Exam 1: Ten Principles of Economics

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by

Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit?

To improve living standards, policymakers should

Which of the following is true?

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

Scenario 1-2 Suppose that you have a choice between going to the movies with a friend for two hours or working at your job. If you go to the movies, you will spend $7 on a ticket and $5 on popcorn. If you choose to work, you will earn $10 an hour. -Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

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

A tax on gasoline is an incentive that encourages people to drive smaller more fuel-efficient cars.

Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

In the United States, incomes have historically grown

A rationale for government involvement in a market economy is

One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

Scenario 1-3 It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. -Refer to Scenario 1-3. What is the minimum price the company will charge for the 701th calculator?

When the government redistributes income from the wealthy to the poor,

In the short run, which of the following rates of growth in the money supply is likely to lead to the lowest level of unemployment in the economy?

Which of the following is a decision that economists study?

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Which of the following is the most correct statement about the relationship between inflation and unemployment?