Question 1

Which topic does macroeconomics NOT generally include?

Accepted Answer

A) government spending and taxation 
B) aggregate demand 
C) the production decisions of individual firms 
D) inflation 
A) government spending and taxation 
B) aggregate demand 
C) the production decisions of individual firms 
D) inflation

Question 2

How should we judge the validity of a positive statement?

Accepted Answer

A) by determining whether it corresponds to our own ideas on ethics, religion, and political philosophy 
B) by ensuring there is no fallacy of composition 
C) by examining the professional credentials of the person who made the statement 
D) by analyzing the relevant data 
A) by determining whether it corresponds to our own ideas on ethics, religion, and political philosophy 
B) by ensuring there is no fallacy of composition 
C) by examining the professional credentials of the person who made the statement 
D) by analyzing the relevant data

Question 3

To be a positive economic statement,an assertion must be factual.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements about negative incentives is the most accurate?

Accepted Answer

A) They increase benefits or reduce costs. 
B) They increase benefits and increase costs 
C) They decrease benefits or increase costs. 
D) They include both cash subsidies and taxes. 
A) They increase benefits or reduce costs. 
B) They increase benefits and increase costs 
C) They decrease benefits or increase costs. 
D) They include both cash subsidies and taxes.

Question 5

When two variables repeatedly change at the same time,there must be a causal relationship between them.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) It concerns itself only with monetary decisions. 
B) It says very little about "everyday life." 
C) It is a narrowly focused discipline. 
D) It is a broad-ranging, problem-solving discipline. 
A) It concerns itself only with monetary decisions. 
B) It says very little about "everyday life." 
C) It is a narrowly focused discipline. 
D) It is a broad-ranging, problem-solving discipline.

Question 7

What is the opportunity cost of an action equal to?

Accepted Answer

A) the highest valued alternative sacrificed as a result of the action 
B) the sum of the benefits received as a result of the action 
C) the monetary benefit received as a result of the action 
D) the value of any alternative use of the time expended on the action 
A) the highest valued alternative sacrificed as a result of the action 
B) the sum of the benefits received as a result of the action 
C) the monetary benefit received as a result of the action 
D) the value of any alternative use of the time expended on the action

Question 8

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

Accepted Answer

A) It is another word for physical capital that is used to produce goods and services. 
B) It is human capital. 
C) It is another word for the financial capital that can be used to start a business. 
D) It is the resource that organizes the other factors of production in order to produce goods and/or services. 
A) It is another word for physical capital that is used to produce goods and services. 
B) It is human capital. 
C) It is another word for the financial capital that can be used to start a business. 
D) It is the resource that organizes the other factors of production in order to produce goods and/or services.

Question 9

What is the opportunity cost of an action equal to?

Accepted Answer

A) the highest valued opportunity that must be sacrificed in order to take the action 
B) the value of all of the alternative actions that could have been taken 
C) the total time spent by all parties in carrying out the action 
D) the monetary payment the action required 
A) the highest valued opportunity that must be sacrificed in order to take the action 
B) the value of all of the alternative actions that could have been taken 
C) the total time spent by all parties in carrying out the action 
D) the monetary payment the action required

Question 10

Prices communicate information about the relative value of resources in the marketplace.Which of the following would cause the value and,hence,the price of oranges to rise?
a.A freeze wipes out half of the Florida citrus groves.
b.Orange juice is shown to reduce blood cholesterol levels.
c.The price of grape, cranberry, and pineapple juice falls dramatically.

Accepted Answer

a)and b)would result in higher orange pr

Question 11

Which of the following statements best describes opportunity costs?

Accepted Answer

A) The opportunity cost of attending college is the same for all students at the same university but may differ among students at different universities. 
B) Some economic decisions have zero opportunity cost. 
C) The opportunity cost of a decision is the value of the best forgone alternative. 
D) The opportunity cost of a decision is equal to the explicit cost in monetary terms. 
A) The opportunity cost of attending college is the same for all students at the same university but may differ among students at different universities. 
B) Some economic decisions have zero opportunity cost. 
C) The opportunity cost of a decision is the value of the best forgone alternative. 
D) The opportunity cost of a decision is equal to the explicit cost in monetary terms.

Question 12

What does economics primarily study?

Accepted Answer

A) how to interpret corporate balance sheets and income statements 
B) how choices are made because of scarcity 
C) how to make money in the stock market 
D) how to operate a business 
A) how to interpret corporate balance sheets and income statements 
B) how choices are made because of scarcity 
C) how to make money in the stock market 
D) how to operate a business

Question 13

Which of the following is NOT a factor of production?

Accepted Answer

A) entrepreneurship 
B) capital 
C) legal institutions 
D) labour 
A) entrepreneurship 
B) capital 
C) legal institutions 
D) labour

Question 14

The marginal cost of a vacation in the south of France is $4500.If the marginal benefit to Druscilla of a vacation in the south of France is $4800,what will she do?

Accepted Answer

A) Druscilla will enjoy a net gain of $4800 if she vacations in the south of France. 
B) Druscilla will experience a net gain of $300 if she vacations in the south of France. 
C) Druscilla will lose $300 if she vacations in the south of France. 
D) Druscilla will be worse off if she vacations in the south of France. 
A) Druscilla will enjoy a net gain of $4800 if she vacations in the south of France. 
B) Druscilla will experience a net gain of $300 if she vacations in the south of France. 
C) Druscilla will lose $300 if she vacations in the south of France. 
D) Druscilla will be worse off if she vacations in the south of France.

Question 15

Trent decides to spend an hour playing basketball rather than studying.What is his opportunity cost?

