BUSA 201 exam 1- PQ 1
According to economists, when the FDA raises the approval requirements for new drugs
society potantially loses a new drug approval
The real power of trade lies in people's ability to
specialize and increase production
The statement "john buys more good X as his income increases, ceteris paribus", means
John's income is the only influence that is being allowed to change
In a ____________, most economic decisions about what to produce, how to produce it, and for whome the produce it are make by buyers and sellers.
Market- oriented economy
Suppose your teacher finishes class 30 minutes early on the day before an exam. She indicates that you may leave, or you may stay on for an optional study period that will last for the remaining 30 minutes of the scheduled class time. You should:
Only choose to stay if the benefits gained from the extra study session exceed the cost of another 30 minutes in class
"after every fall election, the weather starts to turn cold, therefor elections cause cold weather". This statement
fails to recognize the association is not causation
Booms and busts refer to the:
fluctuations in economic activity over time
When markets don't align self- interest with social interest:
governments may improve the situation by changing incentives
Economics is primarily the study of
how individuals make choices because of scarcity
An increase in the general price level is
inflation
The statement, "Violent crime has decreased in the last five years,"
is positive because it can be tested
Because information is costly to acquire,
people will rationally choose not to become fully informed when making decisions
Amoung the most powerful institutions for supporting good incentives are:
property rights
"If Tom had twice as much money, he could consume twice and much. If everyone had twice and much money, they could consume twice as much". This illustrates
the fallacy of composition
What is the "invisible hand"?
the idea that people pursuing their own self interest actually benefit the public at large
The opportunity cost of a choice is
the value of opportunities lost
Everyday people rely on the work of others to provide us with food, clothing, and shelter. These people work for out benefit because:
they benefit by doing so
You must decide whether to attend class tomorrow morning or take your friend to the airport. Your decision highlights the following "big idea" in economics
trade offs are everywhere