Question 1

What was inflation in Canada in the 1990s?

Accepted Answer

A)  It was almost zero. 
B)  It was about 2 percent per year. 
C)  It was approaching double digits. 
D)  It was about 10 percent per year. 
A)  It was almost zero. 
B)  It was about 2 percent per year. 
C)  It was approaching double digits. 
D)  It was about 10 percent per year.

Question 2

Equity means everyone in the economy should receive an equal share of the goods and services produced.

Accepted Answer

A) True 
 B)False

Question 3

What happens if a paper mill creates too much air pollution?

Accepted Answer

A)  Interference by the government will surely make the matter worse. 
B)  A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C)  The government can raise economic well-being by providing health care to those affected by the pollution. 
D)  The government can raise economic well-being through environmental regulation. 
A)  Interference by the government will surely make the matter worse. 
B)  A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C)  The government can raise economic well-being by providing health care to those affected by the pollution. 
D)  The government can raise economic well-being through environmental regulation.

Question 4

Montana decides to spend three hours working overtime rather than watching Netflix with her friends. She earns $15 an hour. What is her opportunity cost of working?

Accepted Answer

A)  the $45 she earns working 
B)  the $45 minus the enjoyment she would have received from watching Netflix 
C)  the enjoyment she would have received had she watched Netflix 
D)  nothing, because she would have received less than $45 of enjoyment from Netflix 
A)  the $45 she earns working 
B)  the $45 minus the enjoyment she would have received from watching Netflix 
C)  the enjoyment she would have received had she watched Netflix 
D)  nothing, because she would have received less than $45 of enjoyment from Netflix

Question 5

What happens when the government attempts to cut the economic pie into more equal slices?

Accepted Answer

A)  It is easier to cut the pie, and therefore the economy can produce a larger pie. 
B)  The government can more easily allocate the pie to those most in need. 
C)  The pie gets smaller, and there will be less pie for everyone. 
D)  The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone. 
A)  It is easier to cut the pie, and therefore the economy can produce a larger pie. 
B)  The government can more easily allocate the pie to those most in need. 
C)  The pie gets smaller, and there will be less pie for everyone. 
D)  The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone.

Question 6

Carol has spent $2000 purchasing and repairing an old car, which she expects to sell for $2400. She discovers that she needs an additional repair, which will cost $400. She can sell the car as it is now for $2000. What should she do?

Accepted Answer

A)  She should sell the car now for $2000. 
B)  She should never sell something for less than it cost. 
C)  She should complete the repairs and sell the car. 
D)  It doesn't matter which action she takes; the outcome is the same either way. 
A)  She should sell the car now for $2000. 
B)  She should never sell something for less than it cost. 
C)  She should complete the repairs and sell the car. 
D)  It doesn't matter which action she takes; the outcome is the same either way.

Question 7

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Because this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

Accepted Answer

A)  lower the price of the remaining donuts even if the price falls below $1.00 
B)  lower the price of the remaining donuts as long as it’s more than $1.00 
C)  lower the price on all donuts so they will all be sold earlier in the day 
D)  donate them to the local Food Bank and produce ten fewer dozen tomorrow 
A)  lower the price of the remaining donuts even if the price falls below $1.00 
B)  lower the price of the remaining donuts as long as it’s more than $1.00 
C)  lower the price on all donuts so they will all be sold earlier in the day 
D)  donate them to the local Food Bank and produce ten fewer dozen tomorrow

Question 8

According to the article "Risk, Reward and the Economics of the Criminal Mind", which of the following has had little impact on the recent decline in crime?

Accepted Answer

A)  tougher penalties 
B)  aging population 
C)  better theft prevention technologies 
D)  changes in economic incentives 
A)  tougher penalties 
B)  aging population 
C)  better theft prevention technologies 
D)  changes in economic incentives

Question 9

What is the definition of inflation?

Accepted Answer

A)  a period of rising productivity in the economy 
B)  a period of rising income in the economy 
C)  an increase in the overall level of output in the economy 
D)  an increase in the overall level of prices in the economy 
A)  a period of rising productivity in the economy 
B)  a period of rising income in the economy 
C)  an increase in the overall level of output in the economy 
D)  an increase in the overall level of prices in the economy

Question 10

How does the invisible hand primarily work to promote general well-being in the economy?

Accepted Answer

A)  through government intervention 
B)  through the political process 
C)  through self-interest 
D)  through altruism 
A)  through government intervention 
B)  through the political process 
C)  through self-interest 
D)  through altruism

Question 11

What does NOT result when seat belt laws alter a driver's cost-benefit calculation?

Accepted Answer

A)  Fewer drivers are killed. 
B)  More pedestrians are killed. 
C)  Drivers drive faster. 
D)  More accidents occur. 
A)  Fewer drivers are killed. 
B)  More pedestrians are killed. 
C)  Drivers drive faster. 
D)  More accidents occur.

Question 12

What is the largest single cost of going to university?

Accepted Answer

A)  books 
B)  room and board 
C)  tuition 
D)  lost wages 
A)  books 
B)  room and board 
C)  tuition 
D)  lost wages

Question 13

What term refers to the amount of goods and services produced from each hour of a worker's time?

