What Economics is About

Later, the teaching assistant in Bob's chemistry course gives him some advice. "Based on past experience," the teaching assistant says, "working on 70 problems raises a student's exam score by about the same amount as reading the textbook for 1 hour." For simplicity, assume students always cover the same number of pages during each hour they spend reading. Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading? 1 hour working on problems, 3 hours reading 2 hours working on problems, 2 hours reading 3 hours working on problems, 1 hour reading 4 hours working on problems, 0 hours reading

1 hour working on problems, 3 hours reading

A musical instrument used by a professional band is an element of Labor, Capital, or Land?

Capital

Winona is a research assistant for her favorite physics professor, Dr. McClintock. Dr. McClintock is interested in studying the effects of different materials for tires on the velocity of model cars rolling down an inclined plane. Winona knows from her economics class that to isolate the effects of a particular phenomenon, all other things must remain the same. In Latin, this is referred to as _________ __________.

Ceteris Paribus

The physical strength one develops through weight training is an element of Labor, Capital, or Land?

Labor

Oil that needs to be extracted for the production of gasoline is an element of Labor, Capital, or Land?

Land

The effects of government tax policy on long-term economic growth Micro/Macro economics?

Macroeconomics

It is immoral for a government to redistribute money from one person to another Positive/Normative?

Normative

Taxes are too high Positive/Normative?

Normative

In some circumstances, if taxes are lowered, government revenues actually increase Positive/Normative?

Positive

When the government increases taxes, rates of tax evasion increase Positive/Normative?

Positive

Scarcity generates the need for a rationing device T/F

True

Bob is a hard-working college freshman. One Tuesday, he decides to work nonstop until he has answered 200 practice problems for his chemistry course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem. Time Total Problems Answered 8:00 AM 0 9:00 AM 80 10:00 AM 140 11:00 AM 180 Noon 200 The marginal, or additional, gain from Bob's first hour of work, from 8:00 AM to 9:00 AM, is _____ problems. The marginal gain from Bob's third hour of work, from 10:00 AM to 11:00 AM, is_____problems.

80,40

Eileen and Manuel need to decide which one of them will take time off from work to complete the rather urgent task of changing the brakes on their car. Eileen is pretty good at car repairs; she can change the brakes in 1 hour. Manuel is somewhat slow; it takes him 6 hours to change the brakes. Eileen earns $120 per hour as a psychiatrist, while Manuel earns $15 per hour as a cobbler. Keeping in mind that either Eileen or Manuel must take time off from work to change the brakes, who has the lowest opportunity cost of completing the task? Eileen and Manuel face identical opportunity costs Eileen Manuel

Manuel

A consumer's optimal choice when buying a flat-screen TV Micro/Macro economics?

Microeconomics

A firm's decision about the size of its new factory Micro/Macro economics?

Microeconomics