Exam 1: The Economic Approach

Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he

Economics is primarily the study of

Which of the following is a normative economic statement?

Why would a radio station give money to listeners? Does this violate the economic way of thinking?

When economists say goods are scarce, they mean

Which of the following is most consistent with economizing behavior?

In economics, secondary effects refer to the

The benefit (or satisfaction) that an individual expects to derive from an activity is called

Homeowners can deduct interest payments on their mortgages from their federal income tax. If this deduction were removed, how would the housing market be affected?

Which of the following is true about federal spending?

When economists say an individual displays economizing behavior, they simply mean that she is

Economic analysis assumes that

If people are self-interested, why does anyone give money to public radio?

While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Kayla notices that the restaurant has a value meal containing three tacos and a medium drink all for $3. For Kayla, the marginal cost of the third taco would be

Liam wants to buy some milk and a box of cereal. If Liam buys 4 gallons of milk at $3.00 per gallon, the box of cereal costs $2.00. If he buys 5 gallons of milk, the box of cereal is free. For Liam, the marginal cost of buying a fifth gallon of milk is

When the tax structure of a nation is progressive, as real incomes increase, the tax revenues of the government will

In 1980, the top 1 percent of earners paid 19.1 percent of the federal personal income tax. By 2013, the share of this tax collected from the top 1 percent of earners

A radio station gives "free money" to those listeners whose names are drawn and announced over the airwaves from postcards the listeners sent into the radio station. Is the money really free for the listener?

The basic difference between macroeconomics and microeconomics is that

Compared to the situation prior to 1980, the top marginal personal income tax rate imposed on the rich is now substantially