Exam 1: Ten Principles of Economics

Using income tax revenue to fund the welfare system illustrates the conflict between efficiency and equality.

A marginal change is a small incremental adjustment to an existing plan of action.

The principle that "people face tradeoffs" applies to

What are the two possible causes of market failure?

The "invisible hand" works to promote general well-being in the economy primarily through

Efficiency means that

Bridget drinks three sodas during a particular day. The marginal benefit she enjoys from drinking the third soda

In the short run, an increase in the money supply is likely to lead to

In a market economy,

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Market economies are distinguished from other types of economies largely on the basis of

Which of the following is not one of the four principles of individual decision making?

The marginal benefit Susie gets from purchasing a third pair of gloves is

You have eaten two bowls of ice cream at Sundae School Ice Cream store. You consider eating a third. As a rational consumer you should make your choice by comparing

Trade between countries tends to

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

The collapse of communism in the Soviet Union and Eastern Europe took place mainly in the

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. The airline should sell a ticket to a standby passenger only if the passenger is willing to pay

Tim decides to spend four hours playing video games rather than attending his classes. His opportunity cost of playing games is

Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level. Which country can benefit?