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| are scarce for households and scarce for economies |
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| approximately what percentage of the world's economies experience scarcity? |
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| economics is the study of |
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| how society manages its scarce resources |
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| in most societies resources are allocated by |
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| the combined actions of millions of households and firms |
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| the adage "there is no such thing as a free lunch." is used to illustrate the principle that |
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| which of the following is true |
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| efficiency refers to the size of the economic pie: equity refers to how the pie is divided |
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| Senator Smith wants to increase taxes on people with high incomes and use the money to help the poor. Senator Jones argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say that |
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| a good decision requires that we recognize both viewpoints. |
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| in economics the cost of something is |
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| what you give up to get it |
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| when you calculate your true costs of going to college, what portion of your room adn board expenses should be included? |
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You should include only the amount by which your room-and-board expenses exceed the
expenses for rent and food if you were not in college |
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Term
| A marginal change is best illustrated by which of the following? |
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Definition
| Arizona, which usually receives 10 inches of rain per year, received 11 inches last year. |
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| Teresa eats three oranges during a particular day. The marginal benefit she enjoys from eating the third orange |
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Definition
can be thought of as the total benefit Teresa enjoys by eating three oranges minus the
total benefit she would have enjoyed by eating just the first two oranges. |
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| Sarah buys and sells real estate. Two weeks ago, she paid $140,000 for a house on Oak Street, intending to spend $20,000 on repairs sell the house for $175,000. Last week, the city government announced a plan to build a “halfway house” for convicted criminals on Oak Street. As a result of the city’s announced plan, Sarah is weighing two alternatives: She can go ahead with the $20,000 in repairs and then sell the house for $135,000, or she can forgo the repairs and sell the house as it is for $120,000. Sarah should |
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Definition
| c. forgo the repairs and sell the house as it is for $120,000. |
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| Which is the most accurate statement about trade? |
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Definition
| Trade can make every nation better off. |
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| which of the following statements about trade is false? |
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| with trade, one country wins and one country loses |
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| which of the following firms is most likely to have market power? |
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| the last gas station in new mexico for 100 miles |
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| which of the following statements best characterized a basic difference between market economies and centrally-planned economies? |
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Definition
none of the above are correct...
Society relies more upon prices to allocate resources when the economy is
centrally-planned than when it is market-based. b. The self-interest of households is reflected more fully in the outcome of a
centrally-planned economy than in the outcome of a market economy. c. Government plays a larger role in the economic affairs of a market economy than in the
economic affairs of a centrally-planned economy. |
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| prior to collapse of communism, communist countries worked on the premise that economic well-being could be best attained by |
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Definition
| the actions of government central planners |
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| adam smith argued that in argued that ina market system, when people act in their own self-interest, they typically |
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Definition
| help others even more than when they deliberately try to help others |
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| when the invisible hand guides economic activity, prices of products reflect |
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Definition
| both the values that society of places on those products and the costs to society of producing those products |
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| A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company. This instance serves as an example of |
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Definition
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| a rationale for government involvement in a market economy is as follows |
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Definition
All of the above are correct....
Markets sometimes fail to produce a fair distribution of economic well-being. b. Markets sometimes fail to produce an efficient allocation of resources. c. Property rights have to be enforced. |
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| An example of an externality is the impact of |
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Definition
| pollution from a foctory on the health of people in the vicinity of the factory |
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| laws that restrict the smoking of cigarettes in public places are examples of government intervention that is intended to reduce |
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Definition
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| if education produces external benefits for society, which of the following might NOT be an appropiate policy for society to adopt regarding education? |
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| programs which promote the hiring of high school dropouts |
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| the basic principles of economics imply that policymakers should |
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Definition
| rely on markets to guide economic activity, except when markets produce inefficient or inequitable outcomew |
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