econ exam 5

  1. The​ cause, or independent​ variable, should be plotted on the ___ and the​ effect, or dependent​ variable, should be plotted on the ___
    x-axis, y- axis
  2. Optimization is the process that describes
    the choices that businesses make.
  3. Optimization in levels examines _____, while optimization in differences analyzes the ___
    total net benefits of alternatives, change in net benefits.
  4. What measures could it take to ensure that people choose to live closer to the central business district?
    Tax traffic moving in and out of the city
  5. How would you go about making an optimal decision about which school to attend?
    By comparing the net benefits from attending the three schools.
  6. Suppose you have to give up a job that pays you  $40,000 a year to attend business school. How would this affect your calculation of whether to attend business school?
    It will increase the indirect cost of your time, making you less likely to attend business school.
  7. You and Jim would need to consider ?
    the direct costs and the indirect opportunity cost of your time required to shop.
  8. There is a proverb  "anything worth doing is worth doing  well."Do you think an economist would agree with this  proverb?
    No, because the marginal cost of extra effort may be greater than the marginal benefit.
  9. Since optimization is used to analyze​ people's choices and help them improve the outcomes of their​ choices, its
    both normative and positive.
  10. John is attempting to decide on a movie. He determines that the new Batman movie provides him with​ $5 more of a net benefit than the new Spiderman movie
    Optimization in differences, since he is calculating the change in net benefits between alternatives.
Card Set
econ exam 5
exam 1