Exam 1: Ten Principles of Economics

A) The cost of your meal plan for the cafeteria.
B) The cost of books required for college classes
C) The income you earn at your part-time joc.
D) The cost of living in the dormitory.

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A) unstable economic conditions in Eastern Europe.
B) increased competition from abroad.
C) a decline in the rate of increase in U.S. productivity.
D) a strong U.S. dollar abroad, hurting U.S. exports.

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A) an electric company
B) a farmer
C) a grocery store
D) a local electronics retailer

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A) families.
B) states within the United States.
C) nations.
D) All of the above are correct.

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A) Melissa needs to pay her rent and her electric bill.
B) Kevin must choose between buying a new flat screen television and buying his textbooks for this semester.
C) Robert must decide between studying for his psychology exam and working at his part-time joc.
D) Lisa can spend her money on a new smart phone or on a weekend trip.

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A) the improvement in his grades from studying for the hour.
B) the improvement in his grades from studying minus the enjoyment of watching TV.
C) the enjoyment he would have received if he had watched TV with his friends.
D) zero. Since Hamid chose to study rather than to watch TV, the value of studying must have been greater to him than the value of watching TV.

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A) is more efficient and more equal for society.
B) is more efficient but less equal for society.
C) is more equal but less efficient for society.
D) is less equal and less efficient for society.

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A) The money a student could have earned by working if he had not gone to college.
B) The nap a student could have enjoyed if he had not attended class.
C) The party a student could have enjoyed if he had not stayed in to study for his exam.
D) The money a student spends on rent for his apartment while attending school.

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To lower inflation, the government may c...

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A) relationship between unemployment and inflation.
B) irregular fluctuations in economic activity.
C) positive relationship between the quantity of money in an economy and inflation.
D) predictable changes in economic activity due to changes in government spending and taxes.

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A) In a market economy, no one is looking out for the economic well-being of society as a whole.
B) Market economies are characterized by decentralized decision making and self-interested decision makers.
C) Market economies have proven remarkably successful in promoting overall economic well-being.
D) All of the above are correct.

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A) reduce both competition and specialization.
B) reduce competition and increase specialization.
C) increase competition and reduce specialization.
D) increase both competition and specialization.

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A) Trade can make everyone better off.
B) Governments can sometimes improve market outcomes.
C) The cost of something is what you give up to get it.
D) All of the above are correct.

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A) an increase in the demand for goods and services.
B) lower unemployment in the short run.
C) higher inflation in the long run.
D) All of the above are correct.

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A) goods are scarce.
B) people face tradeoffs.
C) income must be earned.
D) households face many decisions.

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