advantage in watches.

Which of the following best describes an assumption economists make about human behavior?

They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.

Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests. Suppose your classmate, Heidi, purchased two tickets for $40 each. Is this transaction economically efficient?

Yes, it was a voluntary exchange that benefited both parties.

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.Refer to Figure 2-4. Consider the following events:a. a decrease in the unemployment rateb. general technological advancementc. an increase in consumer wealthWhich of the events listed above could cause a movement from V to X?

a only

If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years, it is known as

a time-series graph.

How can the influence of a third variable be shown on a two-dimensional graph?

by allowing the position of the relationship line or curve to shift on the graph

Competition forces firms to produce and sell products as long as the ________ to consumers exceeds the ________ of production.

marginal benefit; marginal cost

When Dr. Goldfinger decides on the companies in which he will invest, a ________ issue is being addressed.

microeconomic

Technological progress has made it possible for firms such as Apple and Alivecor to develop small electronic devices, including smartwatches, smartphones, and products that can be attached to the smartwatches and smartphones, to serve consumers who have become more health conscious and wish to monitor various health conditions. These firms are reacting to which of the three key economic ideas?

people respond to economic incentives

When goods and services are produced at the lowest possible cost, ________ occurs.

productive efficiency

In the circular flow model, households

spend earnings from resource sales on goods and services in the product market.

The processes used to produce goods and services describes

technology

Human capital refers to

the accumulated skills and training workers have.

Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. Should Lionel continue to offer the shrub-trimming service?

yes, his marginal benefit is greater than his marginal cost