Exam 1: Ten Principles of Economics: How People Interact

In an economy in which decisions are guided by prices and individual self-interest,there is

The term used to describe a situation in which markets do not allocate resources efficiently is

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

The ability of an individual to own and exercise control over scarce resources is called

According to Adam Smith,the success of decentralized market economies is primarily due to

Senator Bright,who understands economic principles,is trying to convince workers in her district that trade with other countries is beneficial.Senator Bright should argue that trade can be beneficial

If the government were to intervene and set the rent for apartments in New York City below the market rent,then we would expect,relative to the market outcome,

Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level.Which country can benefit?

Which of the following statements best characterizes a basic difference between market economies and centrally planned economies?

Benefits from trade would not include

If the government were to intervene in a market economy and fix the price of visiting a health care provider below the market price,then we would expect,relative to the market outcome,

One advantage market economies have over centrally-planned economies is that market economies

A company that formerly produced music CDs went out of business because too many potential customers bought illegally-produced copies of the CDs instead of buying the product directly from the company.This instance serves as an example of

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

Which of the following do economists not generally regard as a legitimate reason for the government to intervene in a market?

Which is the most accurate statement about trade?

Trade

Which of the following is a principle concerning how people interact?

If the government were to intervene and set a wage for unskilled labor above the market wage,then we would expect,relative to the market outcome,

Trade makes costs