econ test
You have been invited to play a 4-hour round of golf that has a value to you of $60. The total price to play the round of golf is $25.
35 4 golf
Suppose you currently rent an apartment in Location Upper BBy moving to optimize, you change your net benefit by $
62
Which of the following statements regarding the principle of optimization is true
A. It takes into account and evaluates multiple trade-offs. It is the unifying principle that connects various seemingly unrelated decisions.
Empiricism describes a situation where
economists use data to analyze what is happening in the world
During the process of optimization economists believe that people are considering
A. the feasibility of a choice, given the information available at the time.
When economists test their theories using evidence-based analysis, they are most likely using
empiricism through the use of data.
The relationship that exists between these two variables can be described as
negatively related
Suppose the university is trying to determine the most efficient way to allocate the rooms such that those who value the rooms the most get them. Which of the following would you suggest as the most efficient?
Auctioning the rooms to the highest bidders.
In which of the following situations is optimization a good description of behavior?
B. Tia is a very fun loving person. She chooses to go on a vacation with friends instead of volunteering at NGO as a vacation is more enjoyable.
What tool would you employ to analyze the relationship between gasoline prices and consumer behavior?
Economic models.
Suppose you are on a date with an economics major, and you want to impress them by asking good economic questions. Two characteristics of a good economic question are:
It is important to individuals or society It can be answered
In which of the following areas will taking an economics course help benefit you throughout your life?
It will instill the concept that what activity is given up by a decision plays an important role when making choices. B. It will give you the logic behind using cost-benefit analysis when evaluating decisions. C. It will help you analyze and predict human behavior in a variety of situations.
Suppose apartments are in four locations: Location A, Location B, Location C, and Location D. Location A is in the city, where your job is. Location B is 10 minutes farther from your job than Location A. Location C is 10 minutes farther from your job than Location B, and Location D is 10 minutes farther than Location C. In turn, similar apartments in Location B rent for $185 less per month than apartments in Location A, apartments in Location C rent for $185 less than in Location B, and apartments in Location D rent for $185 less than in Location C. Suppose the value of your time is $22 per hour and you work 21 days per month, with each day requiring a round-trip commute from your apartment to work.For simplicity, assume rent and the opportunity cost of your time commuting to work are the only factors influencing the location in which to rent an apartment.You should rent an apartment in .
Location D
Which of the following is not a characteristic of a market?
Markets are physical locations where trading occurs
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. In your first presentation to management, how would you describe your planned methodology to perform the analysis?
Scientific method.
Alternatively, you have the option of working as many hours as you want, earning $11 per hour. Assume this is the next best use of your time. Use the marginal principle to find your optimal number of hours to spend with your spouse per day.
The optimal amount of time for you to spend with your spouse is 5 hours per day. 5 hours is worth 80
Causation implies
a causes b if, because of a, b has occurred.
You should collect indicated by the economic model.
a large, amount of data to create to test the hypotheses hypotheses
Economists study only things related to money all human behavior ; therefore, the unifying feature of economics is a focus on
all human behavior , choice
his can be shown graphically with upply curve or numerically in a table using a The relationship that exists between these two variables can be described as
an upward-sloping supply schedule + relation
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 hat the quantity supplied i the quantity demanded.
competitive equilibrium equal to
Equilibrium describes a situation where
no one would benefit from changing his or her behavior
The amount produced by sellers must be the amount purchased by buyers.
equal to
Buyers must place a value on the uses of the product that is the cost of buying the product.
greater than
An example of causation is
if you work fewer hours, you will earn less money.
The costs of making a product must be the final price at which the product sells
less than
In this case, correlation does not equal causation most likely due to .
omitted variables
The goal of optimization for an individual is to maximize
overall well-being
optimization Optimization describes a situation where
people weigh costs and benefits when making a decision
Now assume that you have a job that pays you $6 per hour. Would you be optimizing to accept the invitation to play golf?
play
The Law of Demand states that as the price of a good increases, ceteris paribus, the decreases. This can be shown graphically with demand curve or numerically in a table using a .
quantity demanded , a downward-sloping demand schedule
Suppose a new off-campus university apartment complex could rent its rooms on the open market for $900 a month. If, instead, the university chooses to cap the price of rooms to $500 a month for students, the result would be that
quantity demanded would exceed the quantity supplied, resulting in a shortage.
The Law of Supply states that as the price of a good increases, ceteris paribus, the of that good increases.
quantity supplied
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 has requested that your consulting team expatiate on the factors that impact gasoline prices. One of the members of your team, Debbie, states that she has noticed that gasoline prices seem to rise in years when a National League baseball team wins the World Series. You include this observation in your report because it is correlation, not causation .
should not, orrelation, not causation