Question 1

How do economists begin building an economic model

Accepted Answer

A) by writing grants for government funding 
B) by conducting controlled experiments in a lab 
C) by making assumptions 
D) by reviewing statistical forecasts 
A) by writing grants for government funding 
B) by conducting controlled experiments in a lab 
C) by making assumptions 
D) by reviewing statistical forecasts

Question 2

What is another name for goods and services produced by firms

Accepted Answer

A) factors of production 
B) outputs 
C) inputs 
D) resources 
A) factors of production 
B) outputs 
C) inputs 
D) resources

Question 3

Figure 2-2
  
-Refer to Figure 2-2.In which market are firms sellers

Accepted Answer

A) Box A 
B) Box B 
C) Box C 
D) Box D 
A) Box A 
B) Box B 
C) Box C 
D) Box D

Question 4

What famous economist said,"The ideas of economists and political philosophers … are more powerful than is commonly understood"

Accepted Answer

A) Gregory Mankiw 
B) John Maynard Keynes 
C) Paul Krugman 
D) David Ricardo 
A) Gregory Mankiw 
B) John Maynard Keynes 
C) Paul Krugman 
D) David Ricardo

Question 5

Draw a production possibilities frontier showing increasing opportunity cost for hammers and horseshoes.
a.On the graph,identify the area of feasible outcomes and the area of unfeasible outcomes.
b.On the graph,label a point that is efficient as point E and a point that is inefficient as point I.
c.On the graph,illustrate the effect of the discovery of a new vein of iron ore,a resource needed to make both horseshoes and hammers,on this economy.
d.On a separate graph for hammers and horseshoes,illustrate the effect a new computerized assembly line in the production of hammers would have.

Accepted Answer

The graph on the lef

Question 6

What do economists at the Canadian International Development Agency do

Accepted Answer

A) give advice on overseas development projects 
B) collect data to help other economists 
C) help formulate labour market policies 
D) assess temporary foreign worker programs 
A) give advice on overseas development projects 
B) collect data to help other economists 
C) help formulate labour market policies 
D) assess temporary foreign worker programs

Question 7

Economists outside the government also offer policy advice.Which institution does NOT publish reports by economists

Accepted Answer

A) C.D.Howe Institute 
B) Fraser Institute 
C) Institute for Research on Public Policy 
D) H.M.Holmes Institute 
A) C.D.Howe Institute 
B) Fraser Institute 
C) Institute for Research on Public Policy 
D) H.M.Holmes Institute

Question 8

In the simple circular-flow diagram,who owns the factors of production

Accepted Answer

A) the government 
B) firms 
C) households 
D) corporations 
A) the government 
B) firms 
C) households 
D) corporations

Question 9

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a one-variable graph

Accepted Answer

A) a demand curve 
B) a production possibilities curve 
C) a circular-flow diagram 
D) a bar graph 
A) a demand curve 
B) a production possibilities curve 
C) a circular-flow diagram 
D) a bar graph

Question 11

In which department do economists help enforce competition laws

Accepted Answer

A) Environment Canada 
B) Industry Canada 
C) Ministry of Finance 
D) Canadian International Development Agency 
A) Environment Canada 
B) Industry Canada 
C) Ministry of Finance 
D) Canadian International Development Agency

Question 12

How is the slope of a straight line calculated

Accepted Answer

A) rise divided by run 
B) run divided by rise 
C) the average of rise and run 
D) rise plus run 
A) rise divided by run 
B) run divided by rise 
C) the average of rise and run 
D) rise plus run

Question 13

What is a characteristic of the circular-flow model

Accepted Answer

A) Firms are sellers in the resource market and the product market. 
B) Firms are buyers in the product market. 
C) Households are sellers in the resource market. 
D) Households are buyers in the resource market. 
A) Firms are sellers in the resource market and the product market. 
B) Firms are buyers in the product market. 
C) Households are sellers in the resource market. 
D) Households are buyers in the resource market.

