Exam 1: First Principles

Which of the following principles underlies the interaction of individual choices?

When the nations that constitute the Organization of Petroleum Exporting Countries (OPEC) restrict the supply of oil to increase their profits, the oil market:

If the state government allocates additional spending on education, the opportunity cost is:

Beth promises to do Alice's taxes, and in exchange, Alice will set up several spreadsheets for Beth's household budget. This trade will most likely:

It is cheaper to produce corn in Kansas than in Death Valley, California, because corn needs a lot of water and moderate temperatures. This statement best represents this economic concept:

One consequence of equilibrium is that when trying to figure out which checkout line at the college bookstore is the fastest, one should choose:

The government of a small town has decided to ban smoking in all restaurants, stores, and government offices. This is an example of the principle that:

Which of the following can best be considered to be a resource used in the production of computers?

Everyone benefits from street lighting, yet the marginal benefit to any one individual usually falls short of the marginal cost. This is an example of:

Specialization in production was the starting point for:

The trade-off between equity and efficiency occurs because:

Marginal analysis:

People who live in large cities decide to spend less in their day-to-day activities. This will most likely lead to:

You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is:

You are planning to study eight hours this week for your economics final and are considering studying a ninth hour. You should:

When a chef prepares a dinner for a customer, which of the following is physical capital?

An apartment complex included a fixed price of water in the monthly rent. One day the city decided to attach a water meter to each individual apartment and charge the tenant for actual water usage. As a result, water usage in the apartment complex went way down. Explain this situation using a principle of economics.

During the Great Depression, consumers and producers in the United States dramatically reduced their spending as compared to the quantity of goods and services available at the time. This statement best represents this economic concept:

A choice made _____ is a choice whether to do a little more or a little less of something.

One day, Martha wakes up and in frustration yells, "Decisions, decisions, decisions! Why do I have to make decisions about everything?" Martha's frustrations stem from the fact that: