Exam 1: Ten Principles of Economics

Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's cost of going to college is

The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that

The amount of goods and services produced from each unit of labor input is called

Low rates of inflation are generally associated with

Market power and externalities are two possible causes of market failure.

A marginal change is a

Over the past century, the average income in the United States has risen about

Slow growth in US incomes during the 1970s and 1980s was primarily due to

In response to the deep economic downturn in the US in 2008 and 2009, the US

Which of these activities will most likely impose an external cost?

You go to the movieplex where movies ordinarily cost $9. You are intending to see a movie for which you have a $3 off coupon good for only that movie at that time. However, when you get there you see a friend who asks if you would rather see a new release. Both movies start and end at the same time. If you decide to see the new release with your friend, what is your opportunity cost?

Trade between the United States and Guatemala

Which is the most accurate statement about trade?

Debbie quits her job, which pays $30,000 a year, to finish her college degree. Her annual college expenses are $10,000 for tuition, $2,000 for books, and $700 for food. What is her opportunity cost of attending college for the year?

In the short run, which of the following is not correct?

In the short-run, society faces a tradeoff between inflation and unemployment.

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $40, the hotel manager should rent one of the empty rooms only if a customer is willing to pay

Tracy quits her job, which pays $25,000 a year, to finish her college degree. Her annual college expenses are $12,000 for tuition and fees and $1,000 for books. What is her opportunity cost of attending college for the year?

In the context of decisionmaking, the word "marginal" is most closely associated with the word