Exam 1: Ten Lessons From Economics

An externality is the impact of:

A market economy rewards people according to their ability to produce things that other people are willing to pay for.

International trade:

One trade-off that society faces is between efficiency and equity.Define each term and explain this trade-off.

What is one situation in which the government can improve the market outcome?

In international trade, if one party gains, the other party loses.

Tim decides to spend an hour looking at cat videos on YouTube instead of going to the gym.The opportunity cost of him looking at cat videos is:

When the government redistributes income from the rich to the poor, society benefits since there are more poor than rich.

People make decisions at the margin by:

If stricter regulations are used to reduce pollution then:

Which is the best example of an economic actor with market power?

A situation in which a market left on its own fails to allocate resources efficiently is known as:

The marginal cost of something is what you give up to get one extra unit of a good.

Protecting domestic jobs from foreign competition is the best way to raise labour productivity.

The word 'economy' comes from the Greek word for:

Economists have recognised that people respond to:

The scarcity problem:

Which of the following tends to decrease productivity?

The historical rise in living standards of Australian workers is primarily a result of:

What does the adage 'There is no such thing as a free lunch' mean?