Exam 1: Ten Principles of Economics

In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

The tradeoff between inflation and unemployment

Government policies designed to equalize the distribution of economic well-being include (i) The welfare system (ii) Unemployment insurance (iii) Progressive income tax

When the government redistributes income from the wealthy to the poor,

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

One tradeoff society faces is between efficiency and equality. Define each term. If the U.S. government redistributes income from the rich to the poor, explain how this action affects equality as well as efficiency in the economy.

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

Market failure can be caused by

Which of the following can policy do?

Betty's Bakery bakes fresh bread every morning. Any bread not sold by the end of the day is thrown away. A loaf of bread costs Betty $2.00 to produce, and she prices loaves of bread at $3.50 per loaf. Suppose near the end of one day Betty still has 12 loaves of bread on hand. Which of the following is correct?

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

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

According to a recent study of Chilean bus drivers, drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour. If Chilean bus drivers are paid by the number of passengers they transport and Colombian bus drivers are paid by the hour, we can conclude that

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Which of the following is an example of something economists study?

Tuition is the single-largest cost of attending college for most students.

In the 1990s, inflation in the United States was