chapter 1 - Name: _ Date: _ 1. To encourage young people to...

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Name: __________________________ Date: _____________ 1. To encourage young people to go to college within their home state, state universities can: A) charge higher tuition to in-state students. B) award special scholarships to out-of-state students. C) offer high-interest loans to in-state students. D) offer lower tuition to in-state students. 2. Your elderly grandma tells you: “I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost.” Your grandma does not understand the concept of: A) scarcity in economics. B) efficiency in economics. C) opportunity cost in economics. D) marginal analysis in economics. 3. Economists make predictions about individual behavior based on the assumption that people exploit opportunities to make themselves better off. The fact that different individuals make different choices when confronted with the same situation implies that this assumption is often violated. A) True B) False 4. Which of the following methods of reducing pollution is likely to be most effective? A) appealing to the polluter to “be a good citizen” B) publicizing the harmful effects of pollution C) imposing a tax per unit of pollution generated D) All three methods are equally effective. Page 1
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5. When individuals act in their own self-interest: A) efficiency is always achieved. B) equity is always achieved. C) society may be worse off, in some cases. D) all opportunities have been taken to make some people better off without making other people worse off. 6. For an economist, the cost of something is: A) the amount of money you paid for it. B) what you gave up to get it. C) always equal to its market value. D)
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chapter 1 - Name: _ Date: _ 1. To encourage young people to...

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