Question 1

When a firm decides to produce computers using robots instead of people, it is answering the ________ question.

Accepted Answer

A) "what" 
B) "where" 
C) "how" 
D) "who" 
E) "when" 
A) "what" 
B) "where" 
C) "how" 
D) "who" 
E) "when"

Question 2

A normative statement is a statement regarding

Accepted Answer

A) what is usually the case. 
B) the assumptions of an economic model. 
C) what ought to be. 
D) the predictions of an economic model. 
E) what is. 
A) what is usually the case. 
B) the assumptions of an economic model. 
C) what ought to be. 
D) the predictions of an economic model. 
E) what is.

Question 3

Which of the following equations describes a straight line with a y-intercept of -2 and a slope of -5?

Accepted Answer

A) y = -5 - 2x 
B) y = -2 
C) y = -2 - 5x 
D) y = -5x 
E) x = -2 - 5y 
A) y = -5 - 2x 
B) y = -2 
C) y = -2 - 5x 
D) y = -5x 
E) x = -2 - 5y

Question 4

Use the figure below to answer the following question.
   
Figure 1A.4.1
-Given the data in the following table, which one of the graphs in Figure 1A.4.1 correctly represents the relationship among x, y, and z?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (c) 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (c)

Question 5

A good economic model

Accepted Answer

A) does not include more than two variables. 
B) includes only those features of the world that are needed for the purpose at hand. 
C) describes all aspects of the economic world. 
D) includes only features of the world that can be described numerically. 
E) includes more than two variables but less than 10 variables. 
A) does not include more than two variables. 
B) includes only those features of the world that are needed for the purpose at hand. 
C) describes all aspects of the economic world. 
D) includes only features of the world that can be described numerically. 
E) includes more than two variables but less than 10 variables.

Question 6

Use the figure below to answer the following questions.
   
Figure 1A.1.5
-Consider graph (a)of Figure 1A.1.5. Which one of the following statements is true?

Accepted Answer

A) x and y are negatively related. 
B) x and y are unrelated. 
C) x and y are positively related. 
D) x and y move in opposite directions. 
E) both A and D are correct. 
A) x and y are negatively related. 
B) x and y are unrelated. 
C) x and y are positively related. 
D) x and y move in opposite directions. 
E) both A and D are correct.

Question 7

Use the figure below to answer the following questions.
   
Figure 1A.4.5
-Consider the following information on cola sales by number of cases for a typical university residence floor: Temp. Price (dollars per case)
 
Refer to Figure 1A.4.5. Which one of the following represents what happens when the temperature rises from 20°C to 25°C?

Accepted Answer

A) The curve shifts from A to B. 
B) The curve shifts from C to B. 
C) The curve shifts from B to C. 
D) The curve shifts along line B. 
E) The curve shifts along line C. 
A) The curve shifts from A to B. 
B) The curve shifts from C to B. 
C) The curve shifts from B to C. 
D) The curve shifts along line B. 
E) The curve shifts along line C.

Question 8

During the next hour John can choose one of the following three activities: playing basketball, watching television, or reading a book. The opportunity cost of reading a book

Accepted Answer

A) depends on how much the book cost when it was purchased. 
B) is the value of playing basketball if John prefers that to watching television. 
C) is the value of playing basketball and the value of watching television. 
D) depends on how much John enjoys the book. 
E) is the value of watching television if John prefers playing basketball to watching television. 
A) depends on how much the book cost when it was purchased. 
B) is the value of playing basketball if John prefers that to watching television. 
C) is the value of playing basketball and the value of watching television. 
D) depends on how much John enjoys the book. 
E) is the value of watching television if John prefers playing basketball to watching television.

Question 9

Use the figure below to answer the following questions.
   
