Exam 1: Ten Principles of Economics

Sophia is planning her activities for a hot summer day.She would like to go to the local swimming pool and see the latest blockbuster movie,but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity.This illustrates the basic principle that

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

One of the 20th century's worst episodes of inflation occurred in

Large or persistent inflation is almost always caused by

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

Communist countries worked under the premise that

An increase in the overall level of prices in an economy is referred to as

Pete receives $50 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 $50.Finally he decides on Option B.The opportunity cost of this decision is

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

Causes of market failure include

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

High-school athletes who skip college to become professional athletes

When calculating the cost of college,which of the following should you probably include?

The term market failure refers to

During the 1990s,the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation.A likely explanation of these facts is that

When a single person (or small group)has the ability to influence market prices,there is

Canada can benefit from trade

When calculating the cost of college,which of the following should you probably not include?

Market power and externalities are two possible causes of market failure.

A marginal change is a small incremental adjustment to an existing plan of action.