ECON 2113 - HW 1
If the United States decides to trade with Mexico, we know that...
Mexico and the United States can both benefit.
According to a recent study of Chilean bus drivers, drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour. This result is an example of which principle of economics?
People respond to incentives.
When calculating the cost of college, which of the following should you probably not include?
The cost of rent for your off-campus apartment.
The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as...
an externality.
Inflation is defined as...
an increase in the overall level of prices in the economy.
Equality describes a situation in which...
each member of society has the same income.
Central planning refers to...
government guiding economic activity. Today many countries that had this system have abandoned it.
Economics is the study of...
how society manages its scarce resources.
The term used to describe a situation in which markets do not allocate resources efficiently is...
market failure.
When a single person (or small group) has the ability to influence market prices, there is...
market power.
"There is no such thing as a free lunch," means...
people face tradeoffs.
When the government redistributes income from the wealthy to the poor, ...
people work less and produce fewer goods and services.
The "invisible hand" directs economic activity through...
prices
The overriding reason why households and societies face many decisions is that...
resources are scarce.
Efficiency means that...
society is getting the maximum benefits from its scarce resources.
Trade allows...
specialization, which reduces costs.
In most societies, resources are allocated by...
the combined actions of millions of households and firms.
Denise decides to spend three hours working overtime rather than watching a video with her friends. She earns $10 an hour. Her opportunity cost of working is...
the enjoyment she would have received had she watched the video.
The historical rise in living standards of American workers is primarily a result of...
the rise in American productivity.
The marginal benefit Claire gets from purchasing a third pair of flip-flops is...
the total benefit Claire gets from purchasing three pairs of flip-flops minus the total benefit she gets from purchasing two pairs of flip-flops.
The opportunity cost of an item is...
what you give up to get that item.