Question 1

According to Adam Smith,what is the success of decentralized market economies primarily due to

Accepted Answer

A) the basic benevolence of society 
B) society's justice (legal) system 
C) individuals' self-interest 
D) basic human survival instincts 
A) the basic benevolence of society 
B) society's justice (legal) system 
C) individuals' self-interest 
D) basic human survival instincts

Question 2

How could you justify higher income tax rates on rich people in Canada

Accepted Answer

A) on the basis of market efficiency 
B) on the basis of the lack of other sources of government revenue 
C) on the basis of equity for society 
D) on the basis of government bias against the wealthy 
A) on the basis of market efficiency 
B) on the basis of the lack of other sources of government revenue 
C) on the basis of equity for society 
D) on the basis of government bias against the wealthy

Question 3

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 10 months per year.

Accepted Answer

The concept of working longer per year w

Question 4

What could policymakers do to raise productivity

Accepted Answer

A) increase spending on education 
B) lower tax credits to firms for capital improvements 
C) reduce the number of imports allowed into the economy 
D) eliminate minimum wage laws 
A) increase spending on education 
B) lower tax credits to firms for capital improvements 
C) reduce the number of imports allowed into the economy 
D) eliminate minimum wage laws

Question 5

What are two very likely reasons for a government to intervene in a market

Accepted Answer

A) to promote stability and to raise revenues 
B) to promote equity and to promote efficiency 
C) to promote equity and to promote stability 
D) to promote efficiency and to raise revenues 
A) to promote stability and to raise revenues 
B) to promote equity and to promote efficiency 
C) to promote equity and to promote stability 
D) to promote efficiency and to raise revenues

Question 6

Government spending is the primary source of inflation.

Accepted Answer

A) True 
 B)False

Question 7

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

Accepted Answer

A) lower the price of the remaining donuts even if the price falls below $2.00 
B) lower the price of the remaining donuts as long as it's more than $2.00 
C) lower the price on all donuts so they will all be sold earlier in the day 
D) donate them to the local Food Bank and produce ten fewer dozen tomorrow 
A) lower the price of the remaining donuts even if the price falls below $2.00 
B) lower the price of the remaining donuts as long as it's more than $2.00 
C) lower the price on all donuts so they will all be sold earlier in the day 
D) donate them to the local Food Bank and produce ten fewer dozen tomorrow

Question 8

What does the saying "There is no such thing as a free lunch" mean

Accepted Answer

A) Even people on welfare have to pay for food. 
B) The cost of living is always increasing. 
C) To get something we like, we usually have to give up another thing we like. 
D) All costs are included in the price of a product. 
A) Even people on welfare have to pay for food. 
B) The cost of living is always increasing. 
C) To get something we like, we usually have to give up another thing we like. 
D) All costs are included in the price of a product.

Question 9

Which of these consumption activities will most likely impose an external cost

Accepted Answer

A) an executive plays a vigorous game of golf 
B) a student in a dorm plays a YouTube video at 120 decibels late at night 
C) a young mother exercises to a yoga video 
D) a construction worker eats a sandwich during his lunch break 
A) an executive plays a vigorous game of golf 
B) a student in a dorm plays a YouTube video at 120 decibels late at night 
C) a young mother exercises to a yoga video 
D) a construction worker eats a sandwich during his lunch break

Question 10

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 11

What does efficiency mean

Accepted Answer

A) Society is conserving resources in order to save them for the future. 
B) Society's goods and services are distributed fairly among society's members. 
C) Society has lessened its dependence on non-renewable energy sources. 
D) Society is getting the most it can from its scarce resources. 
A) Society is conserving resources in order to save them for the future. 
B) Society's goods and services are distributed fairly among society's members. 
C) Society has lessened its dependence on non-renewable energy sources. 
D) Society is getting the most it can from its scarce resources.

Question 12

To what extent does the invisible hand model of a market ensure equity and efficiency

Accepted Answer

A) The invisible hand always ensures both equity and efficiency. 
B) The invisible hand cannot ensure either equity or efficiency. 
C) The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D) The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. 
A) The invisible hand always ensures both equity and efficiency. 
B) The invisible hand cannot ensure either equity or efficiency. 
C) The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D) The invisible hand is more effective at ensuring equity than it is at ensuring efficiency.

