Exam 1: Ten Lessons From Economics

Scarcity means that society has less to offer than people wish to have.

Domestic fishers in South-East Asia use small boats and nets while in New Zealand, fishers use large powered boats with modern navigation devices and large nets. New Zealand fishers earn more money. The difference in the incomes of the two groups of fishers is because:

The word 'economy' comes from the Latin word for 'production'.

One explanation of the trade-off between inflation and unemployment is that:

Whenever a person gives up one resource to obtain an item is called:

In a market economy:

Compulsory seatbelt laws in Australia have resulted in:

If the average income of an Australian is higher than the average income of an New Zealander, it is most likely because:

Which of the following is important for policymakers to consider when designing public policy?

Suppose that the government enforces a law which prohibits the creation of any pollution. What effect do you think the enforcement of this law will have on the wellbeing of society?

The scarcity problem:

The Phillips curve shows that at least in the short term, reductions in the inflation rate must be accompanied by increases in unemployment.

The trade-off between inflation and unemployment is demonstrated by the:

Trade makes rich nations richer and poor nations poorer.

A rational decision maker takes an action only if the marginal cost exceeds the marginal benefit.

If each person pursues their own self-interest through a market-institution, the resulting chaos would cause the market to collapse.

Equity means that everyone in the economy should receive an equal share of the goods and services produced.

A market economy rewards people according to:

Which of the following is NOT included in the decisions that every society must make?

The opportunity cost of an item is: