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