Question 1

What is an externality?

Accepted Answer

A) the impact of one person's actions on the well-being of a bystander 
B) the impact of a person's actions on that person's well-being 
C) the impact of society's decisions on the well-being of society 
D) the impact of society's decisions on the well-being of one person in the society 
A) the impact of one person's actions on the well-being of a bystander 
B) the impact of a person's actions on that person's well-being 
C) the impact of society's decisions on the well-being of society 
D) the impact of society's decisions on the well-being of one person in the society

Question 2

What is one component necessary for markets to work?

Accepted Answer

A) government intervention 
B) a benevolent society 
C) property rights 
D) abundant resources 
A) government intervention 
B) a benevolent society 
C) property rights 
D) abundant resources

Question 3

What is the definition of inflation?

Accepted Answer

A) a period of rising productivity in the economy 
B) a period of rising income in the economy 
C) an increase in the overall level of output in the economy 
D) an increase in the overall level of prices in the economy 
A) a period of rising productivity in the economy 
B) a period of rising income in the economy 
C) an increase in the overall level of output in the economy 
D) an increase in the overall level of prices in the economy

Question 4

The income of a typical worker in a country is most closely linked to which of the following?

Accepted Answer

A) population 
B) productivity 
C) the number of labour unions 
D) government policies 
A) population 
B) productivity 
C) the number of labour unions 
D) government policies

Question 5

What is NOT a benefit from trade?

Accepted Answer

A) the ability to specialize 
B) a greater variety of goods and services becoming available 
C) less competition 
D) lower prices 
A) the ability to specialize 
B) a greater variety of goods and services becoming available 
C) less competition 
D) lower prices

Question 6

Which was one of the worst episodes of inflation?

Accepted Answer

A) in the United States in the 1960s. 
B) in Argentina in the 1950s. 
C) in Russia in the 1930s. 
D) in Germany in the 1920s. 
A) in the United States in the 1960s. 
B) in Argentina in the 1950s. 
C) in Russia in the 1930s. 
D) in Germany in the 1920s.

Question 7

Inflation increases the value of money.

Accepted Answer

A) True 
 B)False

Question 8

For most students, what is the largest single cost of a university education?

Accepted Answer

A) the wages given up to attend school 
B) tuition, fees, and books 
C) room and board 
D) transportation, parking, and entertainment 
A) the wages given up to attend school 
B) tuition, fees, and books 
C) room and board 
D) transportation, parking, and entertainment

Question 9

In which of the following situations would economists use the word equity?

Accepted Answer

A) Each member of society has the same income. 
B) Society is getting the most it can from its scarce resources. 
C) Those in society who have the least will receive the most. 
D) The benefits of society's resources are distributed fairly among society's members. 
A) Each member of society has the same income. 
B) Society is getting the most it can from its scarce resources. 
C) Those in society who have the least will receive the most. 
D) The benefits of society's resources are distributed fairly among society's members.

Question 10

What does the word "margin" mean?

Accepted Answer

A) edge 
B) distance 
C) space 
D) measure 
A) edge 
B) distance 
C) space 
D) measure

Question 11

What is an example of market power?

Accepted Answer

A) a fast food restaurant in a university town 
B) a wheat farmer in Saskatchewan 
C) the last gas station in Manitoba for 100 miles 
D) a shoe store in Ontario 
A) a fast food restaurant in a university town 
B) a wheat farmer in Saskatchewan 
C) the last gas station in Manitoba for 100 miles 
D) a shoe store in Ontario

Question 12

If Canada decides to trade with Mexico, what do we know?

Accepted Answer

A) Mexico will be better off, but trade with a less developed country could not help Canada. 
B) It will not benefit Mexico because workers in Canada are more productive. 
C) It will benefit Mexico because workers in Canada are more productive. 
D) Mexico and Canada can both be better off. 
A) Mexico will be better off, but trade with a less developed country could not help Canada. 
B) It will not benefit Mexico because workers in Canada are more productive. 
C) It will benefit Mexico because workers in Canada are more productive. 
D) Mexico and Canada can both be better off.

Question 13

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 14

What can cause market failure?

Accepted Answer

A) low consumer demand 
B) government intervention and price controls 
C) externalities and market power 
D) high prices and foreign competition 
A) low consumer demand 
B) government intervention and price controls 
C) externalities and market power 
D) high prices and foreign competition

Question 15

What does making decisions "at the margin" mean?

