Question 1

What was inflation in Canada in the 1990s

Accepted Answer

A) It was almost zero. 
B) It was about 2 percent per year. 
C) It was approaching double digits. 
D) It was about 10 percent per year. 
A) It was almost zero. 
B) It was about 2 percent per year. 
C) It was approaching double digits. 
D) It was about 10 percent per year.

Question 2

From which of the following is the word "economy" derived

Accepted Answer

A) environment 
B) one who manages a household 
C) one who participates in a market 
D) allocation 
A) environment 
B) one who manages a household 
C) one who participates in a market 
D) allocation

Question 3

Under what conditions might government intervention in an economy improve the market outcome

Accepted Answer

If there is a market failure,such as an

Question 4

Which of the following displays a direct,or positive,relationship

Accepted Answer

A) a country's productivity and its standard of living 
B) a country's government spending and its tax rates 
C) a country's total population and its per-capita income 
D) a country's prices for its goods and services and its exports 
A) a country's productivity and its standard of living 
B) a country's government spending and its tax rates 
C) a country's total population and its per-capita income 
D) a country's prices for its goods and services and its exports

Question 5

What concept is illustrated by the adage,"There is no such thing as a free lunch"

Accepted Answer

A) tradeoffs 
B) scarcity 
C) productivity 
D) efficiency 
A) tradeoffs 
B) scarcity 
C) productivity 
D) efficiency

Question 6

Inflation increases the value of money.

Accepted Answer

A) True 
 B)False

Question 7

Mike has spent $800 purchasing and repairing an old motorcycle,which he expects to sell for $1,200.He discovers that he needs an additional repair,which will cost $200.He can sell the motorcycle as it is now for $400.What should he do

Accepted Answer

A) He should take the $400. 
B) He should never sell something for less than it cost. 
C) He should complete the repairs and sell the motorcycle. 
D) It doesn't matter which action he takes; the outcome is the same either way. 
A) He should take the $400. 
B) He should never sell something for less than it cost. 
C) He should complete the repairs and sell the motorcycle. 
D) It doesn't matter which action he takes; the outcome is the same either way.

Question 8

Which concept best defines efficiency

Accepted Answer

A) absolute fairness 
B) equal distribution 
C) minimum waste 
D) consumer satisfaction 
A) absolute fairness 
B) equal distribution 
C) minimum waste 
D) consumer satisfaction

Question 9

What does economics study

Accepted Answer

A) finance 
B) how society manages its scarce resources 
C) central planning 
D) government regulation 
A) finance 
B) how society manages its scarce resources 
C) central planning 
D) government regulation

Question 10

What has been the result of laws requiring that drivers wear seat belts

Accepted Answer

A) a reduction in both driver deaths and pedestrian deaths 
B) fewer accidents and fewer deaths per accident 
C) fewer driver deaths, fewer accidents, and fewer pedestrian deaths 
D) little change in the number of driver deaths, but more accidents and more pedestrian deaths 
A) a reduction in both driver deaths and pedestrian deaths 
B) fewer accidents and fewer deaths per accident 
C) fewer driver deaths, fewer accidents, and fewer pedestrian deaths 
D) little change in the number of driver deaths, but more accidents and more pedestrian deaths

Question 11

Monica has spent $30,000 purchasing and repairing an old cabin,which she expects to sell for $40,000.She discovers that she needs an additional repair,which will cost $15,000.She can sell the cabin as it is now for $25,000.What should she do

Accepted Answer

A) She should take the $25,000. 
B) She should never sell something for less than its cost. 
C) She should complete the repairs and sell the cabin. 
D) It doesn't matter which action she takes; the outcome is the same either way. 
A) She should take the $25,000. 
B) She should never sell something for less than its cost. 
C) She should complete the repairs and sell the cabin. 
D) It doesn't matter which action she takes; the outcome is the same either way.

Question 12

An economic principle is that people respond to incentives.Identify the incentives and discuss the possible outcomes in each of the following situations.
a) A Liberal government decides to increase the level of required health benefits that firms pay on behalf of their employees.
b) The City of Winnipeg decides to set a rather high regulated parking fee in downtown in order to reduce traffic congestion.
c) A very popular hip-hop singer asks his managers to set concert prices very low such that everybody can afford them.
d) The government of Canada subsidizes the purchases of new electric cars.
e) A provincial government subsidizes tuition fees for all students who get admitted to college for the whole period of studies.
f) A father gives his daughter $50 when she gets a grade of D at school,$100 for a C,$500 for a B,and $1000 for an A.

Accepted Answer

a) People will increase their demand for

Question 13

A furniture maker currently produces 100 tables per week and sells them for a profit.She is considering expanding her operation in order to make more tables.Should she expand

Accepted Answer

A) Yes, because making tables is profitable. 
B) No, because she may not be able to sell the additional tables. 
C) It depends on the marginal cost of producing more tables and the marginal revenue she will earn from selling more tables. 
D) It depends on the average cost of producing more tables and the average revenue she will earn from selling more tables. 
A) Yes, because making tables is profitable. 
B) No, because she may not be able to sell the additional tables. 
C) It depends on the marginal cost of producing more tables and the marginal revenue she will earn from selling more tables. 
D) It depends on the average cost of producing more tables and the average revenue she will earn from selling more tables.

