Exam 1: Ten Principles of Economics: How People Interact

The "invisible hand" works to promote general well-being in the economy primarily through

Market failure can be caused by

When the government prevents prices from adjusting naturally to supply and demand,

Laws that restrict the smoking of cigarettes in public places are examples of government intervention that is intended to reduce

Which of the following statements does not apply to a market economy?

Which of the following firms is most likely to have market power?

Dale is a guitar teacher and Terrence is a tile layer.If Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor,

Which of these activities will most likely result in an external benefit?

The principle that trade can make everyone better off applies to

If an electric power plant does not bear the entire cost of the pollution it emits,it will

The term market failure refers to

To say that government intervenes in the economy to promote equality is to say that government is aiming to

If Switzerland chooses to engage in trade,it

When the "invisible hand" guides economic activity,prices of products reflect

Trade between the United States and Guatemala

The price of diamonds is high,in part because the majority of the world's diamonds are controlled by a single firm.This is an example of

In a market economy,economic activity is guided by

The term "market failure"

For which of the following problems can well-designed public policy enhance economic efficiency?

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