practice problems ch. 1 micro-econ

Ch. 1 -117. An example of an externality is the impact of pollution from a factory on the health of people in the vicinity of the factory.
true
Ch. 1 – 137. The income of a typical worker in a country is most closely linked to productivity.
true
Ch. 1 -10. Approximately 75 percentage of the world’s economies experience scarcity.
False
Ch. 1 -16. Economics is the study of how society manages its scarce resources.
True
Ch. 1 -17. In most societies, resources are allocated by a single central planner.
False

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Ch. 1 -22. Economists use the phrase “There is no such thing as a free lunch,” to illustrate how inflation increases prices.
False
Ch. 1 -25. Henry decides to spend two hours playing golf rather than working at his job which pays $8 per hour. Henry’s tradeoff is nothing, because he enjoys playing golf more than working.
False
Ch. 1 -32. Efficiency refers to the size of the economic pie; equity refers to how the pie is divided.
True
Ch. 1 -37. When government policies such as the welfare system try to help the most needy members of society, it increases the productivity of the needy in the society.
False
Ch. 1 -41. When the government redistributes income from the rich to the poor, people work less and produce fewer goods and services.
True
Ch. 1 -42. In economics, the cost of something is the dollar amount of obtaining it.
False
Ch. 1 -44. The opportunity cost of going to college is the value of the best opportunity a student gives up to attend college.
True
Ch. 1 -45. For most students, the largest single cost of a college education is the wages given up to attend school.
True
Ch. 1 -48. Mallory decides to spend 3 hours working overtime rather than watching a video with her friends. She earns $8 an hour. Her opportunity cost of working is the $24 she earns working.
False
Ch. 1 -49. Russell spends an hour studying instead of playing tennis. The opportunity cost to him of studying is the enjoyment and exercise he would have received had he played tennis.
True
Ch. 1 -51. People make decisions at the margin by following tradition.
False
Ch. 1 -58. After much consideration, you have chosen Cancun over Ft. Lauderdale for your Spring Break trip this year. For this decision to change, the marginal benefit of Cancun must increase.
False
Ch. 1 -60. A rational decision maker takes an action only if the marginal benefit is less than the marginal cost.
False
Ch. 1 -72. Suppose your management professor has been offered a corporate job with a 30% pay increase. He has decided to take the job. For him, the marginal cost of leaving was greater than the marginal benefit.
False
Ch. 1 -89. Prices direct economic activity in a market economy by reducing scarcity of the goods and services produced.
False
Ch. 1 -91. An example of market power is a fast food restaurant in a college town.
False
Ch. 1 -92. An example of a firm with market power is a cable TV provider in St. Louis.
true
Ch. 1 -99. The “invisible hand” directs economic activity through advertising.
False
Ch. 1 -102. Both The Wealth of Nations and the Declaration of Independence share the point of view that individuals are best left to their own devices without the government guiding their actions.
true
Ch. 1 -105. A primary function of prices in a market economy is to provide participants with spending limits.
false
Ch. 1 -114. Causes of market failure include externalities and market power.
true
Ch. 1 – 116. An externality is the impact of a person’s actions on that person’s well-being.
false
Ch. 1 -117. An example of an externality is the impact of pollution from a factory on the health of people in the vicinity of the factory.
true
Ch. 1 – 137. The income of a typical worker in a country is most closely linked to productivity.
true
Ch. 1 -149. If the government wanted to enact a policy to increase living standards in the country, it might allow corporate tax write-offs for money spent on worker safety.
false
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