Question 1

The opportunity cost of a decision is the value of the best forgone alternative.

Accepted Answer

A) True 
 B)False

Question 2

Human capital consists of computers,tools,and equipment owned by private individuals.

Accepted Answer

A) True 
 B)False

Question 3

Since resources are abundant,we do not have to make choices about their use.

Accepted Answer

A) True 
 B)False

Question 4

Farmer Ed could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on a hectare of his land.The price of wheat is $2.00 per bushel and the price of barley $0.80.Show the benefits to Ed from specialization.What should he specialize in?

Accepted Answer

Farmer Ed could make $150 if he grew onl

Question 5

"If I didn't have class tonight,I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." What is the opportunity cost of attending class tonight?

Accepted Answer

A) $0 
B) $4 
C) $40 
D) $44 
A) $0 
B) $4 
C) $40 
D) $44

Question 6

What do economists mean when they state that a good is scarce?

Accepted Answer

A) People will want to buy more of the good regardless of price. 
B) It is impossible to expand the availability of the good. 
C) Our wants exceed our limited resources. 
D) There is a shortage of the good at a sale price. 
A) People will want to buy more of the good regardless of price. 
B) It is impossible to expand the availability of the good. 
C) Our wants exceed our limited resources. 
D) There is a shortage of the good at a sale price.

Question 7

Which of the following is NOT an example of a factor of production?

Accepted Answer

A) the land ploughed by a farmer in order to grow corn 
B) the chief executive officer of a large corporation 
C) an office building 
D) a product's price 
A) the land ploughed by a farmer in order to grow corn 
B) the chief executive officer of a large corporation 
C) an office building 
D) a product's price

Question 8

Which of the following most accurately describes a "scarce" good?

Accepted Answer

A) a good for which available resources are insufficient to satisfy unlimited human desires for it 
B) a good that is always in demand at any price 
C) a good for which there is a shortage at the current market price 
D) a good for which it is impossible to increase production any further given the available resources and technology 
A) a good for which available resources are insufficient to satisfy unlimited human desires for it 
B) a good that is always in demand at any price 
C) a good for which there is a shortage at the current market price 
D) a good for which it is impossible to increase production any further given the available resources and technology

Question 9

Scarcity is a problem faced by all but the wealthiest of citizens.

Accepted Answer

A) True 
 B)False

Question 10

How do microeconomics and macroeconomics differ?

Accepted Answer

A) Microeconomics is concerned with consumer behaviour, while macroeconomics is concerned with firm behaviour. 
B) Microeconomics utilizes positive economic analysis, while macroeconomics utilizes normative economic analysis. 
C) Microeconomics studies aggregate decision making, while macroeconomics examines individual decision making. 
D) Microeconomics studies individual decision making, while macroeconomics examines aggregate decision making. 
A) Microeconomics is concerned with consumer behaviour, while macroeconomics is concerned with firm behaviour. 
B) Microeconomics utilizes positive economic analysis, while macroeconomics utilizes normative economic analysis. 
C) Microeconomics studies aggregate decision making, while macroeconomics examines individual decision making. 
D) Microeconomics studies individual decision making, while macroeconomics examines aggregate decision making.

Question 11

Which of the following statements most likely lies within the realm of macroeconomics?

Accepted Answer

A) Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
B) Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
C) An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
D) Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. 
A) Due to process innovations in computer chip manufacturing, the market supply of computers increased. 
B) Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. 
C) An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. 
D) Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

Question 12

Economists believe that people respond to incentives in predictable ways.Therefore,if the government imposed a tax on each child born,what would an economist expect to happen?

Accepted Answer

A) Families would have the same number of children, but spaced further apart. 
B) Families would have the same number of children, but wait longer to begin having them. 
C) Fewer children would be born. 
D) More children would be born, but spaced further apart. 
A) Families would have the same number of children, but spaced further apart. 
B) Families would have the same number of children, but wait longer to begin having them. 
C) Fewer children would be born. 
D) More children would be born, but spaced further apart.

Question 13

TABLE 1-5
  
-Refer to Table 1-5.What does the table demonstrate?

Accepted Answer

A) More apples are purchased as the price declines. 
B) Fewer apples are purchased as the price declines. 
C) More apples are purchased at each and every price. 
D) Fewer apples are purchased at each and every price. 
A) More apples are purchased as the price declines. 
B) Fewer apples are purchased as the price declines. 
C) More apples are purchased at each and every price. 
D) Fewer apples are purchased at each and every price.

Question 14

If Jared declines to purchase a new bicycle priced at $200,according to the rule of rational choice,what will be the expected marginal benefit of the bicycle for Jared?

Accepted Answer

A) less than $250 
B) less than $100 
C) less than $200 
D) more than $200 
A) less than $250 
B) less than $100 
C) less than $200 
D) more than $200

Question 15

What does the term "ceteris paribus" mean?

Accepted Answer

A) Everything is variable. 
B) What is true for the individual is not necessarily true for the whole. 
C) All variables except those specified are constant. 
D) No one knows which variables will change and which will remain constant. 
A) Everything is variable. 
B) What is true for the individual is not necessarily true for the whole. 
C) All variables except those specified are constant. 
D) No one knows which variables will change and which will remain constant.

Question 16

What is the primary concern of economics?

