Question 1

What is the opportunity cost of an item

Accepted Answer

A) the number of hours needed to earn money to buy it 
B) what you give up to get that item 
C) usually more than the dollar value of the item 
D) the value of the resources needed to produce the item 
A) the number of hours needed to earn money to buy it 
B) what you give up to get that item 
C) usually more than the dollar value of the item 
D) the value of the resources needed to produce the item

Question 2

What is one component necessary for markets to work

Accepted Answer

A) government intervention 
B) a non-profit sector of society 
C) property rights 
D) abundant resources 
A) government intervention 
B) a non-profit sector of society 
C) property rights 
D) abundant resources

Question 3

With which nations does Canada benefit from trade

Accepted Answer

A) only nations that can produce goods Canada cannot produce 
B) with any nation 
C) with any nation not in economic competition with Canada 
D) only with less developed nations 
A) only nations that can produce goods Canada cannot produce 
B) with any nation 
C) with any nation not in economic competition with Canada 
D) only with less developed nations

Question 4

What is NOT a benefit from trade

Accepted Answer

A) the ability to specialize 
B) a greater variety of goods and services becoming available 
C) less competition 
D) lower prices 
A) the ability to specialize 
B) a greater variety of goods and services becoming available 
C) less competition 
D) lower prices

Question 5

Approximately what percentage of the world's economies experience scarcity

Accepted Answer

A) 25 
B) 50 
C) 75 
D) 100 
A) 25 
B) 50 
C) 75 
D) 100

Question 6

In the nation of Dictatorland,farmers traditionally feed grain to their livestock.Central planners,however,decided to increase the price of grain to make grain farmers happy and to reduce the price of bread made from that grain to make city dwellers happy.Now the price of bread is lower than the price of grain.What might we now expect

Accepted Answer

A) farmers to continue to feed grain to their livestock 
B) farmers to start feeding bread to their livestock 
C) city dwellers to start buying grain to make bread to eat 
D) city dwellers to start buying grain to make bread to sell 
A) farmers to continue to feed grain to their livestock 
B) farmers to start feeding bread to their livestock 
C) city dwellers to start buying grain to make bread to eat 
D) city dwellers to start buying grain to make bread to sell

Question 7

How can trade benefit a family

Accepted Answer

A) by allowing the family to buy a greater variety of goods and services at a lower cost 
B) by allowing each person to buy only the goods and services they want most 
C) only if the family is not in economic competition with other families 
D) trade can only benefit entire nations, not individuals 
A) by allowing the family to buy a greater variety of goods and services at a lower cost 
B) by allowing each person to buy only the goods and services they want most 
C) only if the family is not in economic competition with other families 
D) trade can only benefit entire nations, not individuals

Question 8

What is a primary function of prices in a market economy

Accepted Answer

A) to provide participants with economic information 
B) to provide participants with spending limits 
C) to provide participants with accounting capabilities 
D) to provide participants with an equitable distribution of goods 
A) to provide participants with economic information 
B) to provide participants with spending limits 
C) to provide participants with accounting capabilities 
D) to provide participants with an equitable distribution of goods

Question 9

For society,when is a good NOT scarce

Accepted Answer

A) if at least one individual in society can obtain all he or she wants of the good 
B) if firms are producing at full capacity 
C) if all members of society can have all they want of the good 
D) if those who have enough income can buy all they want of the good 
A) if at least one individual in society can obtain all he or she wants of the good 
B) if firms are producing at full capacity 
C) if all members of society can have all they want of the good 
D) if those who have enough income can buy all they want of the good

Question 10

When does scarcity exist

Accepted Answer

A) when there is less than an infinite amount of a resource or good 
B) when society can meet the wants of every individual 
C) when there is less of a good or resource available than people wish to have 
D) when the government fails to produce goods 
A) when there is less than an infinite amount of a resource or good 
B) when society can meet the wants of every individual 
C) when there is less of a good or resource available than people wish to have 
D) when the government fails to produce goods

Question 11

What will be the probable outcome if Japan chooses to engage in trade

Accepted Answer

A) It will only benefit if it trades with countries that produce goods it cannot produce. 
B) It cannot benefit if it trades with less developed countries. 
C) It will only benefit if it trades with countries that are geographically close Japan. 
D) It can benefit by trading with any other country. 
A) It will only benefit if it trades with countries that produce goods it cannot produce. 
B) It cannot benefit if it trades with less developed countries. 
C) It will only benefit if it trades with countries that are geographically close Japan. 
D) It can benefit by trading with any other country.

Question 12

In a market economy,what do prices reflect

Accepted Answer

A) the popularity of a good in society 
B) the cost to society of making the good 
C) the quantity society will ultimately choose to produce 
D) the level of wealth in society 
A) the popularity of a good in society 
B) the cost to society of making the good 
C) the quantity society will ultimately choose to produce 
D) the level of wealth in society

Question 13

When and where did one of the worst episodes of inflation occur

Accepted Answer

A) in Canada in the 1990s 
B) in Argentina in the 1950s 
C) in Russia in the 1930s 
D) in Germany in the 1920s 
A) in Canada in the 1990s 
B) in Argentina in the 1950s 
C) in Russia in the 1930s 
D) in Germany in the 1920s

Question 14

Why is the opportunity cost of gasoline in Canada higher than in the United States when measured by "Minutes Worked per Kilometre Driven"

Accepted Answer

A) The fuel economy in the two countries is different. 
B) Gas prices are lower and average wages are higher in the United States. 
C) Both gas prices and average wages are higher in the United States. 
D) Both gas prices and average wages are lower in the United States. 
A) The fuel economy in the two countries is different. 
B) Gas prices are lower and average wages are higher in the United States. 
C) Both gas prices and average wages are higher in the United States. 
D) Both gas prices and average wages are lower in the United States.

Question 15

What are two causes of market failure

Accepted Answer

A) externalities and market power 
B) market power and incorrect forecasts of consumer demand 
C) externalities and foreign competition 
D) government intervention and foreign competition 
A) externalities and market power 
B) market power and incorrect forecasts of consumer demand 
C) externalities and foreign competition 
D) government intervention and foreign competition

Question 16

What happens when government policies such as the welfare system try to help the neediest members of society

Accepted Answer

A) It increases equity and reduces efficiency. 
B) It reduces charitable contributions in an economy. 
C) It increases the productivity of the needy in society. 
D) It causes market failure to occur. 
A) It increases equity and reduces efficiency. 
B) It reduces charitable contributions in an economy. 
C) It increases the productivity of the needy in society. 
D) It causes market failure to occur.

Question 17

In a market economy,what guides economic activity

Accepted Answer

A) the government 
B) businesses 
C) central planners 
D) prices 
A) the government 
B) businesses 
C) central planners 
D) prices

Question 18

If the average income of an Australian is higher than the average income of a Russian,what is the most likely reason

Accepted Answer

A) Productivity is higher in Australia than in Russia. 
B) Australia has a more industrial economy than Russia. 
C) There is more competition in Australia than in Russia. 
D) Labour unions are more aggressive in Australia than in Russia. 
A) Productivity is higher in Australia than in Russia. 
B) Australia has a more industrial economy than Russia. 
C) There is more competition in Australia than in Russia. 
D) Labour unions are more aggressive in Australia than in Russia.

Question 19

What happens when the government attempts to cut the economic pie into more equal slices

Accepted Answer

A) It is easier to cut the pie, and therefore the economy can produce a larger pie. 
B) The government can more easily allocate the pie to those most in need. 
C) The pie gets smaller, and there will be less pie for everyone. 
D) The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone. 
A) It is easier to cut the pie, and therefore the economy can produce a larger pie. 
B) The government can more easily allocate the pie to those most in need. 
C) The pie gets smaller, and there will be less pie for everyone. 
D) The economy will spend too much time cutting the pie and lose the ability to produce enough pie for everyone.

Question 20

Why are gasoline prices in Canada higher than in the United States

Accepted Answer

A) higher taxes in Canada 
B) larger oil reserves in the United States 
C) higher cost of transporting oil in Canada 
D) higher cost of refining oil in Canada 
A) higher taxes in Canada 
B) larger oil reserves in the United States 
C) higher cost of transporting oil in Canada 
D) higher cost of refining oil in Canada

Exam 1: Ten Principles of Economics

What is the opportunity cost of an item

What is one component necessary for markets to work

With which nations does Canada benefit from trade

What is NOT a benefit from trade

Approximately what percentage of the world's economies experience scarcity

How can trade benefit a family

What is a primary function of prices in a market economy

For society,when is a good NOT scarce

When does scarcity exist

What will be the probable outcome if Japan chooses to engage in trade

In a market economy,what do prices reflect

When and where did one of the worst episodes of inflation occur

Why is the opportunity cost of gasoline in Canada higher than in the United States when measured by "Minutes Worked per Kilometre Driven"

What are two causes of market failure

What happens when government policies such as the welfare system try to help the neediest members of society

In a market economy,what guides economic activity

If the average income of an Australian is higher than the average income of a Russian,what is the most likely reason

What happens when the government attempts to cut the economic pie into more equal slices

Why are gasoline prices in Canada higher than in the United States

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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