Question 14

Why did George Bernard Shaw,among others,criticize economists

Accepted Answer

A) because they have too much influence over government decisions 
B) because many ideas are too theoretical and therefore do not work in "real life" 
C) because they tend to speak a different language, causing most people to not understand them 
D) because they seem to give conflicting advice to policymakers 
A) because they have too much influence over government decisions 
B) because many ideas are too theoretical and therefore do not work in "real life" 
C) because they tend to speak a different language, causing most people to not understand them 
D) because they seem to give conflicting advice to policymakers

Question 15

What does a demand curve show

Accepted Answer

A) the relationship between income and quantity demanded 
B) the relationship between price and income 
C) the relationship between price and quantity demanded 
D) the relationship among income, price, and quantity demanded 
A) the relationship between income and quantity demanded 
B) the relationship between price and income 
C) the relationship between price and quantity demanded 
D) the relationship among income, price, and quantity demanded

Question 16

Which of the following is NOT a positive statement

Accepted Answer

A) Lower oil prices will result in higher unemployment. 
B) Equity is more important than efficiency. 
C) Trade restrictions lower our standard of living. 
D) If a nation wants to avoid inflation, it should not print too much money. 
A) Lower oil prices will result in higher unemployment. 
B) Equity is more important than efficiency. 
C) Trade restrictions lower our standard of living. 
D) If a nation wants to avoid inflation, it should not print too much money.

Question 17

What happens when two variables have a negative correlation

Accepted Answer

A) They tend to move in opposite directions. 
B) They tend to move in the same direction. 
C) One variable will move while the other remains constant. 
D) The movement of the two variables is unpredictable. 
A) They tend to move in opposite directions. 
B) They tend to move in the same direction. 
C) One variable will move while the other remains constant. 
D) The movement of the two variables is unpredictable.

Question 18

What can good assumptions do

Accepted Answer

A) cause economists to leave out important variables that make their theories worthless 
B) simplify the complex world and make it easier to understand 
C) eliminate invalid causations 
D) allow economists to see the "big picture" instead of only small segments 
A) cause economists to leave out important variables that make their theories worthless 
B) simplify the complex world and make it easier to understand 
C) eliminate invalid causations 
D) allow economists to see the "big picture" instead of only small segments

Question 19

Figure 2-11
  
-Refer to Figure 2-11.Points A,B,and D represent feasible or attainable outcomes for society.

Accepted Answer

A) True 
 B)False

Question 20

What do economists at Foreign Affairs Canada and International Trade Canada do

Accepted Answer

A) help negotiate trade agreements with other countries 
B) offer advice on overseas economic development projects 
C) analyze financial markets 
D) compile databases on the economy 
A) help negotiate trade agreements with other countries 
B) offer advice on overseas economic development projects 
C) analyze financial markets 
D) compile databases on the economy

Exam 2: Thinking Like an Economist

How do economists begin building an economic model

What is another name for goods and services produced by firms

Figure 2-2 -Refer to Figure 2-2.In which market are firms sellers

What famous economist said,"The ideas of economists and political philosophers … are more powerful than is commonly understood"

What do economists at the Canadian International Development Agency do

Economists outside the government also offer policy advice.Which institution does NOT publish reports by economists

In the simple circular-flow diagram,who owns the factors of production

An economic model can accurately explain how the economy is organized because it is designed to include every feature of the real world.

Which of the following is a one-variable graph

In which department do economists help enforce competition laws

How is the slope of a straight line calculated

What is a characteristic of the circular-flow model

Why did George Bernard Shaw,among others,criticize economists

What does a demand curve show

Which of the following is NOT a positive statement

What happens when two variables have a negative correlation

What can good assumptions do

Figure 2-11 -Refer to Figure 2-11.Points A,B,and D represent feasible or attainable outcomes for society.

What do economists at Foreign Affairs Canada and International Trade Canada do

Ten Principles of Economics

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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