Accepted Answer

A) studying limited desires in the face of unlimited resources 
B) studying problems such as poverty and unemployment 
C) studying production and distribution of goods in a world of unlimited resources 
D) studying production and distribution of goods in a world of limited resources 
A) studying limited desires in the face of unlimited resources 
B) studying problems such as poverty and unemployment 
C) studying production and distribution of goods in a world of unlimited resources 
D) studying production and distribution of goods in a world of limited resources

Question 17

Which of the following best describes macroeconomics?

Accepted Answer

A) It is narrower in scope than microeconomics. 
B) It is concerned with the expansion of a small sole proprietorship into a large corporation. 
C) It is concerned with the expansion and contraction of the overall economy. 
D) It analyzes mergers and acquisitions between firms. 
A) It is narrower in scope than microeconomics. 
B) It is concerned with the expansion of a small sole proprietorship into a large corporation. 
C) It is concerned with the expansion and contraction of the overall economy. 
D) It analyzes mergers and acquisitions between firms.

Question 18

A theory asserts that manufacturers are less willing to sell units of output as the price of goods decreases.However,as the price of computers fell throughout the 1990s,more computers were sold.Which of the following explanations of the apparent conflict between theory and data is most accurate?

Accepted Answer

A) It is likely that variables other than the price and quantity of computers sold were changing. 
B) The theory must be invalid. 
C) The theory rests on assumptions that are too simplistic. 
D) All variables other than the price and quantity of computers sold were unchanged. 
A) It is likely that variables other than the price and quantity of computers sold were changing. 
B) The theory must be invalid. 
C) The theory rests on assumptions that are too simplistic. 
D) All variables other than the price and quantity of computers sold were unchanged.

Question 19

Which of the following is most likely a topic of discussion in macroeconomics?

Accepted Answer

A) an increase in the price of food 
B) a decrease in the production of DVD players by a consumer electronics company 
C) a decrease in the unemployment rate 
D) an increase in the wage rate paid to automobile workers 
A) an increase in the price of food 
B) a decrease in the production of DVD players by a consumer electronics company 
C) a decrease in the unemployment rate 
D) an increase in the wage rate paid to automobile workers

Question 20

Identify whether each of the following topics would be primarily a concern of microeconomics or macroeconomics:
a.The decision by a household to eat in rather than go out for dinner this evening.
b.The unemployment rate increased from 4.5 to 4.8 percent.
c.A decision by the Bank of Canada to decrease the supply of money in the economy.
d.The general level of prices increased by 5 percent last year.
e.The price of bicycles increased by $30 last year.
f. The family restaurant chain closed down after losing much of its customer base to fast-food competitors over the last few years.

Accepted Answer

Microeconomic topics

The opportunity cost of a decision is the value of the best forgone alternative.

Human capital consists of computers,tools,and equipment owned by private individuals.

Since resources are abundant,we do not have to make choices about their use.

Farmer Ed could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on a hectare of his land.The price of wheat is $2.00 per bushel and the price of barley $0.80.Show the benefits to Ed from specialization.What should he specialize in?

"If I didn't have class tonight,I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." What is the opportunity cost of attending class tonight?

What do economists mean when they state that a good is scarce?

Which of the following is NOT an example of a factor of production?

Which of the following most accurately describes a "scarce" good?

Scarcity is a problem faced by all but the wealthiest of citizens.

How do microeconomics and macroeconomics differ?

Which of the following statements most likely lies within the realm of macroeconomics?

Economists believe that people respond to incentives in predictable ways.Therefore,if the government imposed a tax on each child born,what would an economist expect to happen?

TABLE 1-5 -Refer to Table 1-5.What does the table demonstrate?

If Jared declines to purchase a new bicycle priced at $200,according to the rule of rational choice,what will be the expected marginal benefit of the bicycle for Jared?

What does the term "ceteris paribus" mean?

What is the primary concern of economics?

Which of the following best describes macroeconomics?

A theory asserts that manufacturers are less willing to sell units of output as the price of goods decreases.However,as the price of computers fell throughout the 1990s,more computers were sold.Which of the following explanations of the apparent conflict between theory and data is most accurate?

Which of the following is most likely a topic of discussion in macroeconomics?

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

The opportunity cost of a decision is the value of the best forgone alternative.

Human capital consists of computers,tools,and equipment owned by private individuals.

Since resources are abundant,we do not have to make choices about their use.

Farmer Ed could grow wheat and barley.He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on a hectare of his land.The price of wheat is $2.00 per bushel and the price of barley $0.80.Show the benefits to Ed from specialization.What should he specialize in?

"If I didn't have class tonight,I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." What is the opportunity cost of attending class tonight?

What do economists mean when they state that a good is scarce?

Which of the following is NOT an example of a factor of production?

Which of the following most accurately describes a "scarce" good?

Scarcity is a problem faced by all but the wealthiest of citizens.

How do microeconomics and macroeconomics differ?

Which of the following statements most likely lies within the realm of macroeconomics?

Economists believe that people respond to incentives in predictable ways.Therefore,if the government imposed a tax on each child born,what would an economist expect to happen?

TABLE 1-5 -Refer to Table 1-5.What does the table demonstrate?

If Jared declines to purchase a new bicycle priced at $200,according to the rule of rational choice,what will be the expected marginal benefit of the bicycle for Jared?

What does the term "ceteris paribus" mean?

What is the primary concern of economics?

Which of the following best describes macroeconomics?

A theory asserts that manufacturers are less willing to sell units of output as the price of goods decreases.However,as the price of computers fell throughout the 1990s,more computers were sold.Which of the following explanations of the apparent conflict between theory and data is most accurate?

Which of the following is most likely a topic of discussion in macroeconomics?

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