Exam 1: What Is Economics

In the 19th century, Russian peasants noticed that during cholera epidemics there were lots of doctors around; in an attempt to eliminate cholera, they killed all the doctors.This is an example of

The opportunity cost to you of an action is

Value judgments are based on people's tastes, preferences, and ethical opinions.

A theory is an explanation of the causal mechanism behind observed phenomena.

The government uses fiscal and monetary policy to mitigate the effects of economic fluctuations.

Suppose Tammy grew up on a farm and is very good at plowing.In addition suppose she is a popular country singer who earns $4,000 per performance.If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

Externalities are social costs that affect parties external to a particular economic transaction.

The steepness of a curve is partially determined by the units of measurement.

In the early 1800s, there was a smallpox outbreak in a remote part of Russia.The government sent in a large group of army doctors, but they were too late to stop the epidemic.Thirty years later, there was another smallpox scare.A local statistician cautioned the government against a similar response, noting the increased mortality and high number of army doctors during the earlier epidemic.Was the statistician providing good advice?

When variable A rises by 10 units, variable B rises by 15 units.The slope of the line describing this relationship is

The slope of a curved line at a particular point is

Economic theory simplifies relationships to explain how the relationships interact.

For the typical student, taking an introductory course in economics should

One of the consequences of allowing wages to fall in the United States has been growing wage inequality.

A large factory pours its toxic wastewater into a nearby river, and as a result, the residents of a downstream community experience high rates of illness and birth defects.The economic problem illustrated by this example is

To an economist, theory can be thought of as

Rent control is usually justified on the grounds that it protects moderate- to low-income families from the burden of rapidly rising rents and from eviction if they are unable to pay.It also prevents landlords from reaping windfalls as property values rise.Opponents note that rent controls usually lead to a reduced supply of rental housing and shortages.The proponents of rent controls support them primarily on the grounds of

If a government enacts a rent control to protect apartment tenants, the result is likely going to be

What is the "right" degree of abstraction necessary to analyze an economic problem?

Standby passengers on airlines who pay low rates for seats benefit from the low price.How are the airlines affected?