Question 1

What is the marginal benefit of a slice of pizza?

Accepted Answer

A) the price of the slice of pizza 
B) the total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices 
C) the maximum amount that a consumer is willing to pay for the slice 
D) the difference between the value of the slice to the consumer and the price of the slice 
A) the price of the slice of pizza 
B) the total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices 
C) the maximum amount that a consumer is willing to pay for the slice 
D) the difference between the value of the slice to the consumer and the price of the slice

Question 2

In a market system,which of the following is a symptom of market failure?

Accepted Answer

A) competition 
B) scarcity of resources 
C) falling prices 
D) air pollution 
A) competition 
B) scarcity of resources 
C) falling prices 
D) air pollution

Question 3

Why do economists need to develop abstractions?

Accepted Answer

A) to avoid analyzing real-world economic interactions, which are too complicated to understand 
B) to understand and explain economic behaviour 
C) to avoid committing the fallacy of composition 
D) to distinguish normative economic behaviour from positive economic behaviour 
A) to avoid analyzing real-world economic interactions, which are too complicated to understand 
B) to understand and explain economic behaviour 
C) to avoid committing the fallacy of composition 
D) to distinguish normative economic behaviour from positive economic behaviour

Question 4

Saudi Arabia has a comparative advantage in oil production and China has a comparative advantage in electronics.Which of the following statements about specialization and trade is NOT correct?

Accepted Answer

A) These two countries should trade because it will free up time in both countries. 
B) These two countries should trade because it will free up resources in both countries. 
C) These two countries should trade since prices would be higher and each can make higher revenues. 
D) The two countries should trade and the workers in each country will become more skilled due to repetition. 
A) These two countries should trade because it will free up time in both countries. 
B) These two countries should trade because it will free up resources in both countries. 
C) These two countries should trade since prices would be higher and each can make higher revenues. 
D) The two countries should trade and the workers in each country will become more skilled due to repetition.

Question 5

When economists disagree,it is often over what type of issues?

Accepted Answer

Economists generally disagree

Question 6

What do economists use the term "ceteris paribus" to indicate?

Accepted Answer

A) Supply and demand are in balance. 
B) Their conclusions are based on normative rather than positive economic analysis. 
C) Other things are assumed to remain constant. 
D) The analysis is true for the individual but not for the economy as a whole. 
A) Supply and demand are in balance. 
B) Their conclusions are based on normative rather than positive economic analysis. 
C) Other things are assumed to remain constant. 
D) The analysis is true for the individual but not for the economy as a whole.

Question 7

Explain the difference between poverty and scarcity.

Accepted Answer

People living in poverty have access to

Question 8

Which of the following best illustrates the fallacy of composition?

Accepted Answer

A) If the price of bread rose, consumers would buy less; if consumers bought less, the price of bread would rise. 
B) If Mr. Lewis produces more, he can consume more; if Mr. Lewis consumes more, he can produce more. 
C) If prices of houses went down, more people could afford houses; and if more people bought houses, the prices of houses would increase. 
D) If Mr. Lewis had more money, he would be wealthier; if a nation's money supply were larger, the people of the nation would be wealthier. 
A) If the price of bread rose, consumers would buy less; if consumers bought less, the price of bread would rise. 
B) If Mr. Lewis produces more, he can consume more; if Mr. Lewis consumes more, he can produce more. 
C) If prices of houses went down, more people could afford houses; and if more people bought houses, the prices of houses would increase. 
D) If Mr. Lewis had more money, he would be wealthier; if a nation's money supply were larger, the people of the nation would be wealthier.

Question 9

The opportunity cost of a decision is the value of all of the available alternatives that were not chosen.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a normative statement?

Accepted Answer

A) Running government budget deficits leads to higher market interest rates. 
B) An increase in taxes will cause higher unemployment. 
C) An increase in tariffs will increase the domestic prices paid by consumers. 
D) Income should be redistributed from the top 2 percent of wage earners to the lower income brackets. 
A) Running government budget deficits leads to higher market interest rates. 
B) An increase in taxes will cause higher unemployment. 
C) An increase in tariffs will increase the domestic prices paid by consumers. 
D) Income should be redistributed from the top 2 percent of wage earners to the lower income brackets.

Question 11

What does economics primarily explore?

Accepted Answer

A) how the government allocates its budget among competing political interests 
B) how stock and bond prices fluctuate when there are changes in demand or supply 
C) how goods and services are produced and distributed in a world with limited resources 
D) how businesses market products under competitive conditions 
A) how the government allocates its budget among competing political interests 
B) how stock and bond prices fluctuate when there are changes in demand or supply 
C) how goods and services are produced and distributed in a world with limited resources 
D) how businesses market products under competitive conditions

Question 12

Which of the following statements about the opportunity cost of an item is the most accurate?

Accepted Answer

A) It is the value of all available alternatives you sacrifice to get that item. 
B) It is always equal to the dollar value of the item. 
C) It is greater during periods of inflation and lower during periods of deflation. 
D) It is the highest valued alternative you give up to get that item. 
A) It is the value of all available alternatives you sacrifice to get that item. 
B) It is always equal to the dollar value of the item. 
C) It is greater during periods of inflation and lower during periods of deflation. 
D) It is the highest valued alternative you give up to get that item.

Question 13

Which of the following is an example of human capital?

Accepted Answer

A) 100 hectares of farmland in Central Ontario 
B) a pitch fork 
C) a commercial sewing machine 
D) the expertise of a computer programmer 
A) 100 hectares of farmland in Central Ontario 
B) a pitch fork 
C) a commercial sewing machine 
D) the expertise of a computer programmer

Question 14

Which statement about an economy's resources is the most accurate?

Accepted Answer

A) They consist of land, labour, capital, and entrepreneurial skills. 
B) They consist of land, labour, and entrepreneurial skills, but not capital. 
C) They are always efficiently utilized in wealthy nations. 
D) They are unlimited in a country like Canada. 
A) They consist of land, labour, capital, and entrepreneurial skills. 
B) They consist of land, labour, and entrepreneurial skills, but not capital. 
C) They are always efficiently utilized in wealthy nations. 
D) They are unlimited in a country like Canada.

Question 15

Marginal cost is the additional cost incurred as the result of producing one additional unit of a good or service.

Accepted Answer

A) True 
 B)False

Question 16

What is the term for the additional benefit received as a result of undertaking an action?

Accepted Answer

A) the marginal benefit 
B) the marginal cost 
C) the average benefit 
D) the opportunity cost 
A) the marginal benefit 
B) the marginal cost 
C) the average benefit 
D) the opportunity cost

Question 17

When does an individual have a comparative advantage in production?

Accepted Answer

A) when they are more self-sufficient than others 
B) when they can produce at the highest opportunity cost 
C) when they can produce at the lowest opportunity cost 
D) when they are less self-sufficient than others 
A) when they are more self-sufficient than others 
B) when they can produce at the highest opportunity cost 
C) when they can produce at the lowest opportunity cost 
D) when they are less self-sufficient than others

Question 18

Which of the following processes does marginal analysis involve?

Accepted Answer

A) comparing the additional benefit from an action to the additional cost 
B) comparing the total benefits of all actions to the total costs incurred as a result of those actions 
C) abstract thinking, which is never actually utilized by consumers when making purchasing decisions 
D) holding all other variables constant when isolating the relationship between two variables 
A) comparing the additional benefit from an action to the additional cost 
B) comparing the total benefits of all actions to the total costs incurred as a result of those actions 
C) abstract thinking, which is never actually utilized by consumers when making purchasing decisions 
D) holding all other variables constant when isolating the relationship between two variables

Question 19

Which topic does macroeconomics usually NOT include?

Accepted Answer

A) the rate of unemployment 
B) the rate of inflation 
C) the profit maximizing decisions of an individual manufacturer 
D) economic growth 
A) the rate of unemployment 
B) the rate of inflation 
C) the profit maximizing decisions of an individual manufacturer 
D) economic growth

Question 20

You lose $20 from your wallet and decide to miss an hour from work in order to search for it.What would an economist conclude from your behaviour?

Accepted Answer

A) You estimate the expected cost of searching for one hour to be greater than $20. 
B) In your estimation, the expected value of searching for the lost $20 for an hour is less than your hourly wage. 
C) You must earn more than $20 per hour. 
D) In your estimation, the expected value of searching for the lost $20 for an hour exceeds your hourly wage. 
A) You estimate the expected cost of searching for one hour to be greater than $20. 
B) In your estimation, the expected value of searching for the lost $20 for an hour is less than your hourly wage. 
C) You must earn more than $20 per hour. 
D) In your estimation, the expected value of searching for the lost $20 for an hour exceeds your hourly wage.

What is the marginal benefit of a slice of pizza?

In a market system,which of the following is a symptom of market failure?

Why do economists need to develop abstractions?

Saudi Arabia has a comparative advantage in oil production and China has a comparative advantage in electronics.Which of the following statements about specialization and trade is NOT correct?

When economists disagree,it is often over what type of issues?

What do economists use the term "ceteris paribus" to indicate?

Explain the difference between poverty and scarcity.

Which of the following best illustrates the fallacy of composition?

The opportunity cost of a decision is the value of all of the available alternatives that were not chosen.

Which of the following is a normative statement?

What does economics primarily explore?

Which of the following statements about the opportunity cost of an item is the most accurate?

Which of the following is an example of human capital?

Which statement about an economy's resources is the most accurate?

Marginal cost is the additional cost incurred as the result of producing one additional unit of a good or service.

What is the term for the additional benefit received as a result of undertaking an action?

When does an individual have a comparative advantage in production?

Which of the following processes does marginal analysis involve?

Which topic does macroeconomics usually NOT include?

You lose $20 from your wallet and decide to miss an hour from work in order to search for it.What would an economist conclude from your behaviour?

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

What is the marginal benefit of a slice of pizza?

In a market system,which of the following is a symptom of market failure?

Why do economists need to develop abstractions?

Saudi Arabia has a comparative advantage in oil production and China has a comparative advantage in electronics.Which of the following statements about specialization and trade is NOT correct?

When economists disagree,it is often over what type of issues?

What do economists use the term "ceteris paribus" to indicate?

Explain the difference between poverty and scarcity.

Which of the following best illustrates the fallacy of composition?

The opportunity cost of a decision is the value of all of the available alternatives that were not chosen.

Which of the following is a normative statement?

What does economics primarily explore?

Which of the following statements about the opportunity cost of an item is the most accurate?

Which of the following is an example of human capital?

Which statement about an economy's resources is the most accurate?

Marginal cost is the additional cost incurred as the result of producing one additional unit of a good or service.

What is the term for the additional benefit received as a result of undertaking an action?

When does an individual have a comparative advantage in production?

Which of the following processes does marginal analysis involve?

Which topic does macroeconomics usually NOT include?

You lose $20 from your wallet and decide to miss an hour from work in order to search for it.What would an economist conclude from your behaviour?

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