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Exam 1: Ten Principles of Economics

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Question 91

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In a particular country in 1999, the average worker had to work 20 hours to produce 55 units of output. In that same country in 2009, the average worker needed to work 28 hours to produce 77 units of output. In that country, the productivity of the average worker

A) increased by 2 percent between 1999 and 2009.
B) increased by 5 percent between 1999 and 2009.
C) remained unchanged between 1999 and 2009.
D) decreased by 3 percent between 1999 and 2009.

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Question 92

Multiple Choice

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Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level. Which country can benefit?

A) only the one with a low level of output per person.
B) only the one with a high level of output per person.
C) both
D) neither

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Question 93

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Inflation increases the value of money.

A marginal change is a small incremental adjustment to an existing plan of action.

It costs a furniture company $8,750 to produce 25 tables. The company's total cost will be $9,125 if it produces a 26th table. If the company produces 26 tables, then

To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change.

Use the following Scenario to answer the question scenario 1-6 : It costs a company $30,000 to produce 600 heart rate monitors. The company's cost will be $30,070 if it produces an additional heart rate monitor. The company is currently producing 600 heart rate monitors. -Refer to Scenario 1-6. What is the minimum price that would induce this company to produce the 601st heart rate monitor?

Economists are particularly adept at understanding that people respond to

For most students, the earnings they give up to attend college are

Which of the following statements about markets is most accurate?

Use the following Scenario to answer the question scenario 1-4 : You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points. -Refer to Scenario 1-4. What is your opportunity cost of going to the movies?

Trade with any nation can be mutually beneficial.

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. The marginal cost per room per night

Suppose one county in Missouri decides it wants to reduce alcohol consumption, so the county passes a law that raises the price of a bottle of beer by $1. As a result, people drive to other counties to drink alcohol, which results in an increase in drunk driving. This illustrates the principle that people respond to incentives.

Variations in the standard of living across countries are due almost entirely to differences in each nation's total output of goods and services.

Economists use the term to refer to fluctuations in economic activity, such as employment and production.

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

The opportunity cost of an item is