Topic 1: Ten Principles of Economics

Economics is best defined as the study of

• how to predict inflation, unemployment, and stock prices

• how to run a business most profitably

• how society manages its scarce resources

• how the government can stop the harm from unchecked self-interest.

Your opportunity cost of going to a movie is

• the price of the ticket.

• the price of the ticket plus the cost of any soda and popcorn you buy at the theater

• the total cash expenditure needed to go to the movie plus the value of your time

• zero, as long as you enjoy the movie and consider it a worthwhile use of time and money.

A marginal change is one that

• incrementally alters an existing plan.

• is not important for public policy

• makes an outcome inefficient

• does not influence incentives.

Because people respond to incentives,

• policymakers can alter outcomes by changing punishments or rewards

• policies can have unintended consequences

• society faces a trade-off between efficiency and equality

• All of the above.

UNKLAB's President (Rektor)

• Benny Lule

• Danny Rantung

• Denny Sumajouw

• Elvis Sumanti

International trade benefits a nation when

• no domestic jobs are lost because of trade.

• all nations are specializing in producing what they do best.

• its trading partners experience reduced economic well-being

• its revenue from selling abroad exceeds its outlays from buying abroad.

Adam Smith’s “invisible hand” refers to

• the subtle and often hidden methods that businesses use to profit at consumers’ expense

• the ability of free markets to reach desirable outcomes, despite the self-interest of market participants

• the ability of government regulation to benefit consumers even if the consumers are unaware of the regulations

• the way in which producers or consumers in unregulated markets impose costs on innocent bystanders.

Governments may intervene in a market economy in order to

• protect property rights

• correct a market failure due to externalities

• achieve a more equal distribution of income.

• All of the above.

Kaprodi Manajemen

• Tutiek Wulyatiningsih

• Abraham Lelengboto

• Indrajit

• Tonny Soewignyo

The main reason that some nations have higher average living standards than others is that

• the richer nations have exploited the poorer ones

• the central banks of some nations have created more money.

• some nations have stronger laws protecting worker rights

• some nations have higher levels of productivity