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Principles of Microeconomics

N. GREGORY MANKIW

Chapter 1

Ten Principles of Economics - all with Video Answers

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Chapter Questions

01:51

Problem 1

Economics is best defined as the study of
a. how society manages its scarce resources.
b. how to run a business most profitably.
c. how to predict inflation, unemployment, and stock
d. how the government can stop the harm from
unchecked self-interest.

Sanchit Jain
Sanchit Jain
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03:08

Problem 2

Your opportunity cost of going to a movie is
a. the price of the ticket.
b. the price of the ticket plus the cost of any soda
and popcorn you buy at the theater.
c. the total cash expenditure needed to go to the
d. zero, as long as you enjoy the movie and consider
it a worthwhile use of time and money.

Bryan Kim
Bryan Kim
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01:46

Problem 3

A marginal change is one that
a. is not important for public policy.
b. incrementally alters an existing plan.
c. makes an outcome inefficient.
d. does not influence incentives.

Tristan Wille
Tristan Wille
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02:07

Problem 4

Adam Smith' invisible hand refers to
a. the subtle and often hidden methods that businesses use to profit at consumers' expense.
b. the ability of free markets to reach desirable
outcomes, despite the self-interest of market
participants.
c. the ability of government regulation to benefit consumers, even if the consumers are unaware of the
regulations.
d. the way in which producers or consumers in

Bryan Kim
Bryan Kim
Numerade Educator
02:25

Problem 5

Governments may intervene in a market economy in
order to
a. protect property rights.
b. correct a market failure due to externalities.
c. achieve a more equal distribution of income.
d. All of the above
unregulated markets impose costs on innocent
bystanders.

Srikar Katta
Srikar Katta
Numerade Educator
02:24

Problem 6

If a nation has high and persistent inflation, the most
likely explanation is
a. the central bank creating excessive amounts of
money.
b. unions bargaining for excessively high wages.
c. the government imposing excessive levels of taxation.
d. firms using their monopoly power to enforce excessive price hikes.

Bryan Kim
Bryan Kim
Numerade Educator