Exam 1: Ten Principles of Economics

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?

Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor.

Scenario 1-1 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $8.00 on a ticket and $4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points. -Refer to Scenario 1-1. What is your opportunity cost of studying economics?

Evidence indicates that seat belt laws have led to

Public policies

A variety of fuels can be used to generate electricity. Considering only the availability of the fuel and not the cost of converting it into electricity, which of the following fuels is most scarce?

A rational decisionmaker

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Scenario 1-2 Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour. -Refer to Scenario 1-2. What is your opportunity cost of working?

Mary and Martha both can make cookies and cakes of the same quality, though Mary can make more of both cookies and cakes per hour than Martha. With the bake-sale quickly approaching, they want to make as many cookies and cakes as possible. In which of the following situations will the most cookies and cakes be made?

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless the marginal

Government policies that improve equality usually increase efficiency at the same time.

In a centrally-planned economy, economic activity is guided by ______.

What are the two basic types of economies?

Which of the following products would be considered scarce?

The adage, "There is no such thing as a free lunch," means

Economists use the term ______ to refer to the ability of a single person (or a small group) to have a substantial influence on market prices.

The income of a typical worker in a country is most closely linked to which of the following?

Give an example of a trade-off faced by society.

The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?