Question 1

Why is money NOT considered to be an economic resource?

Accepted Answer

A) Money is produced by the Bank of Canada. 
B) Money loses its value too easily due to inflation. 
C) Money is an intangible good. 
D) Money is not directly used to produce goods and services. 
A) Money is produced by the Bank of Canada. 
B) Money loses its value too easily due to inflation. 
C) Money is an intangible good. 
D) Money is not directly used to produce goods and services.

Question 2

How does microeconomics relate to macroeconomics?

Accepted Answer

Microeconomics primarily examines the be

Question 3

Which of the following statements about criminal behaviour describes what economists believe?

Accepted Answer

A) Economics can shed very little light on the subject. 
B) Those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs. 
C) Individuals are irrational and don't respond to incentives. 
D) People engage in criminal activity because they are genetically predisposed to do so. 
A) Economics can shed very little light on the subject. 
B) Those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs. 
C) Individuals are irrational and don't respond to incentives. 
D) People engage in criminal activity because they are genetically predisposed to do so.

Question 4

What is the term for the additional cost incurred as a result of undertaking an action?

Accepted Answer

A) the total cost 
B) the gross cost 
C) the marginal cost 
D) the marginal benefit 
A) the total cost 
B) the gross cost 
C) the marginal cost 
D) the marginal benefit

Question 5

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

Accepted Answer

A) It can be objectively determined only by economists. 
B) It can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. 
C) It is a subjective valuation that can be determined only by the individual who chooses the action. 
D) It can be determined by adding up the bills incurred as a result of the action. 
A) It can be objectively determined only by economists. 
B) It can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. 
C) It is a subjective valuation that can be determined only by the individual who chooses the action. 
D) It can be determined by adding up the bills incurred as a result of the action.

Question 6

Which of the following is an example of physical capital?

Accepted Answer

A) a cheeseburger 
B) a chainsaw 
C) a $100 bill 
D) a stock certificate 
A) a cheeseburger 
B) a chainsaw 
C) a $100 bill 
D) a stock certificate

Question 7

What is implied by the expression,"There's no such thing as a free lunch"?

Accepted Answer

A) Costs are incurred when resources are used to produce goods and services. 
B) No one has time for a good lunch anymore. 
C) The person consuming a good must always pay for it. 
D) Everyone has to pay for his/her own lunch. 
A) Costs are incurred when resources are used to produce goods and services. 
B) No one has time for a good lunch anymore. 
C) The person consuming a good must always pay for it. 
D) Everyone has to pay for his/her own lunch.

Question 8

In a market system,how are decisions about how to allocate resources made?

Accepted Answer

A) by individuals and firms interacting in markets coordinated by market prices 
B) by central planning boards in each industry 
C) by a lottery system 
D) by large conglomerates working cooperatively with the government 
A) by individuals and firms interacting in markets coordinated by market prices 
B) by central planning boards in each industry 
C) by a lottery system 
D) by large conglomerates working cooperatively with the government

Question 9

Most students expect that if they spend more time studying,the outcome will be improved grades in the course.What does this suppose?

Accepted Answer

A) Grades are independent variables. 
B) A negative relationship exists between studying and grades. 
C) A positive relationship exists between studying and grades. 
D) Grades are not dependent variables. 
A) Grades are independent variables. 
B) A negative relationship exists between studying and grades. 
C) A positive relationship exists between studying and grades. 
D) Grades are not dependent variables.

Question 10

Which of the following graphs or charts must add up to 100 percent?

Accepted Answer

A) a labour graph 
B) a time-series graph 
C) a bar graph 
D) a pie chart 
A) a labour graph 
B) a time-series graph 
C) a bar graph 
D) a pie chart

Question 11

How do price controls undermine the market as a communication device?

Accepted Answer

The imposition of price contro

Question 12

What is the likely reason that airlines might restrict the use of frequent flyer miles during holiday periods?

Accepted Answer

A) The opportunity cost to airlines of filling seats with frequent flyers is lower at these times. 
B) Airlines want to protect their most loyal customers from the discomfort of overcrowded airplanes. 
C) The opportunity cost to airlines of filling seats with frequent flyers is higher at these times. 
D) Passengers have more transportation alternatives available to them at these times. 
A) The opportunity cost to airlines of filling seats with frequent flyers is lower at these times. 
B) Airlines want to protect their most loyal customers from the discomfort of overcrowded airplanes. 
C) The opportunity cost to airlines of filling seats with frequent flyers is higher at these times. 
D) Passengers have more transportation alternatives available to them at these times.

Question 13

Which of the following is an example of a positive incentive?

