Exam 1: Ten Principles of Economics: Part A

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What are the two short-run effects of increasing the quantity of nation's money?

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Question 21

Scenario 1-1 You have the afternoon free.You have a choice between going to the movies with a friend or studying economics for three hours.If you go to the movies,you will spend $8.00 on a ticket and $4.50 on popcorn.If you choose to study economics for three hours,you will raise your exam grade by 10 points. -Refer to Scenario 1-1.What is your opportunity cost of studying economics?

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Question 22

What is the main difference between a centrally planned economy and a market economy?

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Question 23

What are the two basic types of economies?

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Question 24

Invisible hand is a term used by the economist ------ to describe how the decisions of households and firms lead to desirable market outcomes.

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Question 25

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?

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Question 26

Scenario 1-5 Suppose that you have a choice between going to the movies with a friend for three hours or working at your job.If you go to the movies,you will spend $12 on a ticket and $6 on popcorn.If you choose to work,you will earn $10 an hour. -Refer to Scenario 1-5.What is your opportunity cost of working?

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Question 27

Economists use the term ------ to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

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Question 28

Give an example of government intervention that is intended to reduce an externality.

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Question 29

Suppose that in Germany total annual output is worth $600 million and people work 40 million hours.In France total annual output is worth $700 million and people work 50 million hours.In which country do people enjoy a higher standard of living?

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Question 30

What are the two possible causes of market failure?

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Question 31

In a centrally-planned economy,economic activity is guided by ------.

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Question 32

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors.The company's cost will be $30,070 if it produces an additional heart rate monitor.The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6.A customer is willing to pay $60 for the 601^st heart rate monitor.Should the company produce and sell it? Explain.

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Question 33

Give an example of a trade-off faced by society.

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Question 34

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators.The company's cost will be $35,070 if it produces an additional graphing calculator.The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3.A customer is willing to pay $60 for the 701^th calculator.Should the company produce and sell it? Explain.

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Question 35

Scenario 1-4 You have the afternoon free.You have a choice between going to the movies with a friend or studying economics for three hours.If you go to the movies,you will spend $12.00 on a ticket and $4.75 on popcorn.If you choose to study economics for three hours,you will raise your exam grade by 15 points. -Refer to Scenario 1-4.What is your opportunity cost of going to the movies?

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Question 36

Scenario 1-6 It costs a company $30,000 to produce 600 heart rate monitors.The company's cost will be $30,070 if it produces an additional heart rate monitor.The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6.What is the minimum price that would induce this company to produce the 601^st heart rate monitor?

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Question 37

What is another word for "marginal"?

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Question 38

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

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Question 39

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

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Question 40

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Exam 1: Ten Principles of Economics: Part A

What are the two short-run effects of increasing the quantity of nation's money?

What is the main difference between a centrally planned economy and a market economy?

What are the two basic types of economies?

Invisible hand is a term used by the economist ------ to describe how the decisions of households and firms lead to desirable market outcomes.

Economists use the term ------ to refer to a situation in which the market on its own fails to produce an efficient allocation of resources.

Give an example of government intervention that is intended to reduce an externality.

Suppose that in Germany total annual output is worth $600 million and people work 40 million hours.In France total annual output is worth $700 million and people work 50 million hours.In which country do people enjoy a higher standard of living?

What are the two possible causes of market failure?

In a centrally-planned economy,economic activity is guided by ------.

Give an example of a trade-off faced by society.

What is another word for "marginal"?

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

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Measuring a Nations Income: The Economy's Income and Expenditure

Measuring a Nations Income: The Measurement of GDP

Measuring a Nations Income: The Components of GDP

Measuring a Nations Income: Real Versus Nominal GDP

Measuring a Nations Income: Is GDP a Good Measure of Economic Well-Being