Exam 1: Ten Principles of Economics

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

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

Based on the available evidence, which of the following groups benefits most from mandatory seat belt laws?

Rick buys a 1966 Mustang for $3,000, planning to restore and sell the car. He goes on to spend $9,000 restoring the car. At this point he can sell the car for $10,000. As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $13,000. Rick should

A marginal change is a

If the rent for apartments in New York City were fixed below the current price, then we would expect

Economics is the study of how evenly goods and services are distributed within society.

Resources are

A marginal change is a small incremental adjustment to an existing plan of action.

Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

The word "economy" comes from the Greek word oikonomos, which means

Incomes of U.S. households in the 1970s and 1980s

A rational decision maker takes an action only if the

Catherine 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 Catherine purchased. As a result of the city's announced plan, Catherine 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

Market power and externalities are two possible causes of market failure.

Which of the following products would be considered scarce?

The "invisible hand" directs economic activity through

The primary determinant of a country's standard of living is

The increase in living standards of American workers over the past century is primarily due to

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.