Question 1

Marginal benefit is

Accepted Answer

A) the cost of an increase in an activity. 
B) the sum of benefit and cost that arises from an increase in an activity. 
C) the cost of a decrease in an activity. 
D) the benefit that arises from an increase in an activity. 
E) the benefit that arises from a decrease in an activity. 
A) the cost of an increase in an activity. 
B) the sum of benefit and cost that arises from an increase in an activity. 
C) the cost of a decrease in an activity. 
D) the benefit that arises from an increase in an activity. 
E) the benefit that arises from a decrease in an activity.

Question 2

Which statement about incomes earned by factors of production is false?

Accepted Answer

A) Land earns rent. 
B) Natural resources earn rent. 
C) Labour earns wages. 
D) Capital earns profit. 
E) Entrepreneurship earns profit. 
A) Land earns rent. 
B) Natural resources earn rent. 
C) Labour earns wages. 
D) Capital earns profit. 
E) Entrepreneurship earns profit.

Question 3

Operators of private dog parks in your city decide to eliminate their fees and allow dog owners to exercise their dogs in the parks at no charge. This statement means that the incentive to exercise dogs at the dog park ________.
The operators' decision is a ________.

Accepted Answer

A) remains the same; macroeconomic decision 
B) changes; microeconomic decision 
C) remains the same; microeconomic decision 
D) changes; macroeconomic decision 
E) changes; decision in the self-interest but not in the social interest 
A) remains the same; macroeconomic decision 
B) changes; microeconomic decision 
C) remains the same; microeconomic decision 
D) changes; macroeconomic decision 
E) changes; decision in the self-interest but not in the social interest

Question 4

Choose the correct statement.

Accepted Answer

A) Canada produces more services than goods. 
B) Canada produces more goods than services. 
C) Canada produces an equal quantity of goods and services. 
D) China's production of services is a greater percentage of its total production than Canada's. 
E) Canada's production of manufacturing is a greater percentage of its total production than China's. 
A) Canada produces more services than goods. 
B) Canada produces more goods than services. 
C) Canada produces an equal quantity of goods and services. 
D) China's production of services is a greater percentage of its total production than Canada's. 
E) Canada's production of manufacturing is a greater percentage of its total production than China's.

Question 5

The creation of a successful movie can influence the main questions that economics seeks to answer. Choose the statement that is false.

Accepted Answer

A) The movie influences the how question because the movie can create new production techniques, which can be used in subsequent films. 
B) The movie influences the for whom question because the people who earn higher incomes through the movie production buy more goods and services. 
C) The movie influences the when question because movie crews work on many different films and must be available for the entire production. 
D) The movie influences the what question because it can lead to spinoff goods or a new movie genre, which can result in the production of similar films. 
E) The movie influences the how question because it can use unknown actors or Academy Award winners. 
A) The movie influences the how question because the movie can create new production techniques, which can be used in subsequent films. 
B) The movie influences the for whom question because the people who earn higher incomes through the movie production buy more goods and services. 
C) The movie influences the when question because movie crews work on many different films and must be available for the entire production. 
D) The movie influences the what question because it can lead to spinoff goods or a new movie genre, which can result in the production of similar films. 
E) The movie influences the how question because it can use unknown actors or Academy Award winners.

Question 6

Use the figure below to answer the following question.
   
Figure 1A.5.5
-Refer to Figure 1A.5.5. The graph shows the relationship between two variables, x and y. Which of the following equations describes this relationship?

Accepted Answer

A) y = 3x + 15 
B) y = -3x + 15 
C) y = -3x2 + 15 
D) y = 15x + 3 
E) x = 15y + 3 
A) y = 3x + 15 
B) y = -3x + 15 
C) y = -3x2 + 15 
D) y = 15x + 3 
E) x = 15y + 3

Question 7

Select the best statement about economic models.

Accepted Answer

A) An economic model must always be correct in its predictions or it must be discarded. 
B) An economic model is evaluated based on the realism of its assumptions. 
C) An economic model should not generate predictions about actual events in the real world, since it discusses only abstract events. 
D) An economic model will be discarded if its predictions are often in conflict with the facts. 
E) Economic models are all false. 
A) An economic model must always be correct in its predictions or it must be discarded. 
B) An economic model is evaluated based on the realism of its assumptions. 
C) An economic model should not generate predictions about actual events in the real world, since it discusses only abstract events. 
D) An economic model will be discarded if its predictions are often in conflict with the facts. 
E) Economic models are all false.

Question 8

Which of the following relates factors of production to the sources of income correctly?

Accepted Answer

A) Land earns interest. 
B) Land earns rent. 
C) Labour earns rent. 
D) Capital earns profit. 
E) Entrepreneurship earns rent. 
A) Land earns interest. 
B) Land earns rent. 
C) Labour earns rent. 
D) Capital earns profit. 
E) Entrepreneurship earns rent.

Question 9

Use the figure below to answer the following questions.
   
Figure 1A.2.1
-Refer to Figure 1A.2.1. If x decreases from 5 to 4, y

Accepted Answer

A) decreases from 4 to 3. 
B) decreases from 4 to 3 1/2. 
C) decreases from 4 to 2. 
D) increases from 4 to 5. 
E) increases from 3 1/2 to 4. 
A) decreases from 4 to 3. 
B) decreases from 4 to 3 1/2. 
C) decreases from 4 to 2. 
D) increases from 4 to 5. 
E) increases from 3 1/2 to 4.

Question 10

If the equation of a straight line is y = 8 - 2x, then the slope is

Accepted Answer

A) -2 and the x-intercept is -4. 
B) -2 and the x-intercept is 4. 
C) -2 and the x-intercept is 8. 
D) 2 and the x-intercept is -4. 
E) 2 and the x-intercept is 4. 
A) -2 and the x-intercept is -4. 
B) -2 and the x-intercept is 4. 
C) -2 and the x-intercept is 8. 
D) 2 and the x-intercept is -4. 
E) 2 and the x-intercept is 4.

Question 11

The problem of scarcity exists

Accepted Answer

A) only in economies that lack incentives. 
B) only in economies that have incentives. 
C) in all economies. 
D) only when people are unemployed. 
E) now but will be eliminated with economic growth. 
A) only in economies that lack incentives. 
B) only in economies that have incentives. 
C) in all economies. 
D) only when people are unemployed. 
E) now but will be eliminated with economic growth.

Question 12

At all points along a straight line, slope is

Accepted Answer

A) positive. 
B) negative. 
C) constant. 
D) zero. 
E) infinity. 
A) positive. 
B) negative. 
C) constant. 
D) zero. 
E) infinity.

Question 13

The change in the value of the variable measured on the y- axis divided by the change in the value of the variable measured on the x-axis is

Accepted Answer

A) increasing. 
B) slope. 
C) decreasing. 
D) constant. 
E) a maximum or minimum. 
A) increasing. 
B) slope. 
C) decreasing. 
D) constant. 
E) a maximum or minimum.

Question 14

A university decides to change its late night bus service between the campus and student housing from a fare-based service to a free service. This statement means that the incentive to ride the bus ________ and the opportunity cost of a bus ride ________. The university's decision is a ________ decision.

Accepted Answer

A) changes; decreases; microeconomic 
B) changes; decreases; macroeconomic 
C) remains the same; remains the same; macroeconomic 
D) remains the same; remains the same; microeconomic 
E) changes; increases; microeconomic 
A) changes; decreases; microeconomic 
B) changes; decreases; macroeconomic 
C) remains the same; remains the same; macroeconomic 
D) remains the same; remains the same; microeconomic 
E) changes; increases; microeconomic

Question 15

Use the figure below to answer the following question.
   
Figure 1A.3.8
-The slope of the line in Figure 1A.3.8 is

Accepted Answer

A) 3/2. 
B) 2/3. 
C) -3/2. 
D) -2/3. 
E) none of the above. 
A) 3/2. 
B) 2/3. 
C) -3/2. 
D) -2/3. 
E) none of the above.

Question 16

Which of the following is a normative statement?

