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The Six Principles

Total questions: 13

Worksheet time: 13mins

Name
Class
Date
1.

You only have 24 hours in a day.

a)

People must make choices because of scarcity

b)

Choices have costs

c)

People respond to incentives

d)

The rules influence incentives and therefore choice

e)

Voluntary Trade creates wealth

2.

The state of Ohio mines salt, an abundant natural resource in their state from below Lake Erie. Other states that do not have abundant resources of salt, buy the salt from Ohio to make their roads safe for winter. Ohio grows their economy and other states have safer roads. This best shows that:

a)

People must make choices because of scarcity

b)

Choices have costs

c)

People respond to incentives

d)

People respond to incentives

e)

Voluntary Trade creates wealth

3.

When the price of gasoline increases, people buy more fuel efficient cars because it will save money. Saving money is an example of:

a)

The important consequences of our choices lie in the future

b)

Voluntary Trade creates wealth

c)

The rules influence incentives and therefore choice

d)

People respond to incentives

e)

People must make choices because of scarcity

4.

The state of Wisconsin passes a law making drunk driving an offense punishable by the death penalty. Drunk driving rates decrease tremendously. The action of the legislature best shows that:

a)

People must make choices because of scarcity

b)

The rules influence incentives and therefore choice

c)

Voluntary Trade creates wealth

d)

The important consequences of our choices lie in the future

e)

Choices have costs

5.

Because you decide not to do the employment opportunity in Econ tonight, you cannot afford to buy brownies the next day.

a)

People must make choices because of scarcity

b)

Choices have costs

c)

People respond to incentives

d)

The rules influence incentives and therefore choice

e)

The important consequences of our choices lie in the future

6.

Because you decide not to do the employment opportunity in Econ tonight or any other night, you cannot afford to buy a grade at the end of the semester and do not graduate on time because you needed the credit. This makes it really tough for you to get a job after high school and years after you made that choice to not do your work in Econ you end up in a van... down by the river.

a)

The important consequences of our choices lie in the future

b)

Voluntary Trade creates wealth

c)

People respond to incentives

d)

People must make choices because of scarcity

e)

Choices have costs

7.

Waukesha’s water is contaminated with radium, a naturally occurring carcinogen, and neighboring communities are withdrawing water from clean water aquifers at a faster rate than it can be replenished. Waukesha asks to pump 9.2 million gallons of water each day from Lake Michigan to meet the demand for home use. Communities living on Lake Michigan don't agree that this is a good idea, they worry their communities will not have enough water if Waukesha does this. If only there was enough water for everyone's needs.

a)

People must make choices because of scarcity

b)

Choices have costs

c)

People respond to incentives

d)

The rules influence incentives and therefore choice

e)

Voluntary Trade creates wealth

8.

If you choose to go to prom with the first person who asks you, you miss out on all the other potential dates you could have had.

a)

Choices have costs

b)

People must make choices because of scarcity

c)

People respond to incentives

d)

The rules influence incentives and therefore choice

e)

The important consequences of our choices lie in the future

9.

In the 1990's, the US entered an agreement with Canada and Mexico that removed tariffs (taxes) from most products that crossed boarders for sale. Those that supported the plan believed the economies of all 3 nations would grow and the standard of living would improve overall.

a)

Voluntary Trade creates wealth

b)

The important consequences of our choices lie in the future

c)

The rules influence incentives and therefore choice

d)

People must make choices because of scarcity

e)

People respond to incentives

10.

The speed limit is 25 in town.

a)

The rules influence incentives and therefore choice

b)

The important consequences of our choices lie in the future

c)

Choices have costs

d)

People respond to incentives

e)

Voluntary Trade creates wealth

11.

When you go out to eat, you always tip the server because you know you are expected to. Tipping just because it is the norm shows that:

a)

People must make choices because of scarcity

b)

Choices have costs

c)

People respond to incentives

d)

The rules influence incentives and therefore choice

e)

The important consequences of our choices lie in the future

12.

You hear there is a sale at your favorite store, you go and buy a bunch of things that you didn't even know you 'needed'. Going shopping because there was a sale shows:

a)

People respond to incentives

b)

Choices have costs

c)

People must make choices because of scarcity

d)

Voluntary Trade creates wealth

e)

The important consequences of our choices lie in the future

13.

Companies used to ask their employees to fill out paperwork to enroll in a retirement plan when they were first hired. This strategy resulted in less than 50% enrollment. Now many companies automatically enroll employees in a retirement savings plan and the employee must fill out paper work to NOT be enrolled. Now more than 68% of employees are enrolled in a retirement savings plan. This change in how employees enroll aligns with:

a)

People must make choices because of scarcity

b)

The rules influence incentives and therefore choice

c)

People respond to incentives

d)

Voluntary Trade creates wealth

e)

The important consequences of our choices lie in the future