Question 1

What would happen if the world's resources were to suddenly double?

Accepted Answer

A)  The scarcity principle would still apply. 
B)  The scarcity principle would not be relevant. 
C)  Everyone's wants would be met. 
D)  No tradeoffs would be needed. 
A)  The scarcity principle would still apply. 
B)  The scarcity principle would not be relevant. 
C)  Everyone's wants would be met. 
D)  No tradeoffs would be needed.

Question 2

What causes almost all variation in living standards in different countries?

Accepted Answer

A)  population growth rates 
B)  endowments of natural resources 
C)  proximity to foreign markets 
D)  productivity 
A)  population growth rates 
B)  endowments of natural resources 
C)  proximity to foreign markets 
D)  productivity

Question 3

What is one component necessary for markets to work?

Accepted Answer

A)  government intervention 
B)  a non-profit sector of society 
C)  property rights 
D)  abundant resources 
A)  government intervention 
B)  a non-profit sector of society 
C)  property rights 
D)  abundant resources

Question 4

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Accepted Answer

A) True 
 B)False

Question 5

In each of the following decision situations, show what tradeoffs are involved.
a) You are driving and need to decide how fast to drive.
b) You meet a young lady at a party and you are considering whether to ask her out.
c) You like a co-worker whom you have known for a couple of years, and you need to decide whether to go on a date with him.
d) You ponder moving back with your parents.
e) You need to decide whether to buy a used or a new car.
f) You are thinking about opening a computer services business in your basement.
g) You are a consultant for the City of Toronto. The city council asks you to analyze the implications of a new high-rise office building in downtown.

Accepted Answer

a) Driving faster gets you earlier to yo

Question 6

What does inflation cause?

Accepted Answer

A)  incomes to fall 
B)  productivity to increase 
C)  the government to lower taxes 
D)  the value of money to fall 
A)  incomes to fall 
B)  productivity to increase 
C)  the government to lower taxes 
D)  the value of money to fall

Question 7

Which activity will most likely result in an external benefit?

Accepted Answer

A)  a student buys a used car so they can deliver pizzas at night 
B)  a group of children clean up a local neighbourhood park 
C)  a teenager purchases a book to read on the weekend 
D)  a parent buys their child a new snow suit 
A)  a student buys a used car so they can deliver pizzas at night 
B)  a group of children clean up a local neighbourhood park 
C)  a teenager purchases a book to read on the weekend 
D)  a parent buys their child a new snow suit

Question 8

Have countdown signals at crosswalks made people safer?

Accepted Answer

A)  yes, because drivers' attention is now more focused on the crosswalks and they are more aware of people crossing the road 
B)  yes, because everyone is better informed of the changing lights 
C)  no, because people are being more aggressive with the additional information 
D)  no, because drivers must take more time processing the information and are not focusing on driving 
A)  yes, because drivers' attention is now more focused on the crosswalks and they are more aware of people crossing the road 
B)  yes, because everyone is better informed of the changing lights 
C)  no, because people are being more aggressive with the additional information 
D)  no, because drivers must take more time processing the information and are not focusing on driving

Question 9

What will be the probable outcome if Honduras chooses to engage in trade?

Accepted Answer

A)  It will only benefit if it trades with countries that produce goods it cannot produce. 
B)  It cannot benefit if it trades with less developed countries. 
C)  It will only benefit if it trades with countries that are geographically close to Honduras. 
D)  It can benefit by trading with any other country. 
A)  It will only benefit if it trades with countries that produce goods it cannot produce. 
B)  It cannot benefit if it trades with less developed countries. 
C)  It will only benefit if it trades with countries that are geographically close to Honduras. 
D)  It can benefit by trading with any other country.

Question 10

What do we know about college-age athletes who drop out of college to play professional sports?

Accepted Answer

A)  They are not rational decision makers. 
B)  They are well aware that their opportunity cost of attending college is very high. 
C)  They are concerned more about present circumstances than their future. 
D)  They underestimate the value of a college education. 
A)  They are not rational decision makers. 
B)  They are well aware that their opportunity cost of attending college is very high. 
C)  They are concerned more about present circumstances than their future. 
D)  They underestimate the value of a college education.

Question 11

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 12

What is likely to occur when the government implements programs such as progressive income tax rates?

Accepted Answer

A)  Equity and efficiency are increased. 
B)  Equity is increased and efficiency is decreased. 
C)  Equity is decreased, and efficiency is increased. 
D)  Equity is decreased, and efficiency is decreased. 
A)  Equity and efficiency are increased. 
B)  Equity is increased and efficiency is decreased. 
C)  Equity is decreased, and efficiency is increased. 
D)  Equity is decreased, and efficiency is decreased.

