Exam (elaborations) ECON 102

1. In class, we discussed the minimum wage. Is the minimum wage a price floor or a price ceiling? Name one reason for and one reason against raising the minimum wage. 2. Our economy is “self-organized and decentralized”. What does this mean? Who decides prices and quantities of goods? You may want to think about the main characteristics of market economies when answering this question. 3. Explain what it means for a good to be scarce. 4. Intuitively explain in one sentence what opportunity cost is. 5. Remember that consumers try to maximize utility. What is utility? 6. What does ceteris paribus mean? 7. Are the following statements positive or normative? (fill in the blank) Economics students perform better on the LSAT than any other major. Janitors do a lot of hard work and should get paid more. _ .........................................CONTINUED..............................................