Chapter 1-2 (Practice Question)

Chapter 1-2 (Practice Question) - Chapter 1Ten Principles...

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Chapter 1—Ten Principles of Economics 1. The word economy comes from the Greek word for a. "environment." b. "one who manages a household." c. "one who participates in a market." d. "conservation." 2. Economics is the study of a. how society manages its scarce resources. b. the government's role in society. c. how a market system functions. d. how to increase production. 3. A tradeoff exists between a clean environment and a higher level of income in that a. studies show that individuals with higher levels of income actually pollute less than low- income individuals. b. to pay for pollution clean-up, the government must increase taxes which lowers income. c. laws that reduce pollution raise costs of production and reduce incomes. d. by employing individuals to clean up pollution, employment and income both rise. 4. In economics, the cost of something is a. the dollar amount of obtaining it. b. always measured in units of time given up to get it. c. what you give up to get it. d. usually higher than people think it will be. 5. A marginal change is a a. long-term trend. b. large, significant adjustment. c. change for the worse, and so is usually short-term. d. small incremental adjustment. 6. Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $10,000 and that he can sell it for $13,000. When he has spent $10,000, he discovers he needs to replace the engine, which will cost $4,000. He can sell the car without the new engine for $9,000. Stan should a. complete the repairs and sell the car for $13,000. b.
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Chapter 1-2 (Practice Question) - Chapter 1Ten Principles...

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