Exam 1: First Principles

Market failure occurs when the pursuit of self-interest leads to bad results.

Equity means that:

Marginal analysis studies how individuals decide:

Intel finds it difficult to hire enough skilled computer engineers. This statement best represents this economic concept:

An economic situation is in equilibrium when no individual would be better off taking a different action.

Nara has gone to three movies this week. She has some extra money, so she decides to go to another. This statement best represents this economic concept:

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost of buying a burger is your enjoyment of the:

An economy is efficient if it is:

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:

Sometimes the government varies its spending, depending on the needs of the country. This statement best represents the economic concept that:

Which of the following statements is CORRECT?

A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:

For which of the following decisions would marginal analysis be MOST relevant?

As long as individuals know that they can find the goods and services they want in the market, they are willing to forgo being self-sufficient and are willing to specialize.

You notice that when a new yoga class is offered at the student recreation center at a highly desirable time, some students from the other yoga classes go to the new class instead. This statement best represents this economic concept:

Because people usually exploit opportunities to make themselves better off, to encourage young people to go to college in their home state, state universities can:

When a market is in equilibrium:

Equity is the same as efficiency.

In Colorado, there has been a drought, and rural communities are fighting with urban areas over water. This statement best represents this economic concept:

You decide whether to eat one more slice of pizza based on how hungry you feel. This statement best represents this economic concept: