Question 1

A beer at the hockey arena costs $5 each.According to the rule of rational choice,when will Cynthia stop drinking beer?

Accepted Answer

A) when the marginal benefit received from consuming peanuts with beer just equals $5 
B) when the marginal cost of an additional beer is less than $5 
C) when the marginal benefit of an additional beer equals zero 
D) when the marginal benefit of an additional beer falls below $5 
A) when the marginal benefit received from consuming peanuts with beer just equals $5 
B) when the marginal cost of an additional beer is less than $5 
C) when the marginal benefit of an additional beer equals zero 
D) when the marginal benefit of an additional beer falls below $5

Question 2

Which of the following statements about scarcity is the most accurate?

Accepted Answer

A) It is a problem that solely exits in the developing world. 
B) It is only a problem in centrally planned economies. 
C) It is a problem that necessitates making choices and trade-offs. 
D) It is only a problem in modern industrialized economies. 
A) It is a problem that solely exits in the developing world. 
B) It is only a problem in centrally planned economies. 
C) It is a problem that necessitates making choices and trade-offs. 
D) It is only a problem in modern industrialized economies.

Question 3

What is the result of economic choices or trade-offs?

Accepted Answer

A) poverty 
B) basic human greed 
C) scarcity 
D) private ownership of resources 
A) poverty 
B) basic human greed 
C) scarcity 
D) private ownership of resources

Question 4

Which of the following statements describing correlation is the most accurate?

Accepted Answer

A) Two sets of phenomena may be related, but one does not necessarily cause the other. 
B) When two phenomena are not observed together, one still causes the other. 
C) When two phenomena are repeatedly observed together, one must cause the other. 
D) Two sets of phenomena are not related and one may in fact cause the other. 
A) Two sets of phenomena may be related, but one does not necessarily cause the other. 
B) When two phenomena are not observed together, one still causes the other. 
C) When two phenomena are repeatedly observed together, one must cause the other. 
D) Two sets of phenomena are not related and one may in fact cause the other.

Question 5

If Spain can produce a particular product at a lower relative cost than Portugal,what kind of advantage does Spain have?

Accepted Answer

A) an absolute advantage in its production 
B) a resource advantage for all goods 
C) a production advantage for all goods 
D) a comparative advantage in its production 
A) an absolute advantage in its production 
B) a resource advantage for all goods 
C) a production advantage for all goods 
D) a comparative advantage in its production

Question 6

Which of the following statements about economics is the most accurate?

Accepted Answer

A) It is concerned with predicting business conditions in the future, not with the current state of the stock market. 
B) It is a natural science like biology and chemistry. 
C) It is composed of two main branches known as positive and normative economics. 
D) It is a science concerned with reaching generalizations about human behaviour, not unlike sociology or psychology. 
A) It is concerned with predicting business conditions in the future, not with the current state of the stock market. 
B) It is a natural science like biology and chemistry. 
C) It is composed of two main branches known as positive and normative economics. 
D) It is a science concerned with reaching generalizations about human behaviour, not unlike sociology or psychology.

Question 7

Which of the following lies primarily within the realm of macroeconomics?

Accepted Answer

A) a study of the elasticity of demand for gasoline 
B) a study of how tax cuts stimulate aggregate production 
C) a study of the impact of "mad cow" disease on the price of beef worldwide 
D) an analysis of supply and demand conditions in the electricity market 
A) a study of the elasticity of demand for gasoline 
B) a study of how tax cuts stimulate aggregate production 
C) a study of the impact of "mad cow" disease on the price of beef worldwide 
D) an analysis of supply and demand conditions in the electricity market

Question 8

Which topic does microeconomics NOT usually include?

Accepted Answer

A) the determinants of the demand for DVD players by consumers 
B) the impact of large government budget deficits on private investment spending 
C) the regulation of monopoly firms 
D) the determinants of the supply of wheat by farmers 
A) the determinants of the demand for DVD players by consumers 
B) the impact of large government budget deficits on private investment spending 
C) the regulation of monopoly firms 
D) the determinants of the supply of wheat by farmers

Question 9

Which of the following best describes scarcity?

Accepted Answer

A) Human desires are limited. 
B) All but the very wealthy must face choices. 
C) Resources are insufficient to satisfy all human desires. 
D) Choices are unnecessary. 
A) Human desires are limited. 
B) All but the very wealthy must face choices. 
C) Resources are insufficient to satisfy all human desires. 
D) Choices are unnecessary.

Question 10

If you were an employer,what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Accepted Answer

An employer might provide on-site traini

Question 11

Which of the following is NOT a factor of production?

Accepted Answer

A) cash 
B) labour 
C) land 
D) entrepreneurship 
A) cash 
B) labour 
C) land 
D) entrepreneurship

Question 12

What is the term for the ability to produce at a lower opportunity cost than someone else?

Accepted Answer

A) competitive disadvantage 
B) absolute advantage 
C) absolute superiority 
D) comparative advantage 
A) competitive disadvantage 
B) absolute advantage 
C) absolute superiority 
D) comparative advantage

Question 13

How does an economist define a good economic theory?

Accepted Answer

A) an abstraction from reality useful for explaining but not predicting behaviour (since theories are too simplistic) 
B) an opinion that can be tested against economic data 
C) an abstraction for the sake of argument 
D) a statement or relationship that is used to explain and predict human behaviour 
A) an abstraction from reality useful for explaining but not predicting behaviour (since theories are too simplistic) 
B) an opinion that can be tested against economic data 
C) an abstraction for the sake of argument 
D) a statement or relationship that is used to explain and predict human behaviour

Question 14

Which of the following statements about scarcity is the most accurate?

Accepted Answer

A) It occurs only in centrally planned economies. 
B) It will likely be eliminated by technological progress. 
C) It occurs if there are insufficient resources to provide for human wants. 
D) It exists only in poor nations. 
A) It occurs only in centrally planned economies. 
B) It will likely be eliminated by technological progress. 
C) It occurs if there are insufficient resources to provide for human wants. 
D) It exists only in poor nations.

Question 15

What would an economist predict would happen if airfares to Europe were to increase?

Accepted Answer

A) Airlines would make significantly greater profits. 
B) Most people would not change their travel and vacation plans. 
C) More individuals would choose to fly to Europe because now it is a more valuable experience. 
D) Many individuals would substitute toward other travel destinations. 
A) Airlines would make significantly greater profits. 
B) Most people would not change their travel and vacation plans. 
C) More individuals would choose to fly to Europe because now it is a more valuable experience. 
D) Many individuals would substitute toward other travel destinations.

Question 16

What is the term for the highest valued alternative sacrificed as a result of a choice?

Accepted Answer

A) the explicit cost, which can be objectively measured by anyone 
B) the explicit cost, which can be subjectively measured only by the individual who chooses 
C) the opportunity cost, which can be subjectively measured only by the individual who chooses 
D) the opportunity cost, which can be objectively measured by anyone 
A) the explicit cost, which can be objectively measured by anyone 
B) the explicit cost, which can be subjectively measured only by the individual who chooses 
C) the opportunity cost, which can be subjectively measured only by the individual who chooses 
D) the opportunity cost, which can be objectively measured by anyone

Question 17

How is an economic hypothesis tested?

Accepted Answer

A) by comparing the hypothesis's prediction to real-world data 
B) by using a controlled experiment 
C) by assessing the realism of its assumptions 
D) by assessing the level of descriptive detail 
A) by comparing the hypothesis's prediction to real-world data 
B) by using a controlled experiment 
C) by assessing the realism of its assumptions 
D) by assessing the level of descriptive detail

Question 18

Prices communicate information about relative availability of products.What does a decrease in the price of corn signal to consumers and producers?

Accepted Answer

A) that consumers are stocking up on corn because of the predictions of a cold winter 
B) that consumers are buying more corn than before 
C) that corn is relatively less abundant than before 
D) that corn is relatively more abundant than before 
A) that consumers are stocking up on corn because of the predictions of a cold winter 
B) that consumers are buying more corn than before 
C) that corn is relatively less abundant than before 
D) that corn is relatively more abundant than before

Question 19

Which of the following statements about the rule of rational choice is the most accurate?

Accepted Answer

A) It requires the availability of complete information before decisions can be made. 
B) It includes marginal benefits but not marginal costs. 
C) It involves marginal thinking. 
D) It can only be applied in business decisions. 
A) It requires the availability of complete information before decisions can be made. 
B) It includes marginal benefits but not marginal costs. 
C) It involves marginal thinking. 
D) It can only be applied in business decisions.

Question 20

Which of the following is an example of a capital resource?

Accepted Answer

A) a dump truck 
B) a bond issued by a company selling electric generators 
C) the funds in a savings account at a bank 
D) stock in a computer software company 
A) a dump truck 
B) a bond issued by a company selling electric generators 
C) the funds in a savings account at a bank 
D) stock in a computer software company

A beer at the hockey arena costs $5 each.According to the rule of rational choice,when will Cynthia stop drinking beer?

Which of the following statements about scarcity is the most accurate?

What is the result of economic choices or trade-offs?

Which of the following statements describing correlation is the most accurate?

If Spain can produce a particular product at a lower relative cost than Portugal,what kind of advantage does Spain have?

Which of the following statements about economics is the most accurate?

Which of the following lies primarily within the realm of macroeconomics?

Which topic does microeconomics NOT usually include?

Which of the following best describes scarcity?

If you were an employer,what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Which of the following is NOT a factor of production?

What is the term for the ability to produce at a lower opportunity cost than someone else?

How does an economist define a good economic theory?

Which of the following statements about scarcity is the most accurate?

What would an economist predict would happen if airfares to Europe were to increase?

What is the term for the highest valued alternative sacrificed as a result of a choice?

How is an economic hypothesis tested?

Prices communicate information about relative availability of products.What does a decrease in the price of corn signal to consumers and producers?

Which of the following statements about the rule of rational choice is the most accurate?

Which of the following is an example of a capital resource?

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 1: The Role and Method of Economics

A beer at the hockey arena costs $5 each.According to the rule of rational choice,when will Cynthia stop drinking beer?

Which of the following statements about scarcity is the most accurate?

What is the result of economic choices or trade-offs?

Which of the following statements describing correlation is the most accurate?

If Spain can produce a particular product at a lower relative cost than Portugal,what kind of advantage does Spain have?

Which of the following statements about economics is the most accurate?

Which of the following lies primarily within the realm of macroeconomics?

Which topic does microeconomics NOT usually include?

Which of the following best describes scarcity?

If you were an employer,what are some ways that you might help your employees invest in human capital? How does investment in human capital benefit an employer?

Which of the following is NOT a factor of production?

What is the term for the ability to produce at a lower opportunity cost than someone else?

How does an economist define a good economic theory?

Which of the following statements about scarcity is the most accurate?

What would an economist predict would happen if airfares to Europe were to increase?

What is the term for the highest valued alternative sacrificed as a result of a choice?

How is an economic hypothesis tested?

Prices communicate information about relative availability of products.What does a decrease in the price of corn signal to consumers and producers?

Which of the following statements about the rule of rational choice is the most accurate?

Which of the following is an example of a capital resource?

Scarcity, trade-Offs, and Production Possibilities

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters