Macro- exam 1

In a market economy, those who are willing and able to buy what is produce

receive the most of what is produced.

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. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package?

$10

Hours Open Total Revenue (dollars) 1 $40 2 65 3 80 4 90 5 95 6 98 Table 1 Julius runs a small tailor shop in the city of Bloomfield. He is debating whether he should extend his hours of operation. Julius figures that his sales revenue will depend on the number of additional hours the tailor shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour

2 hours

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 gallon of milk

A) 1 2/3 dozen eggs

Economics promotes which of the following as the way to make the best decision

Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost

One reason some manufacturing companies began moving production to China in the early 2000s was due to lower wages that could be paid to Chinese workers. Moving manufacturing to China to take advantage of lower wages so goods could be produced at a lower cost than if produced in the United States exemplifies which key economic idea?

People respond to economic incentives.

Marginal cost is the ________ associated with a particular increase in an activity

additional cost

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs.

allocative efficiency

Voluntary exchange increases economic efficiency

because neither the buyer nor the seller would agree to a trade unless they both benefit.

Which of the following is part of an economic model?

data

Every society faces economic trade-offs. This means

producing more of one good means less of another good can be produced

The study of economics arises due to

scarcity

Opportunity cost is defined as

the highest valued alternative that must be given up to engage in an activity.