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1
CONCEPT
! What is Economics?
2
3
CONCEPT
! What is Economics?
4
CONCEPT
! Resource Allocation for Consumers
5
CONCEPT
! Resource Allocation for Firms
6
CONCEPT
! Changes in Demand and Movements
along Demand Curve
7
CONCEPT
! Cost and Benefit Optimization for
Producers
8
CONCEPT
! Decision Making Relationships: Rational
Consumer
9
CONCEPT
! Changes in Supply and Movements along
Supply Curve
10
CONCEPT
! Market Equilibrium
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CONCEPT
! Resource Allocation for Firms
12
CONCEPT
! Market Equilibrium
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14
CONCEPT
! Cost and Benefit Optimization for
Consumers
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16
CONCEPT
! Decision Making Relationships: Rational
Firm
17
CONCEPT
! Cost and Benefit Optimization for
Consumers
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18/20 " that's 90%
Well done! If you keep getting
Milestone scores like this you'll pass
the course.
!18 questions were answered correctly.
2 questions were answered
incorrectly.
Which of the following is true about the field
of economics?
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Which of the following combinations contains
both an intermediate good and a final good?
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Which of the following would a student of
macroeconomics NOT study?
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Which choice below is a factor in the process
of resource allocation for consumers?
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Bob opens a new diner and has to make many
decisions about the resources he is going to
employ.
Which of the following combinations is
NOT correct?
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When the small town where Grand Vacations
was located experienced an increase in its
unemployment rate, the travel agency, whose
prices remained constant, saw a decline in the
number of customers seeking its services.
Which of the economic principles below is
being demonstrated in this example?
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A firm trying to maximize profit will produce
up to the point that marginal revenue is
__________.
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Determine which of the following is an
example of opportunity cost.
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Movement along the supply curve is most
likely caused by which of the following?
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Joe paid $5,000 for a used car, but he was
willing to pay as much as $10,000.
Which economic concept below corresponds
to the example above?
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Which statement below is NOT true regarding
short-run and long-run production
constraints?
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Consumer surplus exists in which of the
following situations?
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When Joe went back to college to finish his
degree in Economics, he cut back from full-
time to part-time work at his firm. During this
time, the lease on his SUV ran out and he
leased a smaller compact car as a result.
The smaller compact car is an example of
which type of good?
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Tania really enjoyed the salads sold at her
local grocery store, so she purchased five of
them to eat throughout the week. The first
salad is delicious, and Tania eats it quickly,
looking forward to the next one. The second
day, the next salad is also good. By the third
day, some of the ingredients in the next salad
are starting to go bad, and by the fourth day,
Tania cannot bring herself to eat any more and
throws away the remaining salads.
Which statement would be unlikely in
economic terms?
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Which of the following is an example of an
inferior good?
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A firm acts as a rational decision maker when
its leaders decide to do which of the
following?
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Alex was shopping for his son's birthday party
and had already purchased $75 worth of
supplies. He was debating whether or not to
spend another $25 for a piñata.
Which statement below best defines marginal
cost?
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A local supermarket was forced to hold a sale
on beef when they received an extra
shipment of this perishable good. Over the
course of the weekend, the store sold twice
as many packages of ground beef as they
normally do.
This is an example of which economic
principle?
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Economics is commonly broken
into Labor Economics and
Consumer Economics
$
Economics is a social science that
intersects with other fields of
study
"
Economics as a field of study was
introduced during the Industrial
Revolution and has not changed
over time
"
Economics can correctly predict
when a recession is coming and
how long it will last
"Architect and new building
"
Changes in the overall price level
in an economy over time
"
How governments can act to
alleviate a recession
"
The percentage of a nation's
labor force that is employed
$
How the price of apples affects
the market for oranges
"
A computer ordering system for
staff is an example of technology.
$
The restaurant building is an
example of land.
"
The wait staff is an example of
labor.
"
A brick oven is an example of
capital.
"
Movement along the demand
curve
$
Movement along the supply
curve
"less than marginal benefit
"greater than marginal cost
"equal to marginal benefit
"
We have a week of vacation. Let's
go on a Mexican cruise.
$
If I take a second job, I will have
more money, but less time to
spend with my family.
"
How many times will I be able to
wear this shirt before it falls apart
or goes out of style?
"
With my current salary, I can only
afford to spend $500/month on
food.
"Government taxes or subsidies
"
The standard assumption in
economics is that all factors are
variable in the long-run.
"
The size of the site of production
is variable in the long-run.
$
Constraints are variable in the
short-run and fixed in the long-
run.
"
Changes in production capacity
are more variable in the long-run.
"
The price of movie tickets falls
and Ralph takes his entire family
to the movies.
"
Sam decides not to purchase a
new bicycle until the price falls by
$10.
"
Craig is happy to purchase three
DVDs at $15 each.
$
Sarah is willing to pay the $60
ticket price for an upcoming
concert, but is happy to buy a
ticket from her roommate for $45.
"
Tania's marginal benefit was
higher for the first two salads
than the third and fourth.
"
Tania would achieve higher
marginal utility by eating
something other than the fourth
salad.
"
Tania would achieve higher
marginal utility if she purchased
fewer salads.
$
Tania achieved utility
maximization with her purchase
of five salads.
"
Every once in a while, Nelly treats
herself to a manicure and
pedicure with a massage.
"
A famous brand of leather good
produces a handbag that costs as
much as a used car. Although it is
far from cheap, it is one of the
brand's most popular items.
$
Chris just graduated from college
and sometimes eats ramen
noodles when his finances get
tight. After he gets his paycheck,
he purchases less ramen noodles
as he can afford healthier food.
"
Very poor people in China
consume a great deal of rice.
When the price of rice rises,
consumption of it may even rise.
$
Cut hours and workers in order to
minimize costs
"
Solely using labor in a production
process, rather than a
combination of labor and capital
"
Entice investors by promising
lower than average returns on
investment
"
Using all of its resources in order
to maximize production,
regardless of profit
"
The $100 amount he was
considering spending overall
"The $75 he had already spent
"
What he will have to give up in
his budget to afford the total bill
UNIT 1 — MILESTONE 118/20
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