Exam 1: Ten Principles of Economics

The decisions of firms and households are guided by prices and self-interest in a

Economists use the word equality to describe a situation in which

Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred?

With the understanding that people respond to incentives, outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 9 months per year.

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?

Approximately what percentage of the world's economies experience scarcity?

Both the production of goods and services and the unemployment rate are used to measure

People are willing to pay more for a diamond than for a bottle of water because

Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing

You have eaten two bowls of ice cream at Sundae School Ice Cream store. You consider eating a third. As a rational consumer you should make your choice by comparing

Hamid spends an hour studying instead of watching TV with his friends. The opportunity cost to him of studying is

Yvette buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Yvette purchased. As a result of the city's announced plan, Yvette is weighing two alternatives: She can go ahead with the $50,000 in repairs and then sell the house for $290,000, or she can forgo the repairs and sell the house as it is for $250,000. She should

Prior to the collapse of communism, communist countries worked on the premise that economic well-being could be best attained by

A certain state legislature is considering an increase in the state gasoline tax. Representative Campbell argues that an increase in the gasoline tax would harm low-income drivers disproportionately. Representative Richards responds by saying that low-income drivers own smaller cars that use less gasoline, and that low-income drivers therefore would not be harmed disproportionately.

The "invisible hand" refers to

Suppose that in Brazil total annual output is worth $600 million and people work 30 million hours. In Peru total annual output is worth $800 million and people work 50 million hours. Productivity is higher

Ralph Nader's book Unsafe at Any Speed caused Congress to require

England can benefit from trade

In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers?