Exam 1: First Principles

According to economic models of trade, when the United States and Mexico trade:

For which decision would marginal analysis be MOST relevant?

The study of economics arises because of the necessity of choice, and the necessity of choice arises because of the fundamental problem of scarcity of resources.

We have to make choices because:

Owen had a typewriter shop, but he went out of business because no one buys typewriters anymore. Which economic principle does this statement BEST represent?

While buying refreshments for an upcoming party, you notice that a six-pack of Americana Beer costs $2 and a six-pack of Bavarian Beer costs $4. You buy the six-pack of Bavarian Beer, although you wonder if maybe two six-packs of Americana Beer would have been a better choice. The opportunity cost of the Bavarian Beer is:

We are forced to make choices because of:

During the Great Depression, consumers and producers in the United States dramatically reduced their spending relative to the quantity of goods and services available at the time. Which economic principle does this statement BEST represent?

A central and fundamental theme in economics is that:

How people choose among the alternatives available to them is:

Because one person's spending is another person's income:

Trade theoretically allows people to get more of what they want.

Your neighbor is mowing her yard one afternoon when she stops to have some lemonade. She drinks one glass and is now deciding whether or not to have a second glass. This is an example of _____ analysis.

I know when I shop at the local grocery store, I am helping my community. Which economic principle does this statement BEST represent?

A friend comes up to you and offers you a free ticket to a professional baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game?

Handicapped-designated parking spaces are an example of the market economy achieving efficiency.

It is cheaper to produce corn in Kansas than in Death Valley, California, because corn needs a lot of water and moderate temperatures. Which economic concept does this statement BEST represent?

Which statement is NOT one of the four principles of individual choice?

Although freshwater is very abundant in most places, it is scarce because:

Which principle underlies the interaction of individual choices?