Question 1

What happens if a sawmill creates too much air pollution?

Accepted Answer

A) Interference by the government will surely make the matter worse. 
B) A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C) The government can raise economic well-being by providing health care to those affected by the pollution. 
D) The government can raise economic well-being through environmental regulation. 
A) Interference by the government will surely make the matter worse. 
B) A sense of social responsibility will cause the owners of the mill to reduce pollution. 
C) The government can raise economic well-being by providing health care to those affected by the pollution. 
D) The government can raise economic well-being through environmental regulation.

Question 2

What is the amount of goods and services produced from each hour of a worker's time?

Accepted Answer

A) total output 
B) productivity 
C) marginal product 
D) efficiency 
A) total output 
B) productivity 
C) marginal product 
D) efficiency

Question 3

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

Accepted Answer

A) by the invisible hand 
B) by market power 
C) by government intervention 
D) by property rights 
A) by the invisible hand 
B) by market power 
C) by government intervention 
D) by property rights

Question 4

In Canada, incomes have historically grown about 2% per year. At this rate, how long will it take for incomes to double?

Accepted Answer

A) 10 years. 
B) 25 years. 
C) 35 years. 
D) 50 years. 
A) 10 years. 
B) 25 years. 
C) 35 years. 
D) 50 years.

Question 5

Lisa buys a 1982 BMW, which she plans to restore and sell. She anticipates that the cost of the car and the repairs will be $14,000 and that she can sell it for $15,000. When she has spent $10,000, she discovers she needs to replace the engine, which will cost $4,000. She can sell the car without the new engine for $11,000. What should Lisa do?

Accepted Answer

A) complete the repairs and sell the car for $15,000 
B) cut her losses and sell the car now for $11,000 
C) never try such an expensive project again 
D) be totally indifferent between finishing the project and selling the car now 
A) complete the repairs and sell the car for $15,000 
B) cut her losses and sell the car now for $11,000 
C) never try such an expensive project again 
D) be totally indifferent between finishing the project and selling the car now

Question 6

Which is the most correct statement about the relationship between inflation and unemployment?

Accepted Answer

A) In the short run, reducing inflation is associated with falling unemployment. 
B) In the short run, reducing inflation is associated with rising unemployment. 
C) In the long run, reducing inflation is associated with falling unemployment. 
D) In the long run, reducing inflation is associated with rising unemployment. 
A) In the short run, reducing inflation is associated with falling unemployment. 
B) In the short run, reducing inflation is associated with rising unemployment. 
C) In the long run, reducing inflation is associated with falling unemployment. 
D) In the long run, reducing inflation is associated with rising unemployment.

Question 7

When people act in their own self-interest, what typically happens in a market system according to Adam Smith?

Accepted Answer

A) They help only themselves. 
B) They harm others. 
C) They help others, but not as much as they would have if they were not self-interested. 
D) They help others even more than when they seek to help others. 
A) They help only themselves. 
B) They harm others. 
C) They help others, but not as much as they would have if they were not self-interested. 
D) They help others even more than when they seek to help others.

Question 8

When the government attempts to improve equity in an economy, what is often the result?

Accepted Answer

A) an increase in overall output in the economy 
B) additional government revenue since overall income will increase 
C) an actual reduction in equity 
D) reduced efficiency in the economy 
A) an increase in overall output in the economy 
B) additional government revenue since overall income will increase 
C) an actual reduction in equity 
D) reduced efficiency in the economy

Question 9

A friend of yours asks you why market prices are better than government-determined prices. What do you say?

Accepted Answer

A) because they generally reflect the value of a good to society, but not the cost of making it 
B) because they generally reflect the cost of making a good to society, but not its value 
C) because they generally reflect both the value of a good to society and the cost of making it 
D) because they generally reflect neither the value of a good to society nor the cost of making it 
A) because they generally reflect the value of a good to society, but not the cost of making it 
B) because they generally reflect the cost of making a good to society, but not its value 
C) because they generally reflect both the value of a good to society and the cost of making it 
D) because they generally reflect neither the value of a good to society nor the cost of making it

Question 10

What is the opportunity cost of going to college?

Accepted Answer

A) the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B) the value of the best opportunity a student gives up to attend college 
C) zero for students who are fortunate enough to have all of their college expenses paid by someone else 
D) zero, since a college education will allow a student to earn a larger income after graduation 
A) the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses 
B) the value of the best opportunity a student gives up to attend college 
C) zero for students who are fortunate enough to have all of their college expenses paid by someone else 
D) zero, since a college education will allow a student to earn a larger income after graduation

Question 11

A typical worker in Italy can produce 24 units of product in an 8 hour day, where a typical worker in Poland produces 25 units of product in a 10 hour day. What can we conclude?

Accepted Answer

A) Worker productivity in Poland is higher than in Italy. 
B) The standard of living will be higher in Italy than in Poland. 
C) Productivity for the Polish worker is 3 units per hour and 2 1/2 units per hour for the Italian worker. 
D) There will be no difference between the standard of living in Italy and Poland. 
A) Worker productivity in Poland is higher than in Italy. 
B) The standard of living will be higher in Italy than in Poland. 
C) Productivity for the Polish worker is 3 units per hour and 2 1/2 units per hour for the Italian worker. 
D) There will be no difference between the standard of living in Italy and Poland.

Question 12

What is the largest single cost of going to university?

Accepted Answer

A) books 
B) room and board 
C) tuition 
D) lost wages 
A) books 
B) room and board 
C) tuition 
D) lost wages

Question 13

Who coined the term "invisible hand"?