Question 14

In a market economy,decisions are guided by individual self-interest.What impact does this have

Accepted Answer

A) There is still the ability to achieve desirable economic well-being for society as a whole. 
B) There is a strong need for government intervention in the market. 
C) There is less efficiency in market economies than in command economies. 
D) There is more need for a strong legal system to control individual greed. 
A) There is still the ability to achieve desirable economic well-being for society as a whole. 
B) There is a strong need for government intervention in the market. 
C) There is less efficiency in market economies than in command economies. 
D) There is more need for a strong legal system to control individual greed.

Question 15

The average cost per seat on a train trip from Edmonton to Jasper is $140.Suppose no refreshments are served and three seats are empty.How could the train company increase its profit

Accepted Answer

A) if it charged no less than $140 for the three remaining seats 
B) if it charged more than $140 for the three remaining seats 
C) if it charged any ticket price above $0 for the remaining seats 
D) if it left the seats empty 
A) if it charged no less than $140 for the three remaining seats 
B) if it charged more than $140 for the three remaining seats 
C) if it charged any ticket price above $0 for the remaining seats 
D) if it left the seats empty

Question 16

What happens if a sawmill creates too much air pollution

Accepted Answer

A) Interference by the government will surely make the matter worse. 
B) A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C) The government can raise economic well-being by providing health care to those affected by the pollution. 
D) The government can raise economic well-being through environmental regulation. 
A) Interference by the government will surely make the matter worse. 
B) A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C) The government can raise economic well-being by providing health care to those affected by the pollution. 
D) The government can raise economic well-being through environmental regulation.

Question 17

Mike has spent $500 purchasing and repairing an old fishing boat,which he expects to sell for $800.He discovers that he needs an additional repair,which will cost $600.He can sell the boat as it is now for $300.What should he do

Accepted Answer

A) He should take the $300. 
B) He should never sell something for less than its cost. 
C) He should complete the repairs and sell the boat. 
D) It doesn't matter which action he takes; the outcome is the same either way. 
A) He should take the $300. 
B) He should never sell something for less than its cost. 
C) He should complete the repairs and sell the boat. 
D) It doesn't matter which action he takes; the outcome is the same either way.

Question 18

What does making decisions "at the margin" mean

Accepted Answer

A) that people make those decisions that do not impose a marginal cost 
B) that people evaluate how easily a decision can be reversed if problems arise 
C) that people compare the marginal costs and marginal benefits of each decision 
D) that people always calculate the marginal dollar costs for each decision 
A) that people make those decisions that do not impose a marginal cost 
B) that people evaluate how easily a decision can be reversed if problems arise 
C) that people compare the marginal costs and marginal benefits of each decision 
D) that people always calculate the marginal dollar costs for each decision

Question 19

To improve living standards,what should policymakers do

Accepted Answer

A) impose restriction on foreign competition 
B) formulate policies designed to increase productivity 
C) impose tougher immigration policies 
D) provide subsidized childcare to low-income families 
A) impose restriction on foreign competition 
B) formulate policies designed to increase productivity 
C) impose tougher immigration policies 
D) provide subsidized childcare to low-income families

Question 20

Productivity is the primary determinant of a country's living standards.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

What was inflation in Canada in the 1990s

From which of the following is the word "economy" derived

Under what conditions might government intervention in an economy improve the market outcome

Which of the following displays a direct,or positive,relationship

What concept is illustrated by the adage,"There is no such thing as a free lunch"

Inflation increases the value of money.

Mike has spent $800 purchasing and repairing an old motorcycle,which he expects to sell for $1,200.He discovers that he needs an additional repair,which will cost $200.He can sell the motorcycle as it is now for $400.What should he do

Which concept best defines efficiency

What does economics study

What has been the result of laws requiring that drivers wear seat belts

Monica has spent $30,000 purchasing and repairing an old cabin,which she expects to sell for $40,000.She discovers that she needs an additional repair,which will cost $15,000.She can sell the cabin as it is now for $25,000.What should she do

A furniture maker currently produces 100 tables per week and sells them for a profit.She is considering expanding her operation in order to make more tables.Should she expand

In a market economy,decisions are guided by individual self-interest.What impact does this have

The average cost per seat on a train trip from Edmonton to Jasper is $140.Suppose no refreshments are served and three seats are empty.How could the train company increase its profit

What happens if a sawmill creates too much air pollution

Mike has spent $500 purchasing and repairing an old fishing boat,which he expects to sell for $800.He discovers that he needs an additional repair,which will cost $600.He can sell the boat as it is now for $300.What should he do

What does making decisions "at the margin" mean

To improve living standards,what should policymakers do

Productivity is the primary determinant of a country's living standards.

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

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