Accepted Answer

A) that people make those decisions that do not impose a marginal cost 
B) that people evaluate how easily a decision can be reversed if problems arise 
C) that people compare the marginal costs and marginal benefits of each decision 
D) that people always calculate the marginal dollar costs for each decision 
A) that people make those decisions that do not impose a marginal cost 
B) that people evaluate how easily a decision can be reversed if problems arise 
C) that people compare the marginal costs and marginal benefits of each decision 
D) that people always calculate the marginal dollar costs for each decision

Question 16

Which would NOT be true in a market economy?

Accepted Answer

A) Firms decide whom to hire and what to produce. 
B) Government policies do not affect the decisions of firms and households. 
C) Households decide which firms to work for and what to buy with their incomes. 
D) Profit and self-interest guide the decisions of firms and households. 
A) Firms decide whom to hire and what to produce. 
B) Government policies do not affect the decisions of firms and households. 
C) Households decide which firms to work for and what to buy with their incomes. 
D) Profit and self-interest guide the decisions of firms and households.

Question 17

What happened to prices in Germany during the early 1920s?

Accepted Answer

A) They doubled annually. 
B) They doubled monthly. 
C) They tripled monthly. 
D) They tripled annually. 
A) They doubled annually. 
B) They doubled monthly. 
C) They tripled monthly. 
D) They tripled annually.

Question 18

Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $10,000 and that he can sell it for $13,000. When he has spent $10,000, he discovers he needs to replace the engine, which will cost $4,000. He can sell the car without the new engine for $9,000. What should Stan do?

Accepted Answer

A) complete the repairs and sell the car for $13,000 
B) cut his losses and sell the car now for $9,000 
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 $13,000 
B) cut his losses and sell the car now for $9,000 
C) never try such an expensive project again 
D) be totally indifferent between finishing the project and selling the car now

Question 19

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Since this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

Accepted Answer

A) 	lower the price of the remaining donuts even if the price falls below $1.00 
B) 	lower the price of the remaining donuts as long as it's more than $1.00 
C) 	lower the price on all donuts so they will all be sold earlier in the day 
D) 	throw them away and produce 10 fewer dozen tomorrow 
A) 	lower the price of the remaining donuts even if the price falls below $1.00 
B) 	lower the price of the remaining donuts as long as it's more than $1.00 
C) 	lower the price on all donuts so they will all be sold earlier in the day 
D) 	throw them away and produce 10 fewer dozen tomorrow

Question 20

What does inflation cause?

Accepted Answer

A) incomes to fall 
B) productivity to increase 
C) the government to lower taxes 
D) the value of money to fall 
A) incomes to fall 
B) productivity to increase 
C) the government to lower taxes 
D) the value of money to fall

What is an externality?

What is one component necessary for markets to work?

What is the definition of inflation?

The income of a typical worker in a country is most closely linked to which of the following?

What is NOT a benefit from trade?

Which was one of the worst episodes of inflation?

Inflation increases the value of money.

For most students, what is the largest single cost of a university education?

In which of the following situations would economists use the word equity?

What does the word "margin" mean?

What is an example of market power?

If Canada decides to trade with Mexico, what do we know?

The cost of an action is measured in terms of foregone opportunities.

What can cause market failure?

What does making decisions "at the margin" mean?

Which would NOT be true in a market economy?

What happened to prices in Germany during the early 1920s?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Since this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

What does inflation cause?

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

Exam 1: Ten Principles of Economics

What is an externality?

What is one component necessary for markets to work?

What is the definition of inflation?

The income of a typical worker in a country is most closely linked to which of the following?

What is NOT a benefit from trade?

Which was one of the worst episodes of inflation?

Inflation increases the value of money.

For most students, what is the largest single cost of a university education?

In which of the following situations would economists use the word equity?

What does the word "margin" mean?

What is an example of market power?

If Canada decides to trade with Mexico, what do we know?

The cost of an action is measured in terms of foregone opportunities.

What can cause market failure?

What does making decisions "at the margin" mean?

Which would NOT be true in a market economy?

What happened to prices in Germany during the early 1920s?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $1.00. Since this shop does not sell day-old donuts the next day, what should the manager do if he still has 10 dozen left at 2:30 p.m.?

What does inflation cause?

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