Question 1

The Students' Union on campus provides free popcorn to all students who attend their annual meeting. In this instance, how will the principle of scarcity apply?

Accepted Answer

A)  It will only apply to students who miss class to attend. 
B)  It will apply in terms of the time given up to attend. 
C)  It will not apply because the popcorn is free. 
D)  It will not apply because no tradeoffs are involved. 
A)  It will only apply to students who miss class to attend. 
B)  It will apply in terms of the time given up to attend. 
C)  It will not apply because the popcorn is free. 
D)  It will not apply because no tradeoffs are involved.

Question 2

What do economists study?

Accepted Answer

A)  how people make decisions 
B)  how governments interact with one another 
C)  the forces and trends that affect only the economy as a whole 
D)  how societies change over time 
A)  how people make decisions 
B)  how governments interact with one another 
C)  the forces and trends that affect only the economy as a whole 
D)  how societies change over time

Question 3

What is the income of a typical worker in a country most closely linked to?

Accepted Answer

A)  population 
B)  productivity 
C)  the number of labour unions 
D)  government policies 
A)  population 
B)  productivity 
C)  the number of labour unions 
D)  government policies

Question 4

A typical worker in France can produce 48 units of product in an eight-hour day, where a typical worker in Romania produces 50 units of product in a 10-hour day. What can we conclude?

Accepted Answer

A)  Worker productivity in Romania is higher than in France. 
B)  The standard of living will be higher in France than in Romania. 
C)  Productivity for the Romanian worker is six units per hour and five units per hour for the French worker. 
D)  There will be no difference between the standard of living in France and Romania. 
A)  Worker productivity in Romania is higher than in France. 
B)  The standard of living will be higher in France than in Romania. 
C)  Productivity for the Romanian worker is six units per hour and five units per hour for the French worker. 
D)  There will be no difference between the standard of living in France and Romania.

Question 5

When is a good considered scarce in a society?

Accepted Answer

A)  when more output of the good is possible 
B)  when everyone in that society cannot have all they want of the good 
C)  when the government restricts production of the good 
D)  when only the richest people in the economy can buy all they want of the good 
A)  when more output of the good is possible 
B)  when everyone in that society cannot have all they want of the good 
C)  when the government restricts production of the good 
D)  when only the richest people in the economy can buy all they want of the good

Question 6

Which statement best describes the relationship between inflation and unemployment?

Accepted Answer

A)  In the short run, reducing inflation is associated with falling unemployment. 
B)  In the short run, reducing inflation is associated with rising unemployment. 
C)  In the long run, reducing inflation is associated with falling unemployment. 
D)  In the long run, reducing inflation is associated with rising unemployment. 
A)  In the short run, reducing inflation is associated with falling unemployment. 
B)  In the short run, reducing inflation is associated with rising unemployment. 
C)  In the long run, reducing inflation is associated with falling unemployment. 
D)  In the long run, reducing inflation is associated with rising unemployment.

Question 7

Suppose your accounting professor has been offered a corporate job with a 20 percent pay increase. Why has he decided to take the job?

Accepted Answer

A)  The marginal cost of leaving was greater than the marginal benefit. 
B)  The marginal benefit of leaving was greater than the marginal cost. 
C)  The marginal benefit of teaching was greater than the marginal cost. 
D)  The marginal cost of teaching was greater than the marginal benefit. 
A)  The marginal cost of leaving was greater than the marginal benefit. 
B)  The marginal benefit of leaving was greater than the marginal cost. 
C)  The marginal benefit of teaching was greater than the marginal cost. 
D)  The marginal cost of teaching was greater than the marginal benefit.

Question 8

Government spending is the primary source of inflation.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is NOT a reason for the government to intervene in the market?

Accepted Answer

A)  to promote efficiency 
B)  to enforce property rights 
C)  to promote equity 
D)  to protect an industry 
A)  to promote efficiency 
B)  to enforce property rights 
C)  to promote equity 
D)  to protect an industry

Question 10

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 11

Scarcity means that there is less of a good or resource available than people wish to have.

Accepted Answer

A) True 
 B)False

Question 12

In a market economy, what do prices reflect?

Accepted Answer

A)  the popularity of a good in society 
B)  the cost to society of making the good 
C)  the quantity society will ultimately choose to produce 
D)  the level of wealth in society 
A)  the popularity of a good in society 
B)  the cost to society of making the good 
C)  the quantity society will ultimately choose to produce 
D)  the level of wealth in society

Question 13

Which statement is consistent with the tenth principle of economics?

Accepted Answer

A)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily fall. 
B)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily rise. 
C)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will permanently fall. 
D)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will permanently rise. 
A)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily fall. 
B)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily rise. 
C)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will permanently fall. 
D)  If we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will permanently rise.

Question 14

How can trade benefit a family?

