Exam 1: Ten Principles of Economics

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

Consider Noah's decision to go to college. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. If he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. Noah's cost of going to college is

What are the two reasons for the government to intervene in a market?

An increase in the marginal cost of an activity necessarily means that people will no longer engage in any of that activity.

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

Which of the following statements about trade is false?

Economics is the study of how society manages its

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

The principle that "people face tradeoffs" applies to

When calculating the cost of college, which of the following should you probably include?

College-age athletes who drop out of college to play professional sports

Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of

If Switzerland chooses to engage in trade, it

Efficiency means everyone in the economy should receive an equal share of the goods and services produced.

In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker

When calculating the cost of college, which of the following should you probably not include?

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

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

Prices direct economic activity in a market economy by

Which of the following is a decision that economists study?