Accepted Answer

A)  total output 
B)  productivity 
C)  marginal product 
D)  quantity 
A)  total output 
B)  productivity 
C)  marginal product 
D)  quantity

Question 14

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 15

What has been the result of laws requiring that drivers wear seat belts?

Accepted Answer

A)  a reduction in both driver deaths and pedestrian deaths 
B)  fewer accidents and fewer deaths per accident 
C)  fewer driver deaths, fewer accidents, and fewer pedestrian deaths 
D)  little change in the number of driver deaths, but more accidents and more pedestrian deaths 
A)  a reduction in both driver deaths and pedestrian deaths 
B)  fewer accidents and fewer deaths per accident 
C)  fewer driver deaths, fewer accidents, and fewer pedestrian deaths 
D)  little change in the number of driver deaths, but more accidents and more pedestrian deaths

Question 16

What does trade NOT achieve?

Accepted Answer

A)  increased competition 
B)  equal gains for both countries involved 
C)  some gains for both countries involved 
D)  greater production efficiency 
A)  increased competition 
B)  equal gains for both countries involved 
C)  some gains for both countries involved 
D)  greater production efficiency

Question 17

Define opportunity cost. What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

Accepted Answer

Whatever must be given up to obtain some

Question 18

In a market economy, decisions are guided by individual self-interest. What impact does this have?

Accepted Answer

A)  There is still the ability to achieve desirable economic well-being for society as a whole. 
B)  There is a strong need for government intervention in the market. 
C)  There is less efficiency in market economies than in command economies. 
D)  There is more need for a strong legal system to control individual greed. 
A)  There is still the ability to achieve desirable economic well-being for society as a whole. 
B)  There is a strong need for government intervention in the market. 
C)  There is less efficiency in market economies than in command economies. 
D)  There is more need for a strong legal system to control individual greed.

Question 19

How does the government enforce property rights?

Accepted Answer

A)  by requiring property owners to pay property taxes 
B)  by providing police and courts 
C)  by allowing people to decide whether or not they wish to own property 
D)  by providing a system of recording property deeds 
A)  by requiring property owners to pay property taxes 
B)  by providing police and courts 
C)  by allowing people to decide whether or not they wish to own property 
D)  by providing a system of recording property deeds

Question 20

What is the opportunity cost of going to university?

Accepted Answer

A)  the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B)  the value of the best opportunity a student gives up to attend university 
C)  zero, for students who are fortunate enough to attend on a scholarship 
D)  zero, because a college education will allow a student to earn a larger income after graduation 
A)  the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B)  the value of the best opportunity a student gives up to attend university 
C)  zero, for students who are fortunate enough to attend on a scholarship 
D)  zero, because a college education will allow a student to earn a larger income after graduation

What was inflation in Canada in the 1990s?

Equity means everyone in the economy should receive an equal share of the goods and services produced.

What happens if a paper mill creates too much air pollution?

Montana decides to spend three hours working overtime rather than watching Netflix with her friends. She earns $15 an hour. What is her opportunity cost of working?

What happens when the government attempts to cut the economic pie into more equal slices?

Carol has spent $2000 purchasing and repairing an old car, which she expects to sell for $2400. She discovers that she needs an additional repair, which will cost $400. She can sell the car as it is now for $2000. What should she do?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Because this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

According to the article "Risk, Reward and the Economics of the Criminal Mind", which of the following has had little impact on the recent decline in crime?

What is the definition of inflation?

How does the invisible hand primarily work to promote general well-being in the economy?

What does NOT result when seat belt laws alter a driver's cost-benefit calculation?

What is the largest single cost of going to university?

What term refers to the amount of goods and services produced from each hour of a worker's time?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

What has been the result of laws requiring that drivers wear seat belts?

What does trade NOT achieve?

Define opportunity cost. What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

In a market economy, decisions are guided by individual self-interest. What impact does this have?

How does the government enforce property rights?

What is the opportunity cost of going to university?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 1: Ten Principles of Economics

What was inflation in Canada in the 1990s?

Equity means everyone in the economy should receive an equal share of the goods and services produced.

What happens if a paper mill creates too much air pollution?

Montana decides to spend three hours working overtime rather than watching Netflix with her friends. She earns $15 an hour. What is her opportunity cost of working?

What happens when the government attempts to cut the economic pie into more equal slices?

Carol has spent $2000 purchasing and repairing an old car, which she expects to sell for $2400. She discovers that she needs an additional repair, which will cost $400. She can sell the car as it is now for $2000. What should she do?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Because this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

According to the article "Risk, Reward and the Economics of the Criminal Mind", which of the following has had little impact on the recent decline in crime?

What is the definition of inflation?

How does the invisible hand primarily work to promote general well-being in the economy?

What does NOT result when seat belt laws alter a driver's cost-benefit calculation?

What is the largest single cost of going to university?

What term refers to the amount of goods and services produced from each hour of a worker's time?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

What has been the result of laws requiring that drivers wear seat belts?

What does trade NOT achieve?

Define opportunity cost. What is the opportunity cost to you of attending university? What was your opportunity cost of coming to class today?

In a market economy, decisions are guided by individual self-interest. What impact does this have?

How does the government enforce property rights?

What is the opportunity cost of going to university?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters