Question 1

What is market power?

Accepted Answer

A)  the power of a single person or group to influence market prices 
B)  the ability of a person or group of people to successfully market new products 
C)  the power of the government to regulate a market 
D)  the relative importance of a market to the overall economy 
A)  the power of a single person or group to influence market prices 
B)  the ability of a person or group of people to successfully market new products 
C)  the power of the government to regulate a market 
D)  the relative importance of a market to the overall economy

Question 2

What might a government do to enact a policy to increase living standards?

Accepted Answer

A)  allow corporate tax write-offs for money spent on worker safety 
B)  make it more difficult to receive unemployment benefits 
C)  increase educational opportunities for workers 
D)  prohibit unions from organizing 
A)  allow corporate tax write-offs for money spent on worker safety 
B)  make it more difficult to receive unemployment benefits 
C)  increase educational opportunities for workers 
D)  prohibit unions from organizing

Question 3

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

Accepted Answer

A)  by the invisible hand 
B)  by market power 
C)  by government intervention 
D)  by property rights 
A)  by the invisible hand 
B)  by market power 
C)  by government intervention 
D)  by property rights

Question 4

In which situation would economists use the word equity?

Accepted Answer

A)  Each member of society has the same income. 
B)  Society is getting the most it can from its scarce resources. 
C)  Those in society who have the least will receive the most. 
D)  The benefits of society's resources are distributed fairly among society's members. 
A)  Each member of society has the same income. 
B)  Society is getting the most it can from its scarce resources. 
C)  Those in society who have the least will receive the most. 
D)  The benefits of society's resources are distributed fairly among society's members.

Question 5

Because taxes affect only the price paid by the buyer, they cannot have an adverse impact on the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 6

What is an externality?

Accepted Answer

A)  the impact of one person's actions on the well-being of a bystander 
B)  the impact of a person's actions on that person's well-being 
C)  the impact of society's decisions on the well-being of another society 
D)  the impact of society's decisions on the well-being of one person in the society 
A)  the impact of one person's actions on the well-being of a bystander 
B)  the impact of a person's actions on that person's well-being 
C)  the impact of society's decisions on the well-being of another society 
D)  the impact of society's decisions on the well-being of one person in the society

Question 7

Who is Inspector Sands?

Accepted Answer

A)  the first police officer to use economics to solve a crime in the U.K. 
B)  the first person convicted of using the Internet to commit a crime 
C)  the leading forensic economist who studies criminal incentives 
D)  the code name used to alert staff and police in the U.K to an emergency without causing panic 
A)  the first police officer to use economics to solve a crime in the U.K. 
B)  the first person convicted of using the Internet to commit a crime 
C)  the leading forensic economist who studies criminal incentives 
D)  the code name used to alert staff and police in the U.K to an emergency without causing panic

Question 8

What happens when society requires that firms reduce pollution?

Accepted Answer

A)  There is a tradeoff because of reduced incomes to the firms' owners, workers, and customers. 
B)  There is no tradeoff, since everyone benefits from reduced pollution. 
C)  There is no tradeoff for society as a whole because the cost of reducing pollution falls only on the firms affected by the requirements. 
D)  There is a tradeoff only if some firms are forced to close. 
A)  There is a tradeoff because of reduced incomes to the firms' owners, workers, and customers. 
B)  There is no tradeoff, since everyone benefits from reduced pollution. 
C)  There is no tradeoff for society as a whole because the cost of reducing pollution falls only on the firms affected by the requirements. 
D)  There is a tradeoff only if some firms are forced to close.

Question 9

What is a primary function of prices in a market economy?

Accepted Answer

A)  to provide participants with economic information 
B)  to provide participants with spending limits 
C)  to provide participants with accounting capabilities 
D)  to provide participants with an equitable distribution of goods 
A)  to provide participants with economic information 
B)  to provide participants with spending limits 
C)  to provide participants with accounting capabilities 
D)  to provide participants with an equitable distribution of goods

Question 10

What does making decisions "at the margin" mean?

Accepted Answer

A)  that people make those decisions that do not impose a marginal cost 
B)  that people evaluate how easily a decision can be reversed if problems arise 
C)  that people compare the marginal costs and marginal benefits of each decision 
D)  that people always calculate the marginal dollar costs for each decision 
A)  that people make those decisions that do not impose a marginal cost 
B)  that people evaluate how easily a decision can be reversed if problems arise 
C)  that people compare the marginal costs and marginal benefits of each decision 
D)  that people always calculate the marginal dollar costs for each decision

Question 11

To what extent does the invisible hand model of a market ensure equity and efficiency?

Accepted Answer

A)  The invisible hand always ensures both equity and efficiency. 
B)  The invisible hand cannot ensure either equity or efficiency. 
C)  The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D)  The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. 
A)  The invisible hand always ensures both equity and efficiency. 
B)  The invisible hand cannot ensure either equity or efficiency. 
C)  The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D)  The invisible hand is more effective at ensuring equity than it is at ensuring efficiency.

Question 12

Which of the following is an example of market power?

Accepted Answer

A)  a fast food restaurant in a university town 
B)  a wheat farmer in Saskatchewan 
C)  the only motel is in a remote Yukon town 
D)  a shoe store in Ontario 
A)  a fast food restaurant in a university town 
B)  a wheat farmer in Saskatchewan 
C)  the only motel is in a remote Yukon town 
D)  a shoe store in Ontario

Question 13

Jay has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800. He discovers that he needs an additional repair, which will cost $400. He can sell the boat as it is now for $300. What should he do?

