Question 1

Economists assume that individuals

Accepted Answer

A) behave in unpredictable ways. 
B) will never take actions to help others. 
C) prefer to live in a society that values fairness above all else. 
D) are rational and respond to incentives. 
A) behave in unpredictable ways. 
B) will never take actions to help others. 
C) prefer to live in a society that values fairness above all else. 
D) are rational and respond to incentives.

Question 2

If the marginal cost of producing an extra million kilograms of french fries is $1 million, then McCain Foods Ltd.should produce the extra french fries

Accepted Answer

A) only if the marginal benefit is greater than $1 million plus an acceptable profit margin. 
B) as long as the marginal benefit the firm receives is just equal to or greater than $1 million. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit the firm receives reaches zero. 
A) only if the marginal benefit is greater than $1 million plus an acceptable profit margin. 
B) as long as the marginal benefit the firm receives is just equal to or greater than $1 million. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit the firm receives reaches zero.

Question 3

Optimal decisions are made at the point where marginal cost equals zero.

Accepted Answer

A) True 
 B)False

Question 4

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Accepted Answer

A) collective 
B) cooperative 
C) market 
D) trade-off 
A) collective 
B) cooperative 
C) market 
D) trade-off

Question 5

Which of the following statements about positive economic analysis is false?

Accepted Answer

A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D) Unlike normative economic analysis, positive economic analysis can be tested. 
A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. 
B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. 
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. 
D) Unlike normative economic analysis, positive economic analysis can be tested.

Question 6

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 7

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00 
A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00

Question 8

Which of the following is a positive economic statement?

Accepted Answer

A) People should not buy SUVs. 
B) The government should mandate electric automobiles. 
C) Scarcity necessitates that people make trade-offs. 
D) Foreign workers should not be allowed to work for lower wages than the citizens of a country. 
A) People should not buy SUVs. 
B) The government should mandate electric automobiles. 
C) Scarcity necessitates that people make trade-offs. 
D) Foreign workers should not be allowed to work for lower wages than the citizens of a country.

Question 9

In 2010, Hooverville consumed 205,000 tonnes of sugar.In 2011, sugar consumption rose to 245,000 tonnes.Calculate the percentage change in sugar consumption.

Accepted Answer

A) 8)37% 
B) 11.95% 
C) 19.51% 
D) 26.33% 
A) 8)37% 
B) 11.95% 
C) 19.51% 
D) 26.33%

Question 10

What is equity, and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o

Question 11

Assume that McCain Foods Ltd.can earn an extra $2 million in revenue from producing an extra million kilograms of french fries.What must the addition cost of producing the extra million kilograms of french fries be to make producing them economically rational?

Accepted Answer

The additional cost of produci

Question 12

"The distribution of income should be left to the market" is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a result of a market economy?

Accepted Answer

A) environmental protection 
B) an equal income distribution 
C) agreement on equity 
D) voluntary exchange 
A) environmental protection 
B) an equal income distribution 
C) agreement on equity 
D) voluntary exchange

Question 14

Which of the following is an example of an activity undertaken by an entrepreneur?

Accepted Answer

A) designing your landscaping for your new home 
B) holding a position as the president of a small university 
C) running for Prime Minister of Canada 
D) starting your own pet sitting business 
A) designing your landscaping for your new home 
B) holding a position as the president of a small university 
C) running for Prime Minister of Canada 
D) starting your own pet sitting business

Question 15

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Accepted Answer

A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time 
A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time

Question 16

The extra cost associated with undertaking an activity is called

Accepted Answer

A) net loss. 
B) marginal cost. 
C) opportunity cost. 
D) foregone cost. 
A) net loss. 
B) marginal cost. 
C) opportunity cost. 
D) foregone cost.

Question 17

Which of the following is a macroeconomics question?

Accepted Answer

A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers? 
A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers?

Question 18

Suppose the extra cost of producing an extra million kilograms of french fries is $1 million.Then, McCain Foods Ltd.should make the extra french fries if they generate additional revenue of $1 million.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following questions or statements regarding minimum wage is normative?

Accepted Answer

A) How do changes in minimum wages affect the employment opportunities of teens? 
B) People working in the retail sector deserve higher pay. 
C) What role does the wage play in someone's decision to apply for a job? 
D) Have higher minimum wages caused small businesses to go bankrupt? 
A) How do changes in minimum wages affect the employment opportunities of teens? 
B) People working in the retail sector deserve higher pay. 
C) What role does the wage play in someone's decision to apply for a job? 
D) Have higher minimum wages caused small businesses to go bankrupt?

Question 20

The machines workers have to work with are considered

Accepted Answer

A) human capital. 
B) physical capital. 
C) entrepreneurship. 
D) financial capital. 
A) human capital. 
B) physical capital. 
C) entrepreneurship. 
D) financial capital.

Economists assume that individuals

If the marginal cost of producing an extra million kilograms of french fries is $1 million, then McCain Foods Ltd.should produce the extra french fries

Optimal decisions are made at the point where marginal cost equals zero.

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Which of the following statements about positive economic analysis is false?

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Which of the following is a positive economic statement?

In 2010, Hooverville consumed 205,000 tonnes of sugar.In 2011, sugar consumption rose to 245,000 tonnes.Calculate the percentage change in sugar consumption.

What is equity, and how does it differ from efficiency?

Assume that McCain Foods Ltd.can earn an extra $2 million in revenue from producing an extra million kilograms of french fries.What must the addition cost of producing the extra million kilograms of french fries be to make producing them economically rational?

"The distribution of income should be left to the market" is an example of a positive economic statement.

Which of the following is a result of a market economy?

Which of the following is an example of an activity undertaken by an entrepreneur?

The extra cost associated with undertaking an activity is called

Which of the following is a macroeconomics question?

Suppose the extra cost of producing an extra million kilograms of french fries is $1 million.Then, McCain Foods Ltd.should make the extra french fries if they generate additional revenue of $1 million.

Which of the following questions or statements regarding minimum wage is normative?

The machines workers have to work with are considered

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters

Exam 1: Economics: Foundations and Models

Economists assume that individuals

If the marginal cost of producing an extra million kilograms of french fries is $1 million, then McCain Foods Ltd.should produce the extra french fries

Optimal decisions are made at the point where marginal cost equals zero.

The term ________ in economics refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Which of the following statements about positive economic analysis is false?

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Which of the following is a positive economic statement?

In 2010, Hooverville consumed 205,000 tonnes of sugar.In 2011, sugar consumption rose to 245,000 tonnes.Calculate the percentage change in sugar consumption.

What is equity, and how does it differ from efficiency?

Assume that McCain Foods Ltd.can earn an extra $2 million in revenue from producing an extra million kilograms of french fries.What must the addition cost of producing the extra million kilograms of french fries be to make producing them economically rational?

"The distribution of income should be left to the market" is an example of a positive economic statement.

Which of the following is a result of a market economy?

Which of the following is an example of an activity undertaken by an entrepreneur?

The extra cost associated with undertaking an activity is called

Which of the following is a macroeconomics question?

Suppose the extra cost of producing an extra million kilograms of french fries is $1 million.Then, McCain Foods Ltd.should make the extra french fries if they generate additional revenue of $1 million.

Which of the following questions or statements regarding minimum wage is normative?

The machines workers have to work with are considered

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters