Exam 1: Ten Principles of Economics

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

Which of the following is correct concerning opportunity cost?

Laws that restrict the smoking of cigarettes in public places are examples of government intervention that is intended to reduce

The "invisible hand" refers to

Cole is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Cole discovers that he needs to do an additional $200 worth of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should Cole do?

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four seats remain unsold. The bus company could increase its profit only if it

Which of the following is an example of an externality?

People are likely to respond to a policy change

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

Bill is restoring a car and has already spent $4,000 on the restoration. He expects to be able to sell the car for $6,200. Bill discovers that he needs to do an additional $2,400 of work to make the car worth $6,200 to potential buyers. He could also sell the car now, without completing the additional work, for $3,800. What should he do?

Which of these activities will most likely result in an external benefit?

If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75.

A rational decision maker takes an action only if the

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

Consider two countries, Muria and Zenya. In Muria total annual output is worth $800 million and people work 40 million hours. In Zenya total annual output is worth $900 million and people work 50 million hours. In which country is productivity higher?

Which of the following is the most correct statement about the relationship between inflation and unemployment?

The economy of the former Soviet Union is best described as a

Ralph Nader's book Unsafe at Any Speed caused Congress to require

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

To increase living standards, public policy should