Figure 1A.3.4
-Figure 1A.3.4 illustrates two variables, x and y, which are

Accepted Answer

A) negatively related, with slope becoming closer to 0 as x increases from 2 to 16. 
B) negatively related, with slope becoming farther from 0 as x increases from 2 to 16. 
C) positively related, with slope becoming closer to 0 as x increases from 2 to 16. 
D) positively related, with slope becoming farther from 0 as x increases from 2 to 16. 
E) positively related, with the slope unchanging as x increases from 2 to 16. 
A) negatively related, with slope becoming closer to 0 as x increases from 2 to 16. 
B) negatively related, with slope becoming farther from 0 as x increases from 2 to 16. 
C) positively related, with slope becoming closer to 0 as x increases from 2 to 16. 
D) positively related, with slope becoming farther from 0 as x increases from 2 to 16. 
E) positively related, with the slope unchanging as x increases from 2 to 16.

Question 10

The inescapable economic fact is that

Accepted Answer

A) there are unlimited wants and limited resources. 
B) there are unlimited resources, and we just have to decide how to allocate them. 
C) capitalists are always exploiting the workers. 
D) unions are always exploiting firms. 
E) capitalists and unions cannot work together. 
A) there are unlimited wants and limited resources. 
B) there are unlimited resources, and we just have to decide how to allocate them. 
C) capitalists are always exploiting the workers. 
D) unions are always exploiting firms. 
E) capitalists and unions cannot work together.

Question 11

The fact that human wants cannot be fully satisfied with available resources is called the problem of

Accepted Answer

A) opportunity cost. 
B) scarcity. 
C) normative economics. 
D) marginal cost. 
E) the big tradeoff. 
A) opportunity cost. 
B) scarcity. 
C) normative economics. 
D) marginal cost. 
E) the big tradeoff.

Question 12

Use the figure below to answer the following questions.
   
Figure 1A.3.5
-Refer to Figure 1A.3.5. Which one of the following statements is true?

Accepted Answer

A) The slope is less between points A and B than between points B and C. 
B) The slope is greater between points B and C than between points A and B. 
C) The slope at C is 0. 
D) The slope at C is 1. 
E) The slope at C is negative. 
A) The slope is less between points A and B than between points B and C. 
B) The slope is greater between points B and C than between points A and B. 
C) The slope at C is 0. 
D) The slope at C is 1. 
E) The slope at C is negative.

Question 13

Use the information below to answer the following questions.
Fact 1.4.1 Costco
When Costco opened a gas bar just off Highway 401, the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre.
-Refer to Fact 1.4.1. The opportunity cost of a litre of gas is

Accepted Answer

A) the time that you would have spent doing something other than lining up to buy a litre of gasoline. 
B) the amount of money that a consumer saves by buying gasoline at Costco. 
C) the 10 cent discount on a litre of gasoline. 
D) the pleasure that motorists receive from buying cheaper gasoline. 
E) zero if you drive an electric car. 
A) the time that you would have spent doing something other than lining up to buy a litre of gasoline. 
B) the amount of money that a consumer saves by buying gasoline at Costco. 
C) the 10 cent discount on a litre of gasoline. 
D) the pleasure that motorists receive from buying cheaper gasoline. 
E) zero if you drive an electric car.

Question 14

Which of the following is the best definition of economics?

Accepted Answer

A) the study of how a provincial government allocates tax dollars 
B) the study of how consumers spend their income 
C) the study of how producers decide what inputs to hire and what outputs to produce 
D) the study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices 
E) the study of how consumers and producers meet each other at the market 
A) the study of how a provincial government allocates tax dollars 
B) the study of how consumers spend their income 
C) the study of how producers decide what inputs to hire and what outputs to produce 
D) the study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices 
E) the study of how consumers and producers meet each other at the market

Question 15

Use the figure below to answer the following questions.
   
Figure 1A.2.1
-In Figure 1A.2.1, the value of y is 5 when x is

Accepted Answer

A) 4. 
B) 5. 
C) 6. 
D) 7. 
E) 8. 
A) 4. 
B) 5. 
C) 6. 
D) 7. 
E) 8.

Question 16

Which of the following is not a factor of production?

