Exam 1: Ten Principles of Economics

Economics is the study of how society manages its

Hamid spends an hour studying instead of watching TV with his friends. The opportunity cost to him of studying is

A rational decision maker takes an action only if the

When calculating the cost of college, which of the following should you probably not include?

The principle that trade can make everyone better off applies to

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

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 studying economics?

The property of society getting the most it can from its scarce resources is called

Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time.

The opportunity cost of working one hour is the sum of the values you would have received from all other activities you could have done in that hour.​

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

The term ______ refers to a small incremental adjustment to an existing plan of action.

When a society cannot produce all the goods and services people wish to have, the economy is experiencing

Government policies can change the costs and benefits that people face. Those policies have the potential to

In which of the following decades was there both high inflation and rapid money supply growth in the US?

Bill is restoring a car and has already spent $4000 on the restoration. He expects to be able to sell the car for $6200. Bill discovers that he needs to do an additional $2400 of work to make the car worth $6200 to potential buyers. He could also sell the car now, without completing the additional work, for $3800. What should he do?

Ashley eats two bananas during a particular day. The marginal benefit she enjoys from eating the second banana

Which of the following is true about how the "invisible hand" influences economic activity through prices when a product has lower demand than supply?​

Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $120, so she can only buy one. This illustrates the basic concept that

Suppose after graduating from college you get a job working at a bank earning $30,000 per year. After two years of working at the bank earning the same salary, you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank. Which of the following should not be included in a calculation of your opportunity cost?