Accepted Answer

A) Next year's inflation rate will be under 4 percent. 
B) Consumers will buy more gasoline over the December holiday period than they bought during the summer holiday period even if the price of gas is 10 cents a litre higher than it was during the summer. 
C) Government cuts in welfare spending impose an unfair hardship on the poor. 
D) A wheat shortage or surplus is always the result of federal government policies. 
E) Hurricane Irene caused more damage in the United States than Hurricane Katrina. 
A) Next year's inflation rate will be under 4 percent. 
B) Consumers will buy more gasoline over the December holiday period than they bought during the summer holiday period even if the price of gas is 10 cents a litre higher than it was during the summer. 
C) Government cuts in welfare spending impose an unfair hardship on the poor. 
D) A wheat shortage or surplus is always the result of federal government policies. 
E) Hurricane Irene caused more damage in the United States than Hurricane Katrina.

Question 17

Which of the following is a positive statement?

Accepted Answer

A) Low rents restrict the supply of housing. 
B) Low rents are better for a city than high rents. 
C) Housing costs too much. 
D) Owners of apartment buildings ought to be free to charge whatever rent they want. 
E) Government should control the rents that apartment owners charge. 
A) Low rents restrict the supply of housing. 
B) Low rents are better for a city than high rents. 
C) Housing costs too much. 
D) Owners of apartment buildings ought to be free to charge whatever rent they want. 
E) Government should control the rents that apartment owners charge.

Question 18

Use the figure below to answer the following questions.
   
Figure 1A.3.3
-In Figure 1A.3.3, the slope across arc AB is

Accepted Answer

A) 1/2. 
B) 1. 
C) 3/2. 
D) 5/2. 
E) 5/3. 
A) 1/2. 
B) 1. 
C) 3/2. 
D) 5/2. 
E) 5/3.

Question 19

Use the figure below to answer the following question.
   
Figure 1A.2.5
-Refer to Figure 1A.2.5. Which one of the following statements is true?

Accepted Answer

A) x and y are positively related at all points between A and D. 
B) x and y are negatively related at all points between points B and D. 
C) y reaches a maximum at point C. 
D) y reaches a minimum at point C. 
E) x and y are unrelated. 
A) x and y are positively related at all points between A and D. 
B) x and y are negatively related at all points between points B and D. 
C) y reaches a maximum at point C. 
D) y reaches a minimum at point C. 
E) x and y are unrelated.

Question 20

Use the table below to answer the following questions.
Table 1A.4.2
  
-Given the data in Table 1A.4.2, suppose family income decreases from $400 to $300 per week. Then the graph relating the price of strawberries, measured on the y-axis and the number of boxes of strawberries purchased, measured on the x-axis will

Accepted Answer

A) become negatively sloped. 
B) become positively sloped. 
C) shift rightward. 
D) shift leftward. 
E) no longer exist. 
A) become negatively sloped. 
B) become positively sloped. 
C) shift rightward. 
D) shift leftward. 
E) no longer exist.

Exam 1: What Is Economics

Marginal benefit is

Which statement about incomes earned by factors of production is false?

Operators of private dog parks in your city decide to eliminate their fees and allow dog owners to exercise their dogs in the parks at no charge. This statement means that the incentive to exercise dogs at the dog park ________. The operators' decision is a ________.

Choose the correct statement.

The creation of a successful movie can influence the main questions that economics seeks to answer. Choose the statement that is false.

Use the figure below to answer the following question. Figure 1A.5.5 -Refer to Figure 1A.5.5. The graph shows the relationship between two variables, x and y. Which of the following equations describes this relationship?

Select the best statement about economic models.

Which of the following relates factors of production to the sources of income correctly?

Use the figure below to answer the following questions. Figure 1A.2.1 -Refer to Figure 1A.2.1. If x decreases from 5 to 4, y

If the equation of a straight line is y = 8 - 2x, then the slope is

The problem of scarcity exists

At all points along a straight line, slope is

The change in the value of the variable measured on the y- axis divided by the change in the value of the variable measured on the x-axis is

Use the figure below to answer the following question. Figure 1A.3.8 -The slope of the line in Figure 1A.3.8 is

Which of the following is a normative statement?

Which of the following is a positive statement?

Use the figure below to answer the following questions. Figure 1A.3.3 -In Figure 1A.3.3, the slope across arc AB is

Use the figure below to answer the following question. Figure 1A.2.5 -Refer to Figure 1A.2.5. Which one of the following statements is true?

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

Filters

Operators of private dog parks in your city decide to eliminate their fees and allow dog owners to exercise their dogs in the parks at no charge. This statement means that the incentive to exercise dogs at the dog park . The operators' decision is a .