Midterm Review Exam 1

Which of the following are roles of the economist?

• Analyze situations related to problems faced due to scarcity

• Predict outcomes based on given economic information, related to resource limitations

• Suggest efficient solutions to help solve problems faced due to scarcity

• All of the above.

The central problem in economics is that resources are

The solution or policy that gives the highest benefit at the lowest cost is said to be the most ____________ solution.

Which of the following are topics for microeconomists to study?

• Increases in the price of college impacting first generation students

• Change in U.S. monetary policy

• Temperature changes impacting growth of crops in Asia

• Improved machinery helping production for widgets in New England

Professor Matkowski created this activity to help with studying and is giving extra credit to the winner(s) as motivation to try hard on this activity. As a result, students try hard to learn the content and get the bonus points. Which option best describes the situation detailed above?

• Positive incentive

  Direct incentive

• Positive incentive

  Indirect incentive

• Negative incentive

  Direct incentive

• Negative incentive

  Indirect incentive

Instead of attending this review session/class, you could be having dinner at Salmo. This is an example of the idea that people face

Professor Matkowski made this review activity. His next best alternative was relaxing and binge-watching Disney+ or Netflix. What is a direct cost of the decision made?

• Watching Disney+

• Entertainment value of watching Disney+

• Time

• Driving

What would be the opportunity cost for you redoing this activity in your free time instead of watching your favorite movie?

• The impression you make on Professor Matkowski for spending time studying

• Your higher score on the midterm due to studying

• The money saved by not needing to purchase the movie.

• The entertainment value of the movie.

When I consider the costs and benefits of eating another cookie, I am using __________ thinking.

A foundational concept of economics is that _____ creates value.