Question 1

In 2018, what was the average Canadian income?

Accepted Answer

A)  $30,000 
B)  $50,000 
C)  $70,000 
D)  $90,000 
A)  $30,000 
B)  $50,000 
C)  $70,000 
D)  $90,000

Question 2

What is the effect of a trade between Canada and Vietnam?

Accepted Answer

A)  benefits for both Canada and Vietnam 
B)  a losing proposition for Canada because Vietnam has cheaper labour 
C)  trade between the two countries would be inefficient due to the high cost of transporting the goods 
D)  a losing proposition for Vietnam because Canadian workers are more productive 
A)  benefits for both Canada and Vietnam 
B)  a losing proposition for Canada because Vietnam has cheaper labour 
C)  trade between the two countries would be inefficient due to the high cost of transporting the goods 
D)  a losing proposition for Vietnam because Canadian workers are more productive

Question 3

Which business most likely has market power?

Accepted Answer

A)  a furniture store in Kingston 
B)  a vineyard in the Okanagan Valley 
C)  a maple sugar candy store in Sherbrooke, Quebec 
D)  a hockey arena in the small town of Invermere, British Columbia 
A)  a furniture store in Kingston 
B)  a vineyard in the Okanagan Valley 
C)  a maple sugar candy store in Sherbrooke, Quebec 
D)  a hockey arena in the small town of Invermere, British Columbia

Question 4

Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $15,000 and that he can sell it for $19,000. When he has spent $15,000, he discovers he needs to replace the engine, which will cost $4000. He can sell the car without the new engine for $9000. What should Stan do?

Accepted Answer

A)  He should complete the repairs and sell the car for $13,000. 
B)  He should sell the car now for $9000. 
C)  He should never try such an expensive project again. 
D)  He should be totally indifferent between finishing the project and selling the car now. 
A)  He should complete the repairs and sell the car for $13,000. 
B)  He should sell the car now for $9000. 
C)  He should never try such an expensive project again. 
D)  He should be totally indifferent between finishing the project and selling the car now.

Question 5

A marginal change is a small incremental adjustment to an existing plan of action.

Accepted Answer

A) True 
 B)False

Question 6

What concept does economics primarily deal with?

Accepted Answer

A)  scarcity 
B)  poverty 
C)  change 
D)  power 
A)  scarcity 
B)  poverty 
C)  change 
D)  power

Question 7

Which policy target will NOT affect the combination of inflation and unemployment the economy experiences?

Accepted Answer

A)  taxes 
B)  government spending 
C)  the money supply 
D)  market prices 
A)  taxes 
B)  government spending 
C)  the money supply 
D)  market prices

Question 8

Inflation decreases the value of money.

Accepted Answer

A) True 
 B)False

Question 9

In most societies, who allocates resources?

Accepted Answer

A)  a single central planner 
B)  those who own the resources 
C)  those firms that use resources to provide goods and services 
D)  the combined actions of millions of households and firms 
A)  a single central planner 
B)  those who own the resources 
C)  those firms that use resources to provide goods and services 
D)  the combined actions of millions of households and firms

Question 10

What happens when the government prevents prices from adjusting naturally to supply and demand?

Accepted Answer

A)  It stabilizes the economy by reducing market uncertainties. 
B)  It adversely affects the allocation of resources. 
C)  There is an improvement in equity that justifies the reduction in efficiency. 
D)  There is an improvement in efficiency that justifies the reduction in equity. 
A)  It stabilizes the economy by reducing market uncertainties. 
B)  It adversely affects the allocation of resources. 
C)  There is an improvement in equity that justifies the reduction in efficiency. 
D)  There is an improvement in efficiency that justifies the reduction in equity.

Question 11

What is the definition of productivity?

Accepted Answer

A)  the amount of goods and services produced from each hour of a worker's time 
B)  the amount of labour that can be saved by replacing workers with machines 
C)  the actual amount of effort workers put into an hour of working time 
D)  the estimated amount of effort workers put into an hour of working time 
A)  the amount of goods and services produced from each hour of a worker's time 
B)  the amount of labour that can be saved by replacing workers with machines 
C)  the actual amount of effort workers put into an hour of working time 
D)  the estimated amount of effort workers put into an hour of working time

Question 12

What concept is illustrated by the adage, "There is no such thing as a free lunch"?

Accepted Answer

A)  tradeoffs 
B)  scarcity 
C)  productivity 
D)  efficiency 
A)  tradeoffs 
B)  scarcity 
C)  productivity 
D)  efficiency

Question 13

What will happen if an oil refinery does NOT bear the entire cost of the smoke it emits?

Accepted Answer

A)  It will not emit any smoke so as to avoid the entire cost of the smoke. 
B)  It will emit lower levels of smoke. 
C)  It will emit an acceptable level of smoke. 
D)  It will emit too much smoke. 
A)  It will not emit any smoke so as to avoid the entire cost of the smoke. 
B)  It will emit lower levels of smoke. 
C)  It will emit an acceptable level of smoke. 
D)  It will emit too much smoke.

Question 14

Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $15,000 and that he can sell it for $19,000. When he has spent $14,000, he discovers he needs to replace the engine, which will cost $5000. He can sell the car without the new engine for $16,000. What should Stan do?

