Exam 1: Ten Principles of Economics

Economists use the term to refer to an increase in the overall level of prices in the economy.

The U.S. president who referred to inflation as "public enemy number one" was

When a single person or small group) has the ability to influence market prices, there is

The "invisible hand" refers to

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?

The self-interest of the participants in an economy is guided into promoting general economic self-interest by

Which of the following is not an example of scarcity?

When the "invisible hand" guides economic activity, prices of products reflect

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

Define opportunity cost. What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

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

An example of a firm with market power is a

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

Consider Mandy's decision to go to college. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. If she does not go to college, she will earn $18,000 working in a store and spend $8,000 on room and board. Mandy's cost of going to college is

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

Market failure can be caused by

Use the following Scenario to answer the question 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 company's marginal cost?

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

Barb's aunt gave her $100 for her birthday with the condition that Barb buy herself something. In deciding how to spend the money, Barb narrows her options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally she decides on Option B. The opportunity cost of this decision is

The income of a typical worker in a country is most closely linked to which of the following?