Dr. Gary Stone, Winthrop University

ECONOMIC REASONING EXERCISE

1. You have an average grade of 83.4 on your first three exams. On your fourth exam

your grade is 90.0. Your average grade on four exams will be (greater than, equal to,

less	than) 83.4.

2. In the market for stuffed animals, because of a surge in national patriotism more and

more Americans decide to buy stuffed animal eagles. This would tend to (increase,

decrease) the price of stuffed animal eagles.

3. Your aunt Trina makes three different types of stuffed animals - lions, walruses,

eagles - which she sells over the Internet in the market for stuffed animals. If the

price of stuffed eagles rises while the prices of lions and walruses are unchanged,

should Aunt Trina produce (more, the same amount, less) stuffed eagles than she did

before?

4. Your front yard is a rectangle which measures 100 feet by 50 feet. The area of your

front yard is ____ square feet.

5. You take a walk along a mountain trail. At the top of a hill you find a $100 bill on the

ground. Twenty feet later you find a $50 bill. Another twenty feet along the trail you

find a $20 bill. Around the next turn you find a $10 bill.

(a)	You should pick up (all the bills, only the $100 bill).

(b)	If you picked up all the bills, you would have a total of $____.

6. Suppose I offered to give you an envelope with $5 in it if you would give me $8.

Would you do it? (Yes, No)

7. Suppose I offered to give you an envelope with $5 in it if you would give me $2.

Would you do it? (Yes, No)

8. You like Sparkling Cherry Candy. If the price of a bag of Sparkling Cherry Candy

decreases, would you buy (more, the same amount, less) of the candy each month?

9. Assume that after you complete this course, other students want you to tutor them in

the field of economics. Given your busy schedule, you have to make choices on

where you will allocate your hours - sleeping, studying, being with friends, tutoring,

etc. You would devote more hours to tutoring if the payment for each hour of tutoring

were ($5, $25).

10. True False It makes sound economic sense that major league baseball players earn

millions of dollars each year while outstanding high school teachers earn much,

much less.