Exam 1: Ten Principles of Economics

Trade makes costs

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

The invisible hand's ability to coordinate the decisions of the firms and households in the economy can be hindered by

For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%. Country B had inflation of 4% for many years, but very recently inflation unexpectedly rose to 9%. Other things the same, in which of the countries would the higher inflation rate be more likely to reduce unemployment?

Which of the following is correct?

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of

The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to

Senator Brown wants to increase taxes on people with high incomes and use the money to help the poor. Senator Johnson argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say that

Scenario 1-2 Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour. -Refer to Scenario 1-2. What is your opportunity cost of going to the movies?

Productivity is defined as the quantity of goods and services produced from each unit of labor input.

When society gets the most it can from its scarce resources, then the outcome is called

Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, and $7,000 on books. If he does not go to college, he will earn $22,000 working at a construction job and he will spend $11,000 on room and board. Paul's cost of going to college is

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Which of the following claims is consistent with the views of mainstream economists?

How does the study of economics depend upon the phenomenon of scarcity?

Under what conditions might government intervention in a market economy improve the economy's performance?

When government policies are enacted,

Which of the following products would be considered scarce?

The "invisible hand" refers to

If wages for accountants rose, then accountants' leisure time would have a lower opportunity cost.