Accepted Answer

A) You expect to receive a scholarship if your grades remain high. 
B) Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
C) Campus police institute a policy of impounding cars parked in delivery-zone spaces. 
D) You expect to be grounded if your grades slip below a "B" average. 
A) You expect to receive a scholarship if your grades remain high. 
B) Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. 
C) Campus police institute a policy of impounding cars parked in delivery-zone spaces. 
D) You expect to be grounded if your grades slip below a "B" average.

Question 14

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Accepted Answer

A) True 
 B)False

Question 15

What is the definition of a theory?

Accepted Answer

A) It is an untestable assertion or statement of untestable fact. 
B) It is a normative statement that can be tested empirically through analysis of real-world data. 
C) It is a testable statement that can be definitively proven to be true or false using empirical analysis. 
D) It is a deliberate simplification of factual relationships that attempts to explain and predict how those relationships work. 
A) It is an untestable assertion or statement of untestable fact. 
B) It is a normative statement that can be tested empirically through analysis of real-world data. 
C) It is a testable statement that can be definitively proven to be true or false using empirical analysis. 
D) It is a deliberate simplification of factual relationships that attempts to explain and predict how those relationships work.

Question 16

Most disagreements among economists stem from normative issues.

Accepted Answer

A) True 
 B)False

Question 17

What does the opportunity cost of an action include?

Accepted Answer

A) the highest valued alternative use of the time spent on the action 
B) the total benefits received as a result of the action 
C) the lowest valued alternative use of the time spent on the action 
D) the net benefits received as a result of the action 
A) the highest valued alternative use of the time spent on the action 
B) the total benefits received as a result of the action 
C) the lowest valued alternative use of the time spent on the action 
D) the net benefits received as a result of the action

Question 18

TABLE 1-1
  
-Refer to Table 1-1.A student has only a few hours to prepare for two different exams tomorrow morning.The above table shows alternative possible exam outcomes with three alternative uses of the student's time.What is the opportunity cost of scoring an 84 on the history exam rather than a 76?

Accepted Answer

A) 10 points on the economics exam 
B) 8 points on the history exam 
C) 7 points on the economics exam 
D) 12 points on the economics exam 
A) 10 points on the economics exam 
B) 8 points on the history exam 
C) 7 points on the economics exam 
D) 12 points on the economics exam

Question 19

Which area of study is most concerned with measuring the rate of inflation?

Accepted Answer

A) macroeconomics 
B) microeconomics 
C) normative economics 
D) positive economics 
A) macroeconomics 
B) microeconomics 
C) normative economics 
D) positive economics

Question 20

Litres of milk at a local grocery store are priced at one for $2 or two for $3.What is the marginal cost of buying a second litre of milk?

Accepted Answer

A) $0 
B) $1 
C) $2 
D) $3 
A) $0 
B) $1 
C) $2 
D) $3

Why is money NOT considered to be an economic resource?

How does microeconomics relate to macroeconomics?

Which of the following statements about criminal behaviour describes what economists believe?

What is the term for the additional cost incurred as a result of undertaking an action?

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

Which of the following is an example of physical capital?

What is implied by the expression,"There's no such thing as a free lunch"?

In a market system,how are decisions about how to allocate resources made?

Most students expect that if they spend more time studying,the outcome will be improved grades in the course.What does this suppose?

Which of the following graphs or charts must add up to 100 percent?

How do price controls undermine the market as a communication device?

What is the likely reason that airlines might restrict the use of frequent flyer miles during holiday periods?

Which of the following is an example of a positive incentive?

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

What is the definition of a theory?

Most disagreements among economists stem from normative issues.

What does the opportunity cost of an action include?

Which area of study is most concerned with measuring the rate of inflation?

Litres of milk at a local grocery store are priced at one for $2 or two for $3.What is the marginal cost of buying a second litre of milk?

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

Why is money NOT considered to be an economic resource?

How does microeconomics relate to macroeconomics?

Which of the following statements about criminal behaviour describes what economists believe?

What is the term for the additional cost incurred as a result of undertaking an action?

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

Which of the following is an example of physical capital?

What is implied by the expression,"There's no such thing as a free lunch"?

In a market system,how are decisions about how to allocate resources made?

Most students expect that if they spend more time studying,the outcome will be improved grades in the course.What does this suppose?

Which of the following graphs or charts must add up to 100 percent?

How do price controls undermine the market as a communication device?

What is the likely reason that airlines might restrict the use of frequent flyer miles during holiday periods?

Which of the following is an example of a positive incentive?

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

What is the definition of a theory?

Most disagreements among economists stem from normative issues.

What does the opportunity cost of an action include?

Which area of study is most concerned with measuring the rate of inflation?

Litres of milk at a local grocery store are priced at one for $2 or two for $3.What is the marginal cost of buying a second litre of milk?

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