Exam 1: Ten Principles of Economics

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

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

Which of the following is correct concerning opportunity cost?

Benefits from trade would not include

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

Suppose one county in Missouri decides it wants to reduce alcohol consumption, so the county passes a law that raises the price of a bottle of beer by $1. As a result, people drive to other counties to drink alcohol, which results in an increase in drunk driving. This illustrates the principle that people respond to incentives.

With careful planning, we can usually get something that we like without having to give up something else that we like.

Which of the following could reduce economic efficiency?

When the United States trades with China,

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

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

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of

It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then

A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of

Explain how government policies that redistribute income from the rich to the poor might reduce efficiency.

An example of an externality is the impact of

Trade with any nation can be mutually beneficial.

People are likely to respond to a policy change

The business cycle is measured by the

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by