Exam 1: Five Foundations of Economics

In 2009,the federal government created a program called Cash for Clunkers whereby consumers could trade in a less efficient car for a more efficient car and receive a higher value than they would have otherwise.How would an economist understand the decision that consumers faced?

Which of the following is a microeconomic question?

Thomas Malthus's prediction of mass starvation failed to come true because of increases in

Because of scarcity

The U.S.federal government offers homeowners a tax deduction for their home loan interest payments.This reduction in taxes serves as a(n)________ incentive to buy a house.

If specialization and outsourcing can harm domestic workers,why do countries still engage in trade?

What is meant when one says that decisions are made at the margin? Provide an example of making a decision at the margin.

Trade makes costs of goods and services

A health insurance company may offer its policyholders a discount on their premiums if they prove that they have stopped smoking.What type of incentive is the health insurance company offering?

When a ticket is given to a pedestrian for jaywalking,what type of incentive exists?

What is the opportunity cost of taking an exam?

When the Federal Reserve,the entity that manages money and banking in the United States,announces changes in the supply of money it makes available to banks,it often causes a significant response in financial markets.Based on an understanding of incentives,why is this not surprising?

According to economists,one reason few professional athletes have PhD's is that the

If the United States creates a trade agreement with Vietnam,we know that

The patent system

Trade-offs occur in all of the following scenarios EXCEPT

The basic goal of economics is to

The government has been trying to mint dollar coins instead of printing paper dollar bills,but people have been reluctant to use coins instead of paper bills.How would an economist explain this reluctance?

The opportunity cost of working rather than going to school is

Economics professors are well aware of the importance of incentives.Which of the following situations shows the use of a positive incentive?