Question 13

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

Accepted Answer

A)  if the marginal cost of teaching increased 
B)  if the marginal benefit of teaching increased 
C)  if the marginal cost of teaching decreased 
D)  if the marginal cost of a corporate job increased 
A)  if the marginal cost of teaching increased 
B)  if the marginal benefit of teaching increased 
C)  if the marginal cost of teaching decreased 
D)  if the marginal cost of a corporate job increased

Question 14

What would happen to the study of economics if scarcity disappeared?

Accepted Answer

Since economics is the study of how soci

Question 15

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Accepted Answer

A)  Productivity is higher in Norway than in Belize. 
B)  Norway has a more industrial economy than Belize. 
C)  There is more competition in Norway than in Belize. 
D)  Labour unions are more aggressive in Norway than in Belize. 
A)  Productivity is higher in Norway than in Belize. 
B)  Norway has a more industrial economy than Belize. 
C)  There is more competition in Norway than in Belize. 
D)  Labour unions are more aggressive in Norway than in Belize.

Question 16

Economics is the study of how fairly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 17

What is a marginal change?

Accepted Answer

A)  a long-term trend 
B)  a large, significant adjustment 
C)  a change for the worse, and so is usually short term 
D)  a small incremental adjustment 
A)  a long-term trend 
B)  a large, significant adjustment 
C)  a change for the worse, and so is usually short term 
D)  a small incremental adjustment

Question 18

If Canada decides to trade with Brazil, what do we know about the probable outcome?

Accepted Answer

A)  Brazil will be better off, but trade with a less developed country will not help Canada. 
B)  It will not benefit Brazil because workers in Canada are more productive. 
C)  It will benefit Brazil because workers in Canada are more productive. 
D)  Brazil and Canada can both be better off. 
A)  Brazil will be better off, but trade with a less developed country will not help Canada. 
B)  It will not benefit Brazil because workers in Canada are more productive. 
C)  It will benefit Brazil because workers in Canada are more productive. 
D)  Brazil and Canada can both be better off.

Question 19

What is the primary determinant of a country's standard of living?

Accepted Answer

A)  the ability to reduce foreign competition 
B)  the ability to produce goods and services 
C)  the total supply of money in the economy 
D)  the average age of the country's labour force 
A)  the ability to reduce foreign competition 
B)  the ability to produce goods and services 
C)  the total supply of money in the economy 
D)  the average age of the country's labour force

Question 20

What is almost always the cause of large or persistent inflation?

Accepted Answer

A)  an increase in demand for domestic production 
B)  growth in the quantity of money 
C)  foreign competition 
D)  higher worker productivity 
A)  an increase in demand for domestic production 
B)  growth in the quantity of money 
C)  foreign competition 
D)  higher worker productivity

What would happen if the world's resources were to suddenly double?

What causes almost all variation in living standards in different countries?

What is one component necessary for markets to work?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

What does inflation cause?

Which activity will most likely result in an external benefit?

Have countdown signals at crosswalks made people safer?

What will be the probable outcome if Honduras chooses to engage in trade?

What do we know about college-age athletes who drop out of college to play professional sports?

Trade with any nation can be mutually beneficial.

What is likely to occur when the government implements programs such as progressive income tax rates?

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

What would happen to the study of economics if scarcity disappeared?

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Economics is the study of how fairly goods and services are distributed within society.

What is a marginal change?

If Canada decides to trade with Brazil, what do we know about the probable outcome?

What is the primary determinant of a country's standard of living?

What is almost always the cause of large or persistent inflation?

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

Exam 1: Ten Principles of Economics

What would happen if the world's resources were to suddenly double?

What causes almost all variation in living standards in different countries?

What is one component necessary for markets to work?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

What does inflation cause?

Which activity will most likely result in an external benefit?

Have countdown signals at crosswalks made people safer?

What will be the probable outcome if Honduras chooses to engage in trade?

What do we know about college-age athletes who drop out of college to play professional sports?

Trade with any nation can be mutually beneficial.

What is likely to occur when the government implements programs such as progressive income tax rates?

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

What would happen to the study of economics if scarcity disappeared?

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Economics is the study of how fairly goods and services are distributed within society.

What is a marginal change?

If Canada decides to trade with Brazil, what do we know about the probable outcome?

What is the primary determinant of a country's standard of living?

What is almost always the cause of large or persistent inflation?

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