Accepted Answer

A) Timmy who is developing a production schedule for a new product 
B) 175 shares of Microsoft stock 
C) Vans used by a bakery company for deliveries 
D) Wilderness areas that have yet to be developed 
E) National parks 
A) Timmy who is developing a production schedule for a new product 
B) 175 shares of Microsoft stock 
C) Vans used by a bakery company for deliveries 
D) Wilderness areas that have yet to be developed 
E) National parks

Question 17

Which one of the following is labour?

Accepted Answer

A) money 
B) a carpenter's hammer 
C) a shoe factory 
D) a bread-slicing machine 
E) a singer's voice 
A) money 
B) a carpenter's hammer 
C) a shoe factory 
D) a bread-slicing machine 
E) a singer's voice

Question 18

Use the figure below to answer the following questions.
   
Figure 1A.3.1
-The slope of the line in Figure 1A.3.1 is

Accepted Answer

A) 0.50. 
B) 0.75. 
C) 1.00 
D) 1.25. 
E) 1.50. 
A) 0.50. 
B) 0.75. 
C) 1.00 
D) 1.25. 
E) 1.50.

Question 19

Complete the following sentence. Economic models

Accepted Answer

A) do not answer questions about the economic world. 
B) include most of the details of the economic world. 
C) describe some aspect of the economic world, but include only those features needed for the purpose at hand. 
D) answer questions that arise from normative statements. 
E) were first developed in the 1970s. 
A) do not answer questions about the economic world. 
B) include most of the details of the economic world. 
C) describe some aspect of the economic world, but include only those features needed for the purpose at hand. 
D) answer questions that arise from normative statements. 
E) were first developed in the 1970s.

Question 20

Which one of the following topics does microeconomics study?

Accepted Answer

A) reasons for a fall in the price of orange juice 
B) the effect of a rise in the Canadian dollar on Canada's exports 
C) effect of interest rates on national economic growth 
D) effect of the government budget deficit on employment 
E) determination of total production in a country 
A) reasons for a fall in the price of orange juice 
B) the effect of a rise in the Canadian dollar on Canada's exports 
C) effect of interest rates on national economic growth 
D) effect of the government budget deficit on employment 
E) determination of total production in a country

Exam 1: What Is Economics

When a firm decides to produce computers using robots instead of people, it is answering the ________ question.

A normative statement is a statement regarding

Which of the following equations describes a straight line with a y-intercept of -2 and a slope of -5?

Use the figure below to answer the following question. Figure 1A.4.1 -Given the data in the following table, which one of the graphs in Figure 1A.4.1 correctly represents the relationship among x, y, and z?

A good economic model

Use the figure below to answer the following questions. Figure 1A.1.5 -Consider graph (a)of Figure 1A.1.5. Which one of the following statements is true?

During the next hour John can choose one of the following three activities: playing basketball, watching television, or reading a book. The opportunity cost of reading a book

Use the figure below to answer the following questions. Figure 1A.3.4 -Figure 1A.3.4 illustrates two variables, x and y, which are

The inescapable economic fact is that

The fact that human wants cannot be fully satisfied with available resources is called the problem of

Use the figure below to answer the following questions. Figure 1A.3.5 -Refer to Figure 1A.3.5. Which one of the following statements is true?

Use the information below to answer the following questions. Fact 1.4.1 Costco When Costco opened a gas bar just off Highway 401, the neighbourhood was swamped with cars as drivers lined up to get the discount of 10 cents a litre. -Refer to Fact 1.4.1. The opportunity cost of a litre of gas is

Which of the following is the best definition of economics?

Use the figure below to answer the following questions. Figure 1A.2.1 -In Figure 1A.2.1, the value of y is 5 when x is

Which of the following is not a factor of production?

Which one of the following is labour?

Use the figure below to answer the following questions. Figure 1A.3.1 -The slope of the line in Figure 1A.3.1 is

Complete the following sentence. Economic models

Which one of the following topics does microeconomics study?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

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