Accepted Answer

A)  by allowing the family to buy a greater variety of goods and services at a lower cost 
B)  by allowing each person to buy only the goods and services they want most 
C)  only if the family is not in economic competition with other families 
D)  trade can only benefit entire nations, not individuals 
A)  by allowing the family to buy a greater variety of goods and services at a lower cost 
B)  by allowing each person to buy only the goods and services they want most 
C)  only if the family is not in economic competition with other families 
D)  trade can only benefit entire nations, not individuals

Question 15

With which nations does Canada benefit from trade?

Accepted Answer

A)  only nations that can produce goods Canada cannot produce 
B)  with any nation 
C)  with any nation not in economic competition with Canada 
D)  only with less developed nations 
A)  only nations that can produce goods Canada cannot produce 
B)  with any nation 
C)  with any nation not in economic competition with Canada 
D)  only with less developed nations

Question 16

Why do taxes adversely affect the allocation of resources in society?

Accepted Answer

A)  because they do not always fall more heavily on the rich 
B)  because the taxes collected are not enough to finance government spending 
C)  because not everyone pays taxes 
D)  because they distort prices and thus the decisions of households and firms 
A)  because they do not always fall more heavily on the rich 
B)  because the taxes collected are not enough to finance government spending 
C)  because not everyone pays taxes 
D)  because they distort prices and thus the decisions of households and firms

Question 17

David receives $200 as a birthday gift. In deciding how to spend the money, he narrows his options down to four: A, B, C, and D. The price of each option is $100, but David prefers B to C, C to A, and A to D. What is the opportunity cost of option B?

Accepted Answer

A)  It is David's valuation of C. 
B)  It is David's valuation of A, C, and D together. 
C)  It is $200. 
D)  It is $100. 
A)  It is David's valuation of C. 
B)  It is David's valuation of A, C, and D together. 
C)  It is $200. 
D)  It is $100.

Question 18

Approximately what percentage of the world's economies experience scarcity?

Accepted Answer

A)  30 
B)  45 
C)  60 
D)  100 
A)  30 
B)  45 
C)  60 
D)  100

Question 19

In what economy are the decisions of firms and households guided by profit and self-interest?

Accepted Answer

A)  a command economy 
B)  a traditional economy 
C)  a market economy 
D)  in every economy 
A)  a command economy 
B)  a traditional economy 
C)  a market economy 
D)  in every economy

Question 20

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

The Students' Union on campus provides free popcorn to all students who attend their annual meeting. In this instance, how will the principle of scarcity apply?

What do economists study?

What is the income of a typical worker in a country most closely linked to?

A typical worker in France can produce 48 units of product in an eight-hour day, where a typical worker in Romania produces 50 units of product in a 10-hour day. What can we conclude?

When is a good considered scarce in a society?

Which statement best describes the relationship between inflation and unemployment?

Suppose your accounting professor has been offered a corporate job with a 20 percent pay increase. Why has he decided to take the job?

Government spending is the primary source of inflation.

Which of the following is NOT a reason for the government to intervene in the market?

The cost of an action is measured in terms of foregone opportunities.

Scarcity means that there is less of a good or resource available than people wish to have.

In a market economy, what do prices reflect?

Which statement is consistent with the tenth principle of economics?

How can trade benefit a family?

With which nations does Canada benefit from trade?

Why do taxes adversely affect the allocation of resources in society?

David receives $200 as a birthday gift. In deciding how to spend the money, he narrows his options down to four: A, B, C, and D. The price of each option is $100, but David prefers B to C, C to A, and A to D. What is the opportunity cost of option B?

Approximately what percentage of the world's economies experience scarcity?

In what economy are the decisions of firms and households guided by profit and self-interest?

Tuition is the single-largest cost of attending college for most students.

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

The Students' Union on campus provides free popcorn to all students who attend their annual meeting. In this instance, how will the principle of scarcity apply?

What do economists study?

What is the income of a typical worker in a country most closely linked to?

A typical worker in France can produce 48 units of product in an eight-hour day, where a typical worker in Romania produces 50 units of product in a 10-hour day. What can we conclude?

When is a good considered scarce in a society?

Which statement best describes the relationship between inflation and unemployment?

Suppose your accounting professor has been offered a corporate job with a 20 percent pay increase. Why has he decided to take the job?

Government spending is the primary source of inflation.

Which of the following is NOT a reason for the government to intervene in the market?

The cost of an action is measured in terms of foregone opportunities.

Scarcity means that there is less of a good or resource available than people wish to have.

In a market economy, what do prices reflect?

Which statement is consistent with the tenth principle of economics?

How can trade benefit a family?

With which nations does Canada benefit from trade?

Why do taxes adversely affect the allocation of resources in society?

David receives $200 as a birthday gift. In deciding how to spend the money, he narrows his options down to four: A, B, C, and D. The price of each option is $100, but David prefers B to C, C to A, and A to D. What is the opportunity cost of option B?

Approximately what percentage of the world's economies experience scarcity?

In what economy are the decisions of firms and households guided by profit and self-interest?

Tuition is the single-largest cost of attending college for most students.

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