Exam 1: The Big Ideas

For countries to be wealthy, they need lots of physical and human capital per worker, which, in turn, depends on a system of private property rights, political stability, a just legal system, honest government, and competitive and open markets.

Patterns of specialization and trade are explained by:

The average starting salary of economics majors is just behind that of:

In the market for pharmaceuticals, the issue of "drug lag" illustrates which of the following ideas?

You are given a ticket to a Bob Dylan concert with a face value of $50. You only value the ticket at $40, sell it to a friend for $40, and attend a U2 concert priced at $60. The opportunity cost of attending the U2 concert is:

Economists believe that people will not respond to nonmonetary incentives, like love or status.

Monetary and fiscal policies are among a government's tools for mitigating economic fluctuations.

Economists argue that self-interested people only respond to monetary incentives.

A person has a comparative advantage in activity X when that person's:

Each of the following ideas is central to economics, EXCEPT:

With careful planning, we can usually get something that we like without having to give up something else that we like.

Why do airlines sometimes advertise last-minute airline ticket sales at low prices? What economic principle are they applying?

What causes countries to become wealthier over time?

A cell phone plan costs $50 per month for 1,000 minutes, and $0.30 per minute for each additional minute after 1,000. What is the marginal fee for the 1,001st minute used?

Adam Smith wrote, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." He meant that:

If there was no ______, the "invisible hand" would not function as Adam Smith describes.

Suppose a customer at a restaurant is deciding whether or not to order dessert. Marginal thinking means that the customer should compare:

Economists Jevons, Menger, and Walras are credited with:

Milton Friedman argued that:

Which of the following helped the most to bring an end to malaria in the United States?