Accepted Answer

A)  He should take the $300. 
B)  He should never sell something for less than its cost. 
C)  He should complete the repairs and sell the boat. 
D)  It doesn't matter which action he takes; the outcome is the same either way. 
A)  He should take the $300. 
B)  He should never sell something for less than its cost. 
C)  He should complete the repairs and sell the boat. 
D)  It doesn't matter which action he takes; the outcome is the same either way.

Question 14

Equity refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Accepted Answer

A) True 
 B)False

Question 15

What would happen without the government's protection of property rights?

Accepted Answer

A)  Businesses would have less incentive to provide goods and services. 
B)  There would be less government regulation of businesses and prices would be lower for consumers. 
C)  Taxes would be lower, causing less market inefficiencies. 
D)  Businesses would have more freedom with production processes. 
A)  Businesses would have less incentive to provide goods and services. 
B)  There would be less government regulation of businesses and prices would be lower for consumers. 
C)  Taxes would be lower, causing less market inefficiencies. 
D)  Businesses would have more freedom with production processes.

Question 16

What is the best example of a marginal change?

Accepted Answer

A)  After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. 
B)  Jadelyn completes the six-month probationary period at her job and is now paid $11.2 |5 per hour instead of $11.00. 
C)  Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D)  A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles. 
A)  After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. 
B)  Jadelyn completes the six-month probationary period at her job and is now paid $11.2 |5 per hour instead of $11.00. 
C)  Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D)  A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles.

Question 17

Why do both households and societies face many decisions?

Accepted Answer

A)  Resources are scarce. 
B)  Populations may fluctuate over time. 
C)  Wages for households and therefore society fluctuate with business cycles. 
D)  People, by nature, tend to disagree. 
A)  Resources are scarce. 
B)  Populations may fluctuate over time. 
C)  Wages for households and therefore society fluctuate with business cycles. 
D)  People, by nature, tend to disagree.

Question 18

What is an example of a monopoly?

Accepted Answer

A)  a jewellery store in Burnaby, British Columbia 
B)  a souvenir shop in Cancun, Mexico 
C)  an electric company in Outlook, Saskatchewan 
D)  a doctor in St. John's, New Brunswick 
A)  a jewellery store in Burnaby, British Columbia 
B)  a souvenir shop in Cancun, Mexico 
C)  an electric company in Outlook, Saskatchewan 
D)  a doctor in St. John's, New Brunswick

Question 19

Which of the following displays a direct, or positive, relationship?

Accepted Answer

A)  a country's productivity and its standard of living 
B)  a country's government spending and its tax rates 
C)  a country's total population and its per-capita income 
D)  a country's prices for its goods and services and its exports 
A)  a country's productivity and its standard of living 
B)  a country's government spending and its tax rates 
C)  a country's total population and its per-capita income 
D)  a country's prices for its goods and services and its exports

Question 20

To improve living standards, what should policymakers do?

Accepted Answer

A)  impose restriction on foreign competition 
B)  formulate policies designed to increase productivity 
C)  impose tougher immigration policies 
D)  provide subsidized childcare to low-income families 
A)  impose restriction on foreign competition 
B)  formulate policies designed to increase productivity 
C)  impose tougher immigration policies 
D)  provide subsidized childcare to low-income families

What is market power?

What might a government do to enact a policy to increase living standards?

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

In which situation would economists use the word equity?

Because taxes affect only the price paid by the buyer, they cannot have an adverse impact on the allocation of society's resources.

What is an externality?

Who is Inspector Sands?

What happens when society requires that firms reduce pollution?

What is a primary function of prices in a market economy?

What does making decisions "at the margin" mean?

To what extent does the invisible hand model of a market ensure equity and efficiency?

Which of the following is an example of market power?

Jay has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800. He discovers that he needs an additional repair, which will cost $400. He can sell the boat as it is now for $300. What should he do?

Equity refers to how the pie is divided, and efficiency refers to the size of the economic pie.

What would happen without the government's protection of property rights?

What is the best example of a marginal change?

Why do both households and societies face many decisions?

What is an example of a monopoly?

Which of the following displays a direct, or positive, relationship?

To improve living standards, what should policymakers do?

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 is market power?

What might a government do to enact a policy to increase living standards?

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

In which situation would economists use the word equity?

Because taxes affect only the price paid by the buyer, they cannot have an adverse impact on the allocation of society's resources.

What is an externality?

Who is Inspector Sands?

What happens when society requires that firms reduce pollution?

What is a primary function of prices in a market economy?

What does making decisions "at the margin" mean?

To what extent does the invisible hand model of a market ensure equity and efficiency?

Which of the following is an example of market power?

Jay has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800. He discovers that he needs an additional repair, which will cost $400. He can sell the boat as it is now for $300. What should he do?

Equity refers to how the pie is divided, and efficiency refers to the size of the economic pie.

What would happen without the government's protection of property rights?

What is the best example of a marginal change?

Why do both households and societies face many decisions?

What is an example of a monopoly?

Which of the following displays a direct, or positive, relationship?

To improve living standards, what should policymakers do?

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