Question 1

What is the definition of marginal benefit?

Accepted Answer

A) the cost of an increase in an activity 
B) the sum of benefit and cost that arises from an increase in an activity 
C) the cost of a decrease in an activity 
D) the benefit that arises from an increase in an activity 
E) the benefit that arises from a decrease in an activity 
A) the cost of an increase in an activity 
B) the sum of benefit and cost that arises from an increase in an activity 
C) the cost of a decrease in an activity 
D) the benefit that arises from an increase in an activity 
E) the benefit that arises from a decrease in an activity

Question 2

Complete the following sentence.Capital is

Accepted Answer

A) money in the bank. 
B) "gifts of nature." 
C) tools, instruments, machines, buildings, and other constructions that businesses use to produce goods and services. 
D) land. 
E) stocks and bonds. 
A) money in the bank. 
B) "gifts of nature." 
C) tools, instruments, machines, buildings, and other constructions that businesses use to produce goods and services. 
D) land. 
E) stocks and bonds.

Question 3

Sue,who has a law degree,earns $200,000 a year,while Chris,a high-school dropout,earns $5.00 an hour.This is an example of an economy facing the ________ question.

Accepted Answer

A) "what" 
B) "how" 
C) "for whom" 
D) "where" 
E) "when" 
A) "what" 
B) "how" 
C) "for whom" 
D) "where" 
E) "when"

Question 4

Which one of the following is labour?

Accepted Answer

A) money 
B) a carpenter's hammer 
C) a shoe factory 
D) a bread-slicing machine 
E) a singer's voice 
A) money 
B) a carpenter's hammer 
C) a shoe factory 
D) a bread-slicing machine 
E) a singer's voice

Question 5

Which of the following statements are true regarding "positive" statements?
I.They describe what "ought to be."
II.They describe what is believed about how the world appears.
III.They can be tested as to their truthfulness.

Accepted Answer

A) I and II 
B) II and III 
C) I and III 
D) I, II and III 
E) None of the statements are true. 
A) I and II 
B) II and III 
C) I and III 
D) I, II and III 
E) None of the statements are true.

Question 6

To make choices,people must

Accepted Answer

A) be able to carry out complex mathematical calculations. 
B) have unlimited resources. 
C) be free from government constraint. 
D) have unlimited access to information at no cost. 
E) evaluate the values of alternative actions. 
A) be able to carry out complex mathematical calculations. 
B) have unlimited resources. 
C) be free from government constraint. 
D) have unlimited access to information at no cost. 
E) evaluate the values of alternative actions.

Question 7

Complete the following sentence.Financial capital is

Accepted Answer

A) one of the "gifts of nature." 
B) the tools and machines that are used to produce goods and services. 
C) money, stocks, and bonds. 
D) used in the production of goods and services. 
E) land. 
A) one of the "gifts of nature." 
B) the tools and machines that are used to produce goods and services. 
C) money, stocks, and bonds. 
D) used in the production of goods and services. 
E) land.

Question 8

Use the table below to answer the following questions.
Table 1A.3.3
  
-Refer to Table 1A.3.3.When x equals 5,the slope is

Accepted Answer

A) 5. 
B) -2. 
C) +2. 
D) 0. 
E) infinite. 
A) 5. 
B) -2. 
C) +2. 
D) 0. 
E) infinite.

Question 9

When a firm decides to produce more hybrid cars and fewer gas guzzlers,it is answering the ________ question.

Accepted Answer

A) "how" 
B) "what" 
C) "who" 
D) "where" 
E) "when" 
A) "how" 
B) "what" 
C) "who" 
D) "where" 
E) "when"

Question 10

If variables x and y move up and down together,they are

Accepted Answer

A) positively related. 
B) negatively related. 
C) conversely related. 
D) unrelated. 
E) trendy. 
A) positively related. 
B) negatively related. 
C) conversely related. 
D) unrelated. 
E) trendy.

Question 11

Use the figure below to answer the following question.
   
Figure 1A.2.1
-Refer to Figure 1A.2.1.If x decreases from 5 to 4,y

Accepted Answer

A) decreases from 4 to 3. 
B) decreases from 4 to 3 1/2. 
C) decreases from 4 to 2. 
D) increases from 4 to 5. 
E) increases from 3 1/2 to 4. 
A) decreases from 4 to 3. 
B) decreases from 4 to 3 1/2. 
C) decreases from 4 to 2. 
D) increases from 4 to 5. 
E) increases from 3 1/2 to 4.

Question 12

An incentive ________.

Accepted Answer

A) could be a reward but could not be a penalty 
B) could be a penalty but could not be a reward 
C) could be either a reward or a penalty 
D) is the opposite of a tradeoff 
E) occurs in the macroeconomy but not in the microeconomy 
A) could be a reward but could not be a penalty 
B) could be a penalty but could not be a reward 
C) could be either a reward or a penalty 
D) is the opposite of a tradeoff 
E) occurs in the macroeconomy but not in the microeconomy

Question 13

Use the figure below to answer the following questions.
   