Accepted Answer

A)  He should complete the repairs and sell the car for $19,000. 
B)  He should sell the car now for $16,000. 
C)  He should keep the car for his own use because selling it would be a loss. 
D)  He should be totally indifferent between finishing the project and selling the car now. 
A)  He should complete the repairs and sell the car for $19,000. 
B)  He should sell the car now for $16,000. 
C)  He should keep the car for his own use because selling it would be a loss. 
D)  He should be totally indifferent between finishing the project and selling the car now.

Question 15

John buys a 1948 Ford F47, which he plans to restore and sell. He anticipates that the cost of the truck and the repairs will be $11,000 and that he can sell it for $20,000. After he has spent $11,000, he discovers he needs to replace the engine, which will cost $5000. He can sell the truck without the new engine for $14,000. What should John do?

Accepted Answer

A)  He should complete the repairs for $5000 and sell the truck for $20,000. 
B)  He should sell the truck now for $14,000. 
C)  He should keep the truck for his own use because selling it would be a loss. 
D)  He should be totally indifferent between finishing the project and selling the truck now. 
A)  He should complete the repairs for $5000 and sell the truck for $20,000. 
B)  He should sell the truck now for $14,000. 
C)  He should keep the truck for his own use because selling it would be a loss. 
D)  He should be totally indifferent between finishing the project and selling the truck now.

Question 16

When the government attempts to improve equity in an economy, what is often the result?

Accepted Answer

A)  an increase in overall output in the economy 
B)  additional government revenue since overall income will increase 
C)  an actual reduction in equity 
D)  reduced efficiency in the economy 
A)  an increase in overall output in the economy 
B)  additional government revenue since overall income will increase 
C)  an actual reduction in equity 
D)  reduced efficiency in the economy

Question 17

What is the term for what you give up to obtain an item?

Accepted Answer

A)  opportunity cost 
B)  implicit cost 
C)  applied cost 
D)  variable cost 
A)  opportunity cost 
B)  implicit cost 
C)  applied cost 
D)  variable cost

Question 18

Which observation was made famous by Adam Smith in his book The Wealth of Nations?

Accepted Answer

A)  There is no such thing as a free lunch. 
B)  People buy more when prices are low than when prices are high. 
C)  People tend to spend more than they earn. 
D)  Markets are guided by an invisible hand that leads to desirable outcomes. 
A)  There is no such thing as a free lunch. 
B)  People buy more when prices are low than when prices are high. 
C)  People tend to spend more than they earn. 
D)  Markets are guided by an invisible hand that leads to desirable outcomes.

Question 19

What did Ralph Nader's book Unsafe at Any Speed cause the U.S. government to require?

Accepted Answer

A)  child booster seats in all new cars 
B)  seat belts in all new cars 
C)  air bags in all new cars 
D)  stricter drunk driving laws 
A)  child booster seats in all new cars 
B)  seat belts in all new cars 
C)  air bags in all new cars 
D)  stricter drunk driving laws

Question 20

What is the best example of a marginal change?

Accepted Answer

A)  College tuition rose by 5% last year. 
B)  Yao gets a big promotion at work. He also gets a raise from $50,000 per year to $80,000 per year. 
C)  Rory graduates from university and takes a job. His income increases from $10,000 per year to $50,000 per year. 
D)  A drought hits Alberta and the price of corn increases from $4.00 per bushel to $6.00 per bushel. 
A)  College tuition rose by 5% last year. 
B)  Yao gets a big promotion at work. He also gets a raise from $50,000 per year to $80,000 per year. 
C)  Rory graduates from university and takes a job. His income increases from $10,000 per year to $50,000 per year. 
D)  A drought hits Alberta and the price of corn increases from $4.00 per bushel to $6.00 per bushel.

In 2018, what was the average Canadian income?

What is the effect of a trade between Canada and Vietnam?

Which business most likely has market power?

A marginal change is a small incremental adjustment to an existing plan of action.

What concept does economics primarily deal with?

Which policy target will NOT affect the combination of inflation and unemployment the economy experiences?

Inflation decreases the value of money.

In most societies, who allocates resources?

What happens when the government prevents prices from adjusting naturally to supply and demand?

What is the definition of productivity?

What concept is illustrated by the adage, "There is no such thing as a free lunch"?

What will happen if an oil refinery does NOT bear the entire cost of the smoke it emits?

When the government attempts to improve equity in an economy, what is often the result?

What is the term for what you give up to obtain an item?

Which observation was made famous by Adam Smith in his book The Wealth of Nations?

What did Ralph Nader's book Unsafe at Any Speed cause the U.S. government to require?

What is the best example of a marginal change?

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

In 2018, what was the average Canadian income?

What is the effect of a trade between Canada and Vietnam?

Which business most likely has market power?

A marginal change is a small incremental adjustment to an existing plan of action.

What concept does economics primarily deal with?

Which policy target will NOT affect the combination of inflation and unemployment the economy experiences?

Inflation decreases the value of money.

In most societies, who allocates resources?

What happens when the government prevents prices from adjusting naturally to supply and demand?

What is the definition of productivity?

What concept is illustrated by the adage, "There is no such thing as a free lunch"?

What will happen if an oil refinery does NOT bear the entire cost of the smoke it emits?

When the government attempts to improve equity in an economy, what is often the result?

What is the term for what you give up to obtain an item?

Which observation was made famous by Adam Smith in his book The Wealth of Nations?

What did Ralph Nader's book Unsafe at Any Speed cause the U.S. government to require?

What is the best example of a marginal change?

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