Accepted Answer

A) The increase in skill he obtains from playing basketball for that hour. 
B) Nothing, because he had a free pass into the sports complex to play basketball. 
C) The benefit to his grades from studying for an hour. 
D) Nothing, because he enjoys playing basketball more than studying. 
A) The increase in skill he obtains from playing basketball for that hour. 
B) Nothing, because he had a free pass into the sports complex to play basketball. 
C) The benefit to his grades from studying for an hour. 
D) Nothing, because he enjoys playing basketball more than studying.

Question 16

What is the marginal (dollar)cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Accepted Answer

A) It is equal for all plates of food consumed during the meal. 
B) It is equal to the price paid for the meal (since there is no such thing as a free lunch). 
C) It is equal to the price paid for the meal divided by the number of plates of food consumed. 
D) It is equal to zero. 
A) It is equal for all plates of food consumed during the meal. 
B) It is equal to the price paid for the meal (since there is no such thing as a free lunch). 
C) It is equal to the price paid for the meal divided by the number of plates of food consumed. 
D) It is equal to zero.

Question 17

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

Accepted Answer

In general it would not make s

Question 18

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre.In order for the hypothesis to become a theory,it would have to be tested.Which of the following observations would seem to support this hypothesis?

Accepted Answer

A) Individuals buy less gas because they are purchasing more fuel-efficient vehicles. 
B) Gasoline consumption varies with the quantity of cars purchased in each region. 
C) Individuals in each region respond to an increase in price by purchasing less gasoline. 
D) People in each region buy the same amount of gasoline regardless of the price. 
A) Individuals buy less gas because they are purchasing more fuel-efficient vehicles. 
B) Gasoline consumption varies with the quantity of cars purchased in each region. 
C) Individuals in each region respond to an increase in price by purchasing less gasoline. 
D) People in each region buy the same amount of gasoline regardless of the price.

Question 19

If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class,does that mean that sitting in the back of a classroom causes one to perform poorly on exams?

Accepted Answer

A) The reoccurrence of such a relationship is sufficient evidence that sitting in the back of a classroom will lead to lower grades. 
B) It is not possible for an economist to determine causation between variables. 
C) The reoccurrence of a certain relationship between two variables does not necessarily imply causation. 
D) The reoccurrence of such a relationship is sufficient evidence that students who receive low grades prefer to keep a low profile and always sit in the back of the classroom. 
A) The reoccurrence of such a relationship is sufficient evidence that sitting in the back of a classroom will lead to lower grades. 
B) It is not possible for an economist to determine causation between variables. 
C) The reoccurrence of a certain relationship between two variables does not necessarily imply causation. 
D) The reoccurrence of such a relationship is sufficient evidence that students who receive low grades prefer to keep a low profile and always sit in the back of the classroom.

Question 20

Which of the following statements is most consistent with the rule of rational choice?

Accepted Answer

A) Manufacturers of automobiles should seek to make cars safer, no matter the costs involved. 
B) Police forces should be enlarged until virtually all crime is eliminated. 
C) Environment Canada should strive to eliminate virtually all air and water pollution. 
D) When evaluating new prescription drugs, Health Canada should weigh each drug's potential health benefits against the potential health risks posed by known side effects. 
A) Manufacturers of automobiles should seek to make cars safer, no matter the costs involved. 
B) Police forces should be enlarged until virtually all crime is eliminated. 
C) Environment Canada should strive to eliminate virtually all air and water pollution. 
D) When evaluating new prescription drugs, Health Canada should weigh each drug's potential health benefits against the potential health risks posed by known side effects.

Which topic does macroeconomics NOT generally include?

How should we judge the validity of a positive statement?

To be a positive economic statement,an assertion must be factual.

Which of the following statements about negative incentives is the most accurate?

When two variables repeatedly change at the same time,there must be a causal relationship between them.

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

What is the opportunity cost of an action equal to?

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

What is the opportunity cost of an action equal to?

Which of the following statements best describes opportunity costs?

What does economics primarily study?

Which of the following is NOT a factor of production?

The marginal cost of a vacation in the south of France is $4500.If the marginal benefit to Druscilla of a vacation in the south of France is $4800,what will she do?

Trent decides to spend an hour playing basketball rather than studying.What is his opportunity cost?

What is the marginal (dollar)cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre.In order for the hypothesis to become a theory,it would have to be tested.Which of the following observations would seem to support this hypothesis?

If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class,does that mean that sitting in the back of a classroom causes one to perform poorly on exams?

Which of the following statements is most consistent with the rule of rational choice?

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

Which topic does macroeconomics NOT generally include?

How should we judge the validity of a positive statement?

To be a positive economic statement,an assertion must be factual.

Which of the following statements about negative incentives is the most accurate?

When two variables repeatedly change at the same time,there must be a causal relationship between them.

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

What is the opportunity cost of an action equal to?

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

What is the opportunity cost of an action equal to?

Which of the following statements best describes opportunity costs?

What does economics primarily study?

Which of the following is NOT a factor of production?

The marginal cost of a vacation in the south of France is $4500.If the marginal benefit to Druscilla of a vacation in the south of France is $4800,what will she do?

Trent decides to spend an hour playing basketball rather than studying.What is his opportunity cost?

What is the marginal (dollar)cost of an additional plate of food to a patron at an "All-You-Can-Eat" restaurant?

Would it make good sense for a community to seek to reduce its levels of pollution to zero? Why or why not?

An economist might hypothesize that people will buy less gasoline at a price of $1.20 per litre than at $1.00 per litre.In order for the hypothesis to become a theory,it would have to be tested.Which of the following observations would seem to support this hypothesis?

If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class,does that mean that sitting in the back of a classroom causes one to perform poorly on exams?

Which of the following statements is most consistent with the rule of rational choice?

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