Question 1

Which of the following is an example of a capital resource?

Accepted Answer

A)  an oil rig 
B)  unskilled labour 
C)  pine trees 
D)  stocks and bonds 
A)  an oil rig 
B)  unskilled labour 
C)  pine trees 
D)  stocks and bonds

Question 2

Which of the following is an example of a positive incentive?

Accepted Answer

A)  You expect to receive a scholarship if your grades remain high. 
B)  Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
C)  Campus police institute a policy of impounding cars parked in delivery-zone spaces. 
D)  You expect to be grounded if your grades slip below a "B" average. 
A)  You expect to receive a scholarship if your grades remain high. 
B)  Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
C)  Campus police institute a policy of impounding cars parked in delivery-zone spaces. 
D)  You expect to be grounded if your grades slip below a "B" average.

Question 3

What happens to us because of scarcity?

Accepted Answer

A)  We can obtain more of a desirable good without sacrificing other goods and services. 
B)  We face shortages of goods that prevail at current market prices. 
C)  We must sacrifice valuable alternatives to obtain more goods and services we desire. 
D)  We have an opportunity cost of consumption which is zero. 
A)  We can obtain more of a desirable good without sacrificing other goods and services. 
B)  We face shortages of goods that prevail at current market prices. 
C)  We must sacrifice valuable alternatives to obtain more goods and services we desire. 
D)  We have an opportunity cost of consumption which is zero.

Question 4

Indicate whether each of the following is a positive or normative economic statement:
I. The imposition of a price ceiling below equilibrium price will lead to a shortage of housing.
II. The local government should control the rate of increase in rents so that low-income residents are not forced to move from the area.

Accepted Answer

Statement I is a positive econ

Question 5

What is economics the study of?

Accepted Answer

A)  how people deal with limited human wants 
B)  how people cope with fluctuations in stock prices 
C)  how people deal with greed 
D)  how people cope with limited resources 
A)  how people deal with limited human wants 
B)  how people cope with fluctuations in stock prices 
C)  how people deal with greed 
D)  how people cope with limited resources

Question 6

What occurs when a person possesses a comparative advantage in the production of one good or service?

Accepted Answer

A)  It promotes greater self-sufficiency. 
B)  It permits gains from trade to be realized due to a more efficient use of resources. 
C)  It discourages specialization. 
D)  The person's opportunity cost becomes higher than for that of other goods. 
A)  It promotes greater self-sufficiency. 
B)  It permits gains from trade to be realized due to a more efficient use of resources. 
C)  It discourages specialization. 
D)  The person's opportunity cost becomes higher than for that of other goods.

Question 7

Which of the following statements most likely lies within the realm of macroeconomics?

Accepted Answer

A)  Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
B)  Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
C)  An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
D)  Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. 
A)  Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
B)  Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
C)  An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
D)  Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

Question 8

Which of the following does the market place NOT determine?

Accepted Answer

A)  equity 
B)  price 
C)  distribution 
D)  production quantity 
A)  equity 
B)  price 
C)  distribution 
D)  production quantity

Question 9

Why is it important to be able to distinguish positive from normative statements about economic policy?

Accepted Answer

A)  Positive statements are always True and are the basis of economic policy while normative statements are False and should never be used. 
B)  Positive statements help us understand the good results of a policy change, and normative statements help us understand the negative results. 
C)  Positive statements help us understand the value judgements towards a particular policy, while normative statements reflect the economy's response. 
D)  Positive statements help us understand the economy's response to a particular policy, while normative statements reflect value judgments. 
A)  Positive statements are always True and are the basis of economic policy while normative statements are False and should never be used. 
B)  Positive statements help us understand the good results of a policy change, and normative statements help us understand the negative results. 
C)  Positive statements help us understand the value judgements towards a particular policy, while normative statements reflect the economy's response. 
D)  Positive statements help us understand the economy's response to a particular policy, while normative statements reflect value judgments.

Question 10

Which topic does macroeconomics usually NOT include?

Accepted Answer

A)  the rate of unemployment 
B)  the rate of inflation 
C)  the profit maximizing decisions of an individual manufacturer 
D)  economic growth 
A)  the rate of unemployment 
B)  the rate of inflation 
C)  the profit maximizing decisions of an individual manufacturer 
D)  economic growth

Question 11

The marginal benefit to a consumer of DVD rentals:
TABLE 1-3
  
-Refer to Table 1-3. If the price of a DVD rental is $4, how many DVDs will a consumer following the rule of rational choice rent per month?

Accepted Answer

A)  2 DVDs 
B)  3 DVDs 
C)  4 DVDs 
D)  5 DVDs 
A)  2 DVDs 
B)  3 DVDs 
C)  4 DVDs 
D)  5 DVDs

Question 12

"The president of the world's biggest polluter (the United States) needs to do more than propose well-intentioned but insufficient measures that amount to using a squirt gun to quell a raging fire." Is this a positive or a normative economic statement? Explain your answer.

Accepted Answer

This statement is normative. T

Question 13

Why do economists need to develop abstractions?

Accepted Answer

A)  to avoid analyzing real-world economic interactions, which are too complicated to understand 
B)  to understand and explain economic behaviour 
C)  to avoid committing the fallacy of composition 
D)  to distinguish normative economic behaviour from positive economic behaviour 
A)  to avoid analyzing real-world economic interactions, which are too complicated to understand 
B)  to understand and explain economic behaviour 
C)  to avoid committing the fallacy of composition 
D)  to distinguish normative economic behaviour from positive economic behaviour

Question 14

Scarcity is a problem faced by all but the wealthiest of citizens.

