Exam 1: Ten Principles of Economics

Scenario 1-4 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 $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points. -Refer to Scenario 1-4. What is your opportunity cost of going to the movies?

Invisible hand is a term used by the economist ______ to describe how the decisions of households and firms lead to desirable market outcomes.

Which of the following is the most correct statement about the relationship between inflation and unemployment?

The fact that different countries experience different standards of living is largely explained by differences in those countries'

For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%. Country B had inflation of 4% for many years, but very recently inflation unexpectedly rose to 9%. Other things the same, in which of the countries would the higher inflation rate be more likely to reduce unemployment?

Suppose that in Brazil total annual output is worth $600 million and people work 30 million hours. In Peru total annual output is worth $800 million and people work 50 million hours. Productivity is higher

Scenario 1-5 Suppose that you have a choice between going to the movies with a friend for three hours or working at your job. If you go to the movies, you will spend $12 on a ticket and $6 on popcorn. If you choose to work, you will earn $10 an hour. -Refer to Scenario 1-5. What is your opportunity cost of going to the movies?

Rational people make decisions "at the margin" by comparing

Consider two countries, Muria and Zenya. In Muria total annual output is worth $800 million and people work 40 million hours. In Zenya total annual output is worth $900 million and people work 50 million hours. In which country is productivity higher?

To promote good economic outcomes, policymakers should strive to enact policies that

Which of the following rates of growth in the money supply is likely to lead to the lowest level of inflation in the economy?

Economists study how people make decisions.

Under what conditions might government intervention in a market economy improve the economy's performance?

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

If the government were to intervene in a market economy and fix the price of visiting a health care provider below the market price, then we would expect, relative to the market outcome,