Accepted Answer

A) Adam Smith. 
B) David Ricardo. 
C) John Maynard Keynes. 
D) Milton Friedman. 
A) Adam Smith. 
B) David Ricardo. 
C) John Maynard Keynes. 
D) Milton Friedman.

Question 14

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

Accepted Answer

To lower inflation, the government may c

Question 15

What is an example of a monopoly?

Accepted Answer

A) a jewellery store in Burnaby, British Columbia 
B) a souvenir shop in Cancun, Mexico 
C) an electric company in Outlook, Saskatchewan 
D) a doctor in St. John's, New Brunswick 
A) a jewellery store in Burnaby, British Columbia 
B) a souvenir shop in Cancun, Mexico 
C) an electric company in Outlook, Saskatchewan 
D) a doctor in St. John's, New Brunswick

Question 16

Which of the following is NOT a reason for the government to intervene in the market?

Accepted Answer

A) to promote efficiency 
B) to enforce property rights 
C) to promote equity 
D) to protect an industry 
A) to promote efficiency 
B) to enforce property rights 
C) to promote equity 
D) to protect an industry

Question 17

If France is better than Belarus at producing wine, but Belarus is better than France at producing crystal, what should happen?

Accepted Answer

A) Belarus should sell crystal to France, and should buy French wine. 
B) Belarus should impose a tariff on French wine in order to protect jobs in the Belarusian crystal industry. 
C) Belarus should subsidize its wine industry so that it can compete with French wine. 
D) Belarus should put a quota on the amount of French wine imported. 
A) Belarus should sell crystal to France, and should buy French wine. 
B) Belarus should impose a tariff on French wine in order to protect jobs in the Belarusian crystal industry. 
C) Belarus should subsidize its wine industry so that it can compete with French wine. 
D) Belarus should put a quota on the amount of French wine imported.

Question 18

In the short run, what does the Phillips curve illustrate?

Accepted Answer

A) the tradeoff between inflation and unemployment 
B) the tradeoff between equity and efficiency 
C) labour productivity in an economy 
D) the level of government intervention in a market economy 
A) the tradeoff between inflation and unemployment 
B) the tradeoff between equity and efficiency 
C) labour productivity in an economy 
D) the level of government intervention in a market economy

Question 19

Lisa buys a 1982 BMW, which she plans to restore and sell. She anticipates that the cost of the car and the repairs will be $14,000 and that she can sell it for $20,000. When she has spent $11,000, she discovers she needs to replace the engine, which will cost $5,000. She can sell the car without the new engine for $14,000. What should Lisa do?

Accepted Answer

A) complete the repairs and sell the car for $20,000 
B) cut her losses and sell the car now for $14,000 
C) never try such an expensive project again 
D) be totally indifferent between finishing the project and selling the car now 
A) complete the repairs and sell the car for $20,000 
B) cut her losses and sell the car now for $14,000 
C) never try such an expensive project again 
D) be totally indifferent between finishing the project and selling the car now

Question 20

Which of the following would NOT be a result of laws that require firms to reduce pollution?

Accepted Answer

A) lower spending by government 
B) higher prices to consumers 
C) lower wages to workers 
D) smaller profit to firms 
A) lower spending by government 
B) higher prices to consumers 
C) lower wages to workers 
D) smaller profit to firms

What happens if a sawmill creates too much air pollution?

What is the amount of goods and services produced from each hour of a worker's time?

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

In Canada, incomes have historically grown about 2% per year. At this rate, how long will it take for incomes to double?

Which is the most correct statement about the relationship between inflation and unemployment?

When people act in their own self-interest, what typically happens in a market system according to Adam Smith?

When the government attempts to improve equity in an economy, what is often the result?

A friend of yours asks you why market prices are better than government-determined prices. What do you say?

What is the opportunity cost of going to college?

A typical worker in Italy can produce 24 units of product in an 8 hour day, where a typical worker in Poland produces 25 units of product in a 10 hour day. What can we conclude?

What is the largest single cost of going to university?

Who coined the term "invisible hand"?

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

What is an example of a monopoly?

Which of the following is NOT a reason for the government to intervene in the market?

If France is better than Belarus at producing wine, but Belarus is better than France at producing crystal, what should happen?

In the short run, what does the Phillips curve illustrate?

Which of the following would NOT be a result of laws that require firms to reduce pollution?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 1: Ten Principles of Economics

What happens if a sawmill creates too much air pollution?

What is the amount of goods and services produced from each hour of a worker's time?

How is the self-interest of the participants in an economy guided into promoting general economic self-interest?

In Canada, incomes have historically grown about 2% per year. At this rate, how long will it take for incomes to double?

Which is the most correct statement about the relationship between inflation and unemployment?

When people act in their own self-interest, what typically happens in a market system according to Adam Smith?

When the government attempts to improve equity in an economy, what is often the result?

A friend of yours asks you why market prices are better than government-determined prices. What do you say?

What is the opportunity cost of going to college?

A typical worker in Italy can produce 24 units of product in an 8 hour day, where a typical worker in Poland produces 25 units of product in a 10 hour day. What can we conclude?

What is the largest single cost of going to university?

Who coined the term "invisible hand"?

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run.

What is an example of a monopoly?

Which of the following is NOT a reason for the government to intervene in the market?

If France is better than Belarus at producing wine, but Belarus is better than France at producing crystal, what should happen?

In the short run, what does the Phillips curve illustrate?

Which of the following would NOT be a result of laws that require firms to reduce pollution?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters