HW Chapter 1

Percentage change

(value in the second period - value in the first period / value in the first period) x 100

Slope formula

(y2 - y1)/(x2 - x1)

Area of triangle

1/2 x base x height

In your economics class, you scored a 67 on the first quiz, a 86 on the second quiz, and a 79 on the third quiz. Your average quiz is _____. On the fourth quiz, you scored an 82. Did the fourth quiz raise your average?

77.3 Yes

Scarcity is central to the study of economics because it implies that

Every choice involves an opportunity cost

The effect of higher income taxes on the total amount of consumer spending. This is a _____ issue.

Macroeconomic

The reasons for the economics of East Asian countries growing faster than the economies of sub-Saharan African countries. This is a _____ issue.

Macroeconomic

Which of the following areas of economics studies issues such as whether government intervention is capable of reducing the severity of recessions?

Macroeconomics

Which of the following covers the study of topics such as inflation or unemployment?

Macroeconomics

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

Marginal benefit equals marginal cost

The effect of higher cigarette taxes on the quantity of cigarettes sold. This is a _____ issue

Microeconomic

The reasons for low rates of profit in the airline industry. This is a _____ issue.

Microeconomic

Which of the following areas of economics studies issues such as ways to reduce teenage smoking?

Microeconomics

A primary difference between macroeconomics and microeconomics is

Microeconomics examines individual markets while macroeconomics examines the economy as a whole.

In the diagram to the right, the curve "S" is apparently _____, while the curve labeled "D" is apparently _____.

Nonlinear Linear

What type of economic analysis is concerned with the way things ought to be?

Normative Analysis

The federal government should spend more on AIDS research. This represents

Normative analysis

The price of coffee at Starbucks is too high. This represents

Normative analysis

A 50-cent-per-pack tax on cigarettes will reduce smoking by teenagers by 12 percent. This represents

Positive analysis

Rising paper prices will increase textbook prices. This represents

Positive analysis

______ is concerned with what is, and _____ is concerned with what ought to be. Economists is about _____, which measures the costs and benefits of different courses of action.

Positive analysis Normative analysis Positive analysis

Total revenue

Price x Quantity

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

Scarcity

Macroeconomics is

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

Economists assume that people are rational in the sense that

They are all available information as they take actions intended to achieve their goals

Macroeconomics is most likely to include the study of

Unemployment

Which of the following describes scarcity?

Unlimited wants exceed the limited resources available

Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational?

When we assume the managers at Microsoft have used all available information and have weighted all known benefits and costs, we are assuming rationality

Microeconomics is the study of

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