Question 13

What causes almost all variation in living standards in different countries

Accepted Answer

A) population growth rates 
B) endowments of natural resources 
C) proximity to foreign markets 
D) productivity 
A) population growth rates 
B) endowments of natural resources 
C) proximity to foreign markets 
D) productivity

Question 14

What is the best example of a marginal change

Accepted Answer

A) After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. 
B) Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. 
C) Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D) A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles. 
A) After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. 
B) Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. 
C) Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D) A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles.

Question 15

Define opportunity cost.What is the opportunity cost to you of attending university
 What was your opportunity cost of coming to class today

Accepted Answer

Whatever must be given up to obtain some

Question 16

Daniel decides to spend the last two hours of the night before his economics exam studying instead of sleeping.For Daniel,what would his tradeoff be

Accepted Answer

A) nothing, because no dollar value can be put on sleep 
B) nothing, because studying would be more beneficial than sleep 
C) the six hours of sleep he could have had if he had gone to bed before midnight 
D) the two hours of rest he would have gotten 
A) nothing, because no dollar value can be put on sleep 
B) nothing, because studying would be more beneficial than sleep 
C) the six hours of sleep he could have had if he had gone to bed before midnight 
D) the two hours of rest he would have gotten

Question 17

When the government redistributes income from the rich to the poor,what is the result

Accepted Answer

A) Efficiency is improved, but equity is not. 
B) Both rich people and poor people benefit directly. 
C) People work less and produce fewer goods and services. 
D) Rich people consume fewer goods, but poor people consume more goods, resulting in no real change. 
A) Efficiency is improved, but equity is not. 
B) Both rich people and poor people benefit directly. 
C) People work less and produce fewer goods and services. 
D) Rich people consume fewer goods, but poor people consume more goods, resulting in no real change.

Question 18

What is the opportunity cost of going to university

Accepted Answer

A) the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B) the value of the best opportunity a student gives up to attend university 
C) zero, for students who are fortunate enough to attend on a scholarship 
D) zero, because a college education will allow a student to earn a larger income after graduation 
A) the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B) the value of the best opportunity a student gives up to attend university 
C) zero, for students who are fortunate enough to attend on a scholarship 
D) zero, because a college education will allow a student to earn a larger income after graduation

According to Adam Smith,what is the success of decentralized market economies primarily due to

How could you justify higher income tax rates on rich people in Canada

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 10 months per year.

What could policymakers do to raise productivity

What are two very likely reasons for a government to intervene in a market

Government spending is the primary source of inflation.

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

What does the saying "There is no such thing as a free lunch" mean

Which of these consumption activities will most likely impose an external cost

What does efficiency mean

To what extent does the invisible hand model of a market ensure equity and efficiency

What causes almost all variation in living standards in different countries

What is the best example of a marginal change

Define opportunity cost.What is the opportunity cost to you of attending university What was your opportunity cost of coming to class today

Daniel decides to spend the last two hours of the night before his economics exam studying instead of sleeping.For Daniel,what would his tradeoff be

When the government redistributes income from the rich to the poor,what is the result

What is the opportunity cost of going to university

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Exam 1: Ten Principles of Economics

According to Adam Smith,what is the success of decentralized market economies primarily due to

How could you justify higher income tax rates on rich people in Canada

With the understanding that people respond to incentives,outline the possible outcome for teachers if the K-12 school year is extended to 11 months per year instead of the existing 10 months per year.

What could policymakers do to raise productivity

What are two very likely reasons for a government to intervene in a market

Government spending is the primary source of inflation.

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

What does the saying "There is no such thing as a free lunch" mean

Which of these consumption activities will most likely impose an external cost

What does efficiency mean

To what extent does the invisible hand model of a market ensure equity and efficiency

What causes almost all variation in living standards in different countries

What is the best example of a marginal change

Define opportunity cost.What is the opportunity cost to you of attending university What was your opportunity cost of coming to class today

Daniel decides to spend the last two hours of the night before his economics exam studying instead of sleeping.For Daniel,what would his tradeoff be

When the government redistributes income from the rich to the poor,what is the result

What is the opportunity cost of going to university

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters