Question 1

Which of the following is NOT a factor of production?

Accepted Answer

A)  entrepreneurship 
B)  private property rights 
C)  land 
D)  capital 
A)  entrepreneurship 
B)  private property rights 
C)  land 
D)  capital

Question 2

Why is the ceteris paribus assumption important?

Accepted Answer

A)  It allows one to separate normative economic issues from positive economic ones. 
B)  It allows one to analyze the relationship between two variables apart from the influence of other variables. 
C)  It allows one to hold all variables constant so the economy can be carefully observed in a suspended state. 
D)  It allows one to generalize from the whole to the individual. 
A)  It allows one to separate normative economic issues from positive economic ones. 
B)  It allows one to analyze the relationship between two variables apart from the influence of other variables. 
C)  It allows one to hold all variables constant so the economy can be carefully observed in a suspended state. 
D)  It allows one to generalize from the whole to the individual.

Question 3

What is economics most concerned with?

Accepted Answer

A)  how to reduce inflation 
B)  how to profit from trading in the stock market 
C)  studying how we allocate scarce resources to satisfy unlimited wants 
D)  government taxation and spending 
A)  how to reduce inflation 
B)  how to profit from trading in the stock market 
C)  studying how we allocate scarce resources to satisfy unlimited wants 
D)  government taxation and spending

Question 4

In what way can additions to human capital be made?

Accepted Answer

A)  through increases in the general population of an area 
B)  through improved education and on-the-job training 
C)  through monthly deposits into a savings account 
D)  through the purchase of tools and equipment by workers 
A)  through increases in the general population of an area 
B)  through improved education and on-the-job training 
C)  through monthly deposits into a savings account 
D)  through the purchase of tools and equipment by workers

Question 5

How do microeconomics and macroeconomics differ?

Accepted Answer

A)  Microeconomics is concerned with consumer behaviour, while macroeconomics is concerned with firm behaviour. 
B)  Microeconomics utilizes positive economic analysis, while macroeconomics utilizes normative economic analysis. 
C)  Microeconomics studies aggregate decision making, while macroeconomics examines individual decision making. 
D)  Microeconomics studies individual decision making, while macroeconomics examines aggregate decision making. 
A)  Microeconomics is concerned with consumer behaviour, while macroeconomics is concerned with firm behaviour. 
B)  Microeconomics utilizes positive economic analysis, while macroeconomics utilizes normative economic analysis. 
C)  Microeconomics studies aggregate decision making, while macroeconomics examines individual decision making. 
D)  Microeconomics studies individual decision making, while macroeconomics examines aggregate decision making.

Question 6

What problem is caused when not all human wants can be satisfied with current resources and technology?

Accepted Answer

A)  scarcity 
B)  normative economics 
C)  the fallacy of composition 
D)  ceteris paribus 
A)  scarcity 
B)  normative economics 
C)  the fallacy of composition 
D)  ceteris paribus

Question 7

In order to acquire more of a good we must sacrifice production of another good (because resources are in limited supply). What concept is this an illustration of?

Accepted Answer

A)  ceteris paribus 
B)  specialization 
C)  opportunity cost 
D)  exchange 
A)  ceteris paribus 
B)  specialization 
C)  opportunity cost 
D)  exchange

Question 8

Which of the following statements best describes the idea of opportunity cost and writing a test?

Accepted Answer

A)  There is no opportunity cost of writing a test because it only applies to people that are working. 
B)  There is no opportunity cost of writing a test because they are so important. 
C)  The opportunity cost of writing a test is the wages given up from not working plus the loss of time studying for another test. 
D)  The opportunity cost of writing a test is the time given up for doing an important assignment for another class. 
A)  There is no opportunity cost of writing a test because it only applies to people that are working. 
B)  There is no opportunity cost of writing a test because they are so important. 
C)  The opportunity cost of writing a test is the wages given up from not working plus the loss of time studying for another test. 
D)  The opportunity cost of writing a test is the time given up for doing an important assignment for another class.

Question 9

Which of the following is NOT a factor of production?

Accepted Answer

A)  entrepreneurship 
B)  capital 
C)  legal institutions 
D)  labour 
A)  entrepreneurship 
B)  capital 
C)  legal institutions 
D)  labour

Question 10

What is the term for the branch of economics that studies the economy as a whole?

Accepted Answer

A)  positive economics 
B)  microeconomics 
C)  normative economics 
D)  macroeconomics 
A)  positive economics 
B)  microeconomics 
C)  normative economics 
D)  macroeconomics

Question 11

Which of the following statements best illustrates the fallacy of composition?

Accepted Answer

A)  the error of omitting relevant variables from an economic model 
B)  the error of confusing normative economics with positive economics 
C)  the error of generalizing from the individual to the whole 
D)  the error of confusing correlation with causation 
A)  the error of omitting relevant variables from an economic model 
B)  the error of confusing normative economics with positive economics 
C)  the error of generalizing from the individual to the whole 
D)  the error of confusing correlation with causation

Question 12

Which of the following statements about rational choices is the most accurate?