Figure 1A.3.9
-Refer to Figure 1A.3.9.Which one of the graphs shows a line with a zero slope?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (a), (b), and (c) 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (a), (b), and (c)

Question 14

The two big economic questions

Accepted Answer

A) summarize the scope of economics. 
B) are "what goods and services are produced?" and "how are goods and services produced?" 
C) have nothing to do with goods and services. 
D) do not consider for whom goods and services are produced. 
E) have nothing to do with the way goods and services are produced. 
A) summarize the scope of economics. 
B) are "what goods and services are produced?" and "how are goods and services produced?" 
C) have nothing to do with goods and services. 
D) do not consider for whom goods and services are produced. 
E) have nothing to do with the way goods and services are produced.

Question 15

Model A is superior to model B if

Accepted Answer

A) it contains more real world detail than model B. 
B) it contains fewer unrealistic assumptions than model B. 
C) its predictions correspond more closely to the facts than the predictions of model B. 
D) it is preferred by a majority of researchers in a public opinion poll. 
E) it is scientifically "elegant." 
A) it contains more real world detail than model B. 
B) it contains fewer unrealistic assumptions than model B. 
C) its predictions correspond more closely to the facts than the predictions of model B. 
D) it is preferred by a majority of researchers in a public opinion poll. 
E) it is scientifically "elegant."

Question 16

Use the figure below to answer the following questions.
   
Figure 1A.1.5
-Refer to Figure 1A.1.5.Which graph or graphs indicates a negative relationship between x and y?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d) 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d)

Question 17

During the next hour John can choose one of the following three activities: playing basketball,watching television,or reading a book.The opportunity cost of reading a book

Accepted Answer

A) depends on how much the book cost when it was purchased. 
B) is the value of playing basketball if John prefers that to watching television. 
C) is the value of playing basketball and the value of watching television. 
D) depends on how much John enjoys the book. 
E) is the value of watching television if John prefers playing basketball to watching television. 
A) depends on how much the book cost when it was purchased. 
B) is the value of playing basketball if John prefers that to watching television. 
C) is the value of playing basketball and the value of watching television. 
D) depends on how much John enjoys the book. 
E) is the value of watching television if John prefers playing basketball to watching television.

Question 18

Use the figure below to answer the following questions.
   
Figure 1A.3.5
-Refer to Figure 1A.3.5.In Figure 1A.3.5,the slope across arc CD is

Accepted Answer

A) 1/2. 
B) 1. 
C) -1/2. 
D) -1. 
E) -5/8. 
A) 1/2. 
B) 1. 
C) -1/2. 
D) -1. 
E) -5/8.

Question 19

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers,she is choosing at the margin when she compares ________.

Accepted Answer

A) the total revenue from sales of printers to the total cost of producing all the printers 
B) the extra revenue from selling a few additional printers to the extra costs of producing the printers 
C) the extra revenue from selling a few additional printers to the average cost of producing the additional printers 
D) the revenue from selling HP's printers as compared to printers from competing companies, such as Lexmark 
E) the cost of producing HP's printers as compared to printers from competing companies, such as Lexmark 
A) the total revenue from sales of printers to the total cost of producing all the printers 
B) the extra revenue from selling a few additional printers to the extra costs of producing the printers 
C) the extra revenue from selling a few additional printers to the average cost of producing the additional printers 
D) the revenue from selling HP's printers as compared to printers from competing companies, such as Lexmark 
E) the cost of producing HP's printers as compared to printers from competing companies, such as Lexmark

Question 20

The branch of economics that studies the choices of individuals and businesses is

Accepted Answer

A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics. 
E) social economics. 
A) macroeconomics. 
B) microeconomics. 
C) positive economics. 
D) normative economics. 
E) social economics.

Exam 1: What Is Economics?

What is the definition of marginal benefit?

Complete the following sentence.Capital is

Sue,who has a law degree,earns $200,000 a year,while Chris,a high-school dropout,earns $5.00 an hour.This is an example of an economy facing the ________ question.

Which one of the following is labour?

Which of the following statements are true regarding "positive" statements? I.They describe what "ought to be." II.They describe what is believed about how the world appears. III.They can be tested as to their truthfulness.

To make choices,people must

Complete the following sentence.Financial capital is

Use the table below to answer the following questions. Table 1A.3.3 -Refer to Table 1A.3.3.When x equals 5,the slope is

When a firm decides to produce more hybrid cars and fewer gas guzzlers,it is answering the ________ question.

If variables x and y move up and down together,they are

Use the figure below to answer the following question. Figure 1A.2.1 -Refer to Figure 1A.2.1.If x decreases from 5 to 4,y

An incentive ________.

Use the figure below to answer the following questions. Figure 1A.3.9 -Refer to Figure 1A.3.9.Which one of the graphs shows a line with a zero slope?

The two big economic questions

Model A is superior to model B if

Use the figure below to answer the following questions. Figure 1A.1.5 -Refer to Figure 1A.1.5.Which graph or graphs indicates a negative relationship between x and y?

During the next hour John can choose one of the following three activities: playing basketball,watching television,or reading a book.The opportunity cost of reading a book

Use the figure below to answer the following questions. Figure 1A.3.5 -Refer to Figure 1A.3.5.In Figure 1A.3.5,the slope across arc CD is

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers,she is choosing at the margin when she compares ________.

The branch of economics that studies the choices of individuals and businesses is

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

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