Exam 1: Ten Principles of Economics.

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight.If the marginal cost of operating one room for one night is $40,the hotel manager should rent one of the empty rooms only if a customer is willing to pay

To say that government intervenes in the economy to promote efficiency is to say that government is attempting to

For most students,the largest single cost of a college education is

During the early 1920s in Germany,prices

Economics deals primarily with the concept of

Which of the following is not generally regarded by economists as a legitimate reason for the government to intervene in a market?

Max and Maddy charge people to park on their lawn while attending a nearby craft fair.At the current price of $10,seven people park on their lawn.If they raise the price to $15,they know that only five people will want to park on their lawn.Whether they have seven or five cars parked on their lawn does not affect their costs.From this information it follows that

The term used to describe a situation in which markets do not allocate resources efficiently is

Almost all variation in living standards is attributable to differences in countries'

Scarcity means that there is less of a good or resource available than people wish to have.

In a particular country in 2000,the average worker needed to work 40 hours to produce 55 units of output.In that same country in 2008,the average worker needed to work 30 hours to produce 45 units of output.In that country,the productivity of the average worker

Which of the following principles is not one of the four principles of individual decisionmaking?

The term "productivity"

Which of the following firms is likely to have the greatest market power?

Senator Brown wants to increase taxes on people with high incomes and use the money to help the poor.Senator Johnson argues that such a tax will discourage successful people from working and will therefore make society worse off.An economist would say that

One effect of the government-imposed seat belt law in the U.S.has been

Suppose the state of Massachusetts passes a law that increases the tax on alcoholic beverages.As a result,residents in Massachusetts start purchasing their alcohol in surrounding states.Which of the following principles does this best illustrate?

The invisible hand ensures that economic prosperity is distributed equally.

In the early 1920s,

Shane receives $100 as a birthday gift.In deciding how to spend the money,he narrows his options down to four choices: Option A,Option B,Option C,and Option D.Each option costs $100.Finally he decides on Option B.The opportunity cost of this decision is