Accepted Answer

A)  They can only be made by comparing opportunity cost with the marginal cost. 
B)  They are made based on expectations of the additional benefits and additional costs involved. 
C)  They are based on a comparison of total benefits and total costs. 
D)  They measure benefits based on the past. 
A)  They can only be made by comparing opportunity cost with the marginal cost. 
B)  They are made based on expectations of the additional benefits and additional costs involved. 
C)  They are based on a comparison of total benefits and total costs. 
D)  They measure benefits based on the past.

Question 13

What does the term "ceteris paribus" mean?

Accepted Answer

A)  Everything is variable. 
B)  What is True for the individual is not necessarily True for the whole. 
C)  All variables except those specified are constant. 
D)  No one knows which variables will change and which will remain constant. 
A)  Everything is variable. 
B)  What is True for the individual is not necessarily True for the whole. 
C)  All variables except those specified are constant. 
D)  No one knows which variables will change and which will remain constant.

Question 14

If you were an employer, what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Accepted Answer

An employer might provide on-site traini

Question 15

Which of the following best characterizes marginal thinking?

Accepted Answer

A)  comparing the total benefit and total cost of two desserts when deciding whether or not to enjoy a second dessert 
B)  the rule of rational choice 
C)  calculating the ratio of the total benefit of an activity to the total cost of that activity 
D)  people wanting to make themselves better off 
A)  comparing the total benefit and total cost of two desserts when deciding whether or not to enjoy a second dessert 
B)  the rule of rational choice 
C)  calculating the ratio of the total benefit of an activity to the total cost of that activity 
D)  people wanting to make themselves better off

Question 16

What is the difference between a hypothesis and a theory?

Accepted Answer

A hypothesis about behaviour is the firs

Question 17

What does scarcity result from?

Accepted Answer

A)  government decision making 
B)  positive economics 
C)  wants that exceed the resources necessary to provide them 
D)  inappropriate normative judgments 
A)  government decision making 
B)  positive economics 
C)  wants that exceed the resources necessary to provide them 
D)  inappropriate normative judgments

Question 18

What is a time-series graph and what does it show?

Accepted Answer

A time-series graph shows chan

Question 19

What is the central concern of economics?

Accepted Answer

A)  how to regulate the supply of money 
B)  how to reduce the wants of individuals, businesses, and government 
C)  how to find more resources to satisfy everyone's wants 
D)  how to make the best use of scarce resources to satisfy our unlimited wants 
A)  how to regulate the supply of money 
B)  how to reduce the wants of individuals, businesses, and government 
C)  how to find more resources to satisfy everyone's wants 
D)  how to make the best use of scarce resources to satisfy our unlimited wants

Question 20

Since it is possible to grow coffee in the greenhouses in Canada, we should clearly create a Canadian coffee industry and no longer import coffee from Brazil.

Accepted Answer

A) True 
 B)False

Which of the following is NOT a factor of production?

Why is the ceteris paribus assumption important?

What is economics most concerned with?

In what way can additions to human capital be made?

How do microeconomics and macroeconomics differ?

What problem is caused when not all human wants can be satisfied with current resources and technology?

In order to acquire more of a good we must sacrifice production of another good (because resources are in limited supply). What concept is this an illustration of?

Which of the following statements best describes the idea of opportunity cost and writing a test?

Which of the following is NOT a factor of production?

What is the term for the branch of economics that studies the economy as a whole?

Which of the following statements best illustrates the fallacy of composition?

Which of the following statements about rational choices is the most accurate?

What does the term "ceteris paribus" mean?

If you were an employer, what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Which of the following best characterizes marginal thinking?

What is the difference between a hypothesis and a theory?

What does scarcity result from?

What is a time-series graph and what does it show?

What is the central concern of economics?

Since it is possible to grow coffee in the greenhouses in Canada, we should clearly create a Canadian coffee industry and no longer import coffee from Brazil.

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 NOT a factor of production?

Why is the ceteris paribus assumption important?

What is economics most concerned with?

In what way can additions to human capital be made?

How do microeconomics and macroeconomics differ?

What problem is caused when not all human wants can be satisfied with current resources and technology?

In order to acquire more of a good we must sacrifice production of another good (because resources are in limited supply). What concept is this an illustration of?

Which of the following statements best describes the idea of opportunity cost and writing a test?

Which of the following is NOT a factor of production?

What is the term for the branch of economics that studies the economy as a whole?

Which of the following statements best illustrates the fallacy of composition?

Which of the following statements about rational choices is the most accurate?

What does the term "ceteris paribus" mean?

If you were an employer, what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Which of the following best characterizes marginal thinking?

What is the difference between a hypothesis and a theory?

What does scarcity result from?

What is a time-series graph and what does it show?

What is the central concern of economics?

Since it is possible to grow coffee in the greenhouses in Canada, we should clearly create a Canadian coffee industry and no longer import coffee from Brazil.

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