Ten Principles of Economics

According to Principle 1: People Face Trade-offs, what is the primary reason that making decisions requires trading off one goal against another?

What classic trade-off is often used to illustrate the conflict between national defense spending and domestic spending?

When the government tries to cut the economic pie into more equal slices, what often happens to the size of the pie?

What is the opportunity cost of an item?

According to the textbook, what is often the largest single cost of a college education for most students?

What term do economists use to describe a small incremental adjustment to an existing plan of action?

An airline's cost to fly a 200-seat plane is 100,000 dollars. A standby passenger is willing to pay 300 dollars. According to the principle of marginal thinking, the airline should sell the ticket if:

What is something that induces a person to act, such as the prospect of a punishment or a reward?

According to the analysis of auto-safety laws on page 33, what is an unintended consequence of laws requiring seat belts?

What is the primary reason that trade between two countries can make each country better off?

What is the term for an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets?

What famous observation did economist Adam Smith make in his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations?

According to Principle 7, what is a primary reason that we need government in a market economy?

What is the term for a situation in which the market on its own fails to produce an efficient allocation of resources?

What is the primary determinant of the large variations in living standards among countries and over time?

In 2008, what was the approximate average income for an American, a Mexican, and a Nigerian, respectively?

What is the definition of inflation?

According to Principle 9, what is the primary culprit in almost all cases of large or persistent inflation?

In the historical example of Germany in the early 1920s, what was the relationship between the rate of price increases and the growth in the quantity of money?

According to Principle 10, society faces a short-run trade-off between which two economic outcomes?

The irregular and largely unpredictable fluctuations in economic activity, such as employment and production, are known as what?

What does the Greek word 'oikonomos,' the origin of the word 'economy,' mean?

What is the definition of scarcity?

Which of the following best defines 'efficiency' in an economic context?

What is the primary function of prices in a market economy?

Why do economists generally oppose policies like rent control?

The ability of a single economic actor (or small group) to have a substantial influence on market prices is called what?

What is defined as 'the quantity of goods and services produced from each unit of labor input'?

If the government doubles the tax on gasoline, can one be sure that the revenue from the gasoline tax will rise?

In the short run, what is the primary effect of a government policy that increases the amount of money in the economy?

What does the 'invisible hand' of the marketplace rely on to function correctly?

In the Case Study on gasoline prices, which of the following was NOT mentioned as a response to higher gas prices from 2005 to 2008?

What is the economic rationale for why water is cheap, while diamonds are expensive?

Historically, what has been the approximate annual growth rate of incomes in the United States, after adjusting for the cost of living?

What is the primary way policymakers can boost living standards?

The three main categories of economic principles discussed in the chapter are:

A government policy that increases the amount of money in the economy may lead to a short-run decrease in unemployment, but at the cost of what long-run effect?

What is the reason that families and nations both benefit from the ability to trade with one another?

The failure of communism is cited in the chapter as an example of the failure of which economic system?

An entertainment company will not produce DVDs if too many potential customers make illegal copies. This is an example of a market failure caused by inadequate protection of what?

When President Gerald Ford called inflation 'public enemy number one' during the 1970s, it was in response to what economic event?

The three broad reasons to study economics, as outlined in the preface, are to understand the world, to be a more astute economic participant, and to...

If a student can spend her time studying economics or psychology, what is the trade-off she faces for every hour she spends studying one subject?

What is the relationship between a nation's productivity and its standard of living?

According to the 'In the News' article 'Incentive Pay', how did paying bus drivers by the passenger instead of by the hour affect their behavior in Chile?

Which of the Ten Principles are grouped under the category 'How People Interact'?

The 'In the News' article on page 40, 'Why You Should Study Economics', uses the 'broken window fallacy' to illustrate what economic concept?

When economists study how the decisions of many individual households and firms interact in the marketplace, what are they studying?

The fact that policymakers can influence the combination of inflation and unemployment in the short run is an example of which principle?

In the summary table on page 44, 'Trade Can Make Everyone Better Off' is listed under which main heading?