Exam 1: What Is Economics

Even though international trade is undertaken voluntarily, a country that engages in trade may not benefit from it.

Consider the following information regarding a person's decision to go to college: college tuition is $20,000 per year, room and board is $10,000 per year, and books and materials are $2,000 per year.Suppose that instead of going to college this person could have earned $18,000 working in a store.An economist would calculate the cost of going to college as

Efforts to reduce the unemployment rate are likely, in the short run, to lead to

Jack buys a computer from Sam, knowing fully well that the technology used in it is obsolete.In this case, the trade is

Slope will vary along a curve (as opposed to a straight line).

When residents surrounding an airport complain about noise from aircraft landings and takeoffs, the relevant economic analysis is that of

To an economist, the cost of a college education

Suppose that one can read a graph that shows information about price and quantity of some product.Relying solely on the graph, is it possible to explain the relationship between the two variables?

A vertical line has a slope of

When a teacher in a private school points out to her high school principal that since there are empty seats in all classrooms, the cost of additional students is really zero, she is using the

Which of the following is an example of a fiscal policy initiative?

"The hotter it gets, the more water people drink." This statement implies that the relationship between temperature and water consumption must have a

The word "theory" means the same to the scientist as it does to the man on the street.

The United States produces both automobiles and computers more efficiently than Mexico.Nevertheless, it is possible that both nations would benefit from trade in these items.The reason for this is

The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth.This layer protects humans from ultraviolet radiation, which causes skin cancer.Industry has been prohibited from using these substances in aerosol cans, but the government has been reluctant to ban their use altogether because of the serious economic consequences.Economists analyze such problems and refer to them as

The slope of a curved line differs from that of a straight line in that

Which of the following is an example of an externality?

Abstraction is unnecessary when economic analysis is done properly.

Comparative advantage explains how two nations can benefit from trade.

Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college.How would an economist look at the matter?