Econ 1000 Fall 2023 Questions and Answers
The Incentive Principle states that... Answer - a society can produce a greater amount of total output when individuals focus their production on those activities for which they have a comparative advantage.
In 2015 High School graduates earned $11,037...
The Incentive Principle states that... Answer - a society can produce a greater amount of total output
when individuals focus their production on those activities for which they have a comparative advantage.
In 2015 High School graduates earned $11,037 per year more than non-High School graduates. If this
difference had instead been $8,500 per year, then we would expect Answer - more people to drop out
of school before graduating High School.
Consider the following two statements. Statement 1: "The U.S. should restrict employers from
outsourcing work to foreign countries." Statement 2: "A ceiling on rents reduces the quantity and quality
of available housing." Most economists would Answer - agree with Statement 2, but disagree with
Statement 1.
Economics is Answer - the social science that studies decision making in the face of scarcity and the
resulting impact of such decisions on both society as a whole and on the individual members therein
In July 2012 professional golfer Adam Scott bogeyed the last four holes of the British Open to lose the
tournament to Ernie Els by one stroke. Around the same time flooding in Beijing, China resulted in the
death of at least 77 people. If Adam was more upset about the outcome of the British Open than about
the loss of life from the flooding in Beijing, then it would seemingly suggest that he Answer - is a self-
interested individual.
John recently saw the comedian Ron White perform at the Topeka Performing Arts Center in Topeka, KS.
His Total Benefits from seeing this show were $120, while his Total Costs were $70. From this
information, it follows that his Economic Surplus Answer - from attending the show was ($120)-($70) =
($50).
Normative Statements Answer - are supported (either implicitly or explicitly) by the priorities, goals, and
value judgments of the person making the statement.
A "Rational Decision Maker" should Answer - take an action if and only if the Marginal Benefit of the
action is at least as great as the Marginal Cost of the action.
, The quote on page 17 of the course textbook suggests that Milton Friedman believed that Mother
Theresa was Answer - rational and self-interested.
Total Benefits (i.e., Total Benefits, not Total Economic Surplus) are maximized at Answer - Q5
If the decision maker increased the amount which she was engaging in the activity from
3 Q to 4 Q , then Answer - Total Costs, Total Benefits, and Total Economic Surplus would all increase.
Which of the following statements is a "Positive Statement"? Answer - Elvis Presley died on August 16,
1977.
The Cost-Benefit Principle states that Answer - a person should take an action if and only if the
additional benefit of doing so is greater than or equal to the additional cost of doing so.
Mike Ditka's suggestion that football related injuries could likely be reduced by have participants play
without helmets (or at least without facemasks on their helmets) Answer - relies heavily upon the
Incentive Principle.
Andrea has $75 to spend and wants to purchase either a new amplifier for her guitar or a new MP3
player. Each good costs exactly $75, so she can only purchase one of the two items. This scenario
illustrates the basic concept that Answer - people face tradeoffs.
Armen Alchain and Gordon Tullock Answer - argued that automobile accident rates could be decreased
by installing a sharp, irremovable, foot long, iron spike to the steering wheel of every car.
Paula enjoys going to the movies. In July she saw 8 movies in the theatre. Her Marginal Benefit of the 8th
movie was $16, while her Marginal Cost of the 8th movie was $12. Based upon this information alone,
her Economic Surplus Answer - would have been smaller if she had instead gone to the movies 7 times.
____________ is the branch of economics which studies how individual decision-makers behave and
interact with each other, often with a focus on how households and firms behave and interact with each
other in markets. Answer - Microeconomics
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