Accepted Answer

A) True 
 B)False

Question 15

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre. In order for the hypothesis to become a theory, it would have to be tested. Which of the following observations would seem to support this hypothesis?

Accepted Answer

A)  Individuals buy less gas because they are purchasing more fuel-efficient vehicles. 
B)  Gasoline consumption varies with the quantity of cars purchased in each region. 
C)  Individuals in each region respond to an increase in price by purchasing less gasoline. 
D)  People in each region buy the same amount of gasoline regardless of the price. 
A)  Individuals buy less gas because they are purchasing more fuel-efficient vehicles. 
B)  Gasoline consumption varies with the quantity of cars purchased in each region. 
C)  Individuals in each region respond to an increase in price by purchasing less gasoline. 
D)  People in each region buy the same amount of gasoline regardless of the price.

Question 16

Small, developing countries must first become self-sufficient before they can benefit from international trade.

Accepted Answer

A) True 
 B)False

Question 17

Identify the error in judgment in each of the following statements:
I. "If you leave a concert during the encore, you will avoid traffic and get home more rapidly; therefore, everyone should leave during the encore."
II. "Whenever I wear my lucky baseball cap to an exam, I receive an "A." My baseball cap must induce the teacher to give me good grades."

Accepted Answer

Statement I is an example of t

Question 18

Under what circumstance does a country specialize in order to use resources more efficiently?

Accepted Answer

A)  when there is comparative advantage in production 
B)  when there is an absolute advantage in production 
C)  when there is disincentive to trade with others 
D)  when there is a higher opportunity cost to trade with others 
A)  when there is comparative advantage in production 
B)  when there is an absolute advantage in production 
C)  when there is disincentive to trade with others 
D)  when there is a higher opportunity cost to trade with others

Question 19

How does microeconomics relate to macroeconomics?

Accepted Answer

Microeconomics primarily examines the be

Question 20

What is the difference between a positive economic statement and a normative one?

Accepted Answer

A)  Positive economic statements are descriptive in nature, while normative economic statements are quantitative. 
B)  Positive economic statements are used to explain economic behaviour, while normative economic statements are used to predict economic behaviour. 
C)  Positive economic statements are descriptive in nature, while normative economic statements involve value judgments. 
D)  Positive economic statements involve value judgments, while normative economic statements are descriptive in nature. 
A)  Positive economic statements are descriptive in nature, while normative economic statements are quantitative. 
B)  Positive economic statements are used to explain economic behaviour, while normative economic statements are used to predict economic behaviour. 
C)  Positive economic statements are descriptive in nature, while normative economic statements involve value judgments. 
D)  Positive economic statements involve value judgments, while normative economic statements are descriptive in nature.

Which of the following is an example of a capital resource?

Which of the following is an example of a positive incentive?

What happens to us because of scarcity?

What is economics the study of?

What occurs when a person possesses a comparative advantage in the production of one good or service?

Which of the following statements most likely lies within the realm of macroeconomics?

Which of the following does the market place NOT determine?

Why is it important to be able to distinguish positive from normative statements about economic policy?

Which topic does macroeconomics usually NOT include?

The marginal benefit to a consumer of DVD rentals: TABLE 1-3 -Refer to Table 1-3. If the price of a DVD rental is $4, how many DVDs will a consumer following the rule of rational choice rent per month?

"The president of the world's biggest polluter (the United States) needs to do more than propose well-intentioned but insufficient measures that amount to using a squirt gun to quell a raging fire." Is this a positive or a normative economic statement? Explain your answer.

Why do economists need to develop abstractions?

Scarcity is a problem faced by all but the wealthiest of citizens.

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre. In order for the hypothesis to become a theory, it would have to be tested. Which of the following observations would seem to support this hypothesis?

Small, developing countries must first become self-sufficient before they can benefit from international trade.

Under what circumstance does a country specialize in order to use resources more efficiently?

How does microeconomics relate to macroeconomics?

What is the difference between a positive economic statement and a normative one?

Scarcity, Trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters

Exam 1: The Role and Method of Economics

Which of the following is an example of a capital resource?

Which of the following is an example of a positive incentive?

What happens to us because of scarcity?

What is economics the study of?

What occurs when a person possesses a comparative advantage in the production of one good or service?

Which of the following statements most likely lies within the realm of macroeconomics?

Which of the following does the market place NOT determine?

Why is it important to be able to distinguish positive from normative statements about economic policy?

Which topic does macroeconomics usually NOT include?

The marginal benefit to a consumer of DVD rentals: TABLE 1-3 -Refer to Table 1-3. If the price of a DVD rental is $4, how many DVDs will a consumer following the rule of rational choice rent per month?

"The president of the world's biggest polluter (the United States) needs to do more than propose well-intentioned but insufficient measures that amount to using a squirt gun to quell a raging fire." Is this a positive or a normative economic statement? Explain your answer.

Why do economists need to develop abstractions?

Scarcity is a problem faced by all but the wealthiest of citizens.

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre. In order for the hypothesis to become a theory, it would have to be tested. Which of the following observations would seem to support this hypothesis?

Small, developing countries must first become self-sufficient before they can benefit from international trade.

Under what circumstance does a country specialize in order to use resources more efficiently?

How does microeconomics relate to macroeconomics?

What is the difference between a positive economic statement and a normative one?

Scarcity, Trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Elasticity

Market Efficiency and Market Failure

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labour Markets and the Distribution of Income

The Environment

Filters