Question 1

If a copper refinery does NOT bear the entire cost of the smoke it emits, what will happen?

Accepted Answer

A) It will not emit any smoke so as to avoid the entire cost of the smoke. 
B) It will emit lower levels of smoke. 
C) It will emit an acceptable level of smoke. 
D) It will emit too much smoke. 
A) It will not emit any smoke so as to avoid the entire cost of the smoke. 
B) It will emit lower levels of smoke. 
C) It will emit an acceptable level of smoke. 
D) It will emit too much smoke.

Question 2

If education produces external benefits for society, which of the following might NOT be an appropriate policy for society to establish regarding education?

Accepted Answer

A) tax incentives for schooling 
B) mandatory minimum levels of education 
C) programs that promote the hiring of high school dropouts 
D) public subsidies of education 
A) tax incentives for schooling 
B) mandatory minimum levels of education 
C) programs that promote the hiring of high school dropouts 
D) public subsidies of education

Question 3

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

Accepted Answer

A) There is no such thing as a free lunch. 
B) People buy more when prices are low than when prices are high. 
C) No matter how much people earn, they tend to spend more than they earn. 
D) Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes. 
A) There is no such thing as a free lunch. 
B) People buy more when prices are low than when prices are high. 
C) No matter how much people earn, they tend to spend more than they earn. 
D) Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.

Question 5

How can Canada benefit from trade?

Accepted Answer

A) only with nations that can produce goods Canada cannot produce 
B) with any nation 
C) with any nation not in economic competition with Canada 
D) only with less developed nations 
A) only with nations that can produce goods Canada cannot produce 
B) with any nation 
C) with any nation not in economic competition with Canada 
D) only with less developed nations

Question 6

The average cost per seat on an airplane trip from Calgary to Edmonton is $105. Suppose no refreshments are served and 7 seats are empty. How could the airline company increase its profit?

Accepted Answer

A) if it charged no less than $105 for the 7 remaining seats 
B) if it charged more than $105 for the 7 remaining seats 
C) if it charged any ticket price above $0 for the remaining seats 
D) if it left the seats empty 
A) if it charged no less than $105 for the 7 remaining seats 
B) if it charged more than $105 for the 7 remaining seats 
C) if it charged any ticket price above $0 for the remaining seats 
D) if it left the seats empty

Question 7

In a market economy, decisions are guided by individual self-interest. What impact does this have?

Accepted Answer

A) There is still the ability to achieve desirable economic well-being for society as a whole. 
B) There is a strong need for government intervention in the market. 
C) There is less efficiency in market economies than in command economies. 
D) There is more need for a strong legal system to control individual greed. 
A) There is still the ability to achieve desirable economic well-being for society as a whole. 
B) There is a strong need for government intervention in the market. 
C) There is less efficiency in market economies than in command economies. 
D) There is more need for a strong legal system to control individual greed.

Question 8

Productivity is defined as the quantity of goods and services produced from each hour of a worker's time.

Accepted Answer

A) True 
 B)False

Question 9

In what economy are the decisions of firms and households guided by profit and self-interest?

Accepted Answer

A) a command economy 
B) a traditional economy 
C) a market economy 
D) in every economy 
A) a command economy 
B) a traditional economy 
C) a market economy 
D) in every economy

Question 10

If the government wanted to enact a policy to increase living standards, what might it do?

Accepted Answer

A) allow corporate tax write-offs for money spent on worker safety 
B) make it more difficult to receive unemployment benefits 
C) increase educational opportunities for workers 
D) prohibit unions from organizing 
A) allow corporate tax write-offs for money spent on worker safety 
B) make it more difficult to receive unemployment benefits 
C) increase educational opportunities for workers 
D) prohibit unions from organizing

Question 11

Russell spends an hour studying instead of playing tennis. What is the opportunity cost to him of studying?

Accepted Answer

A) the improvement in his grades from studying for the hour 
B) the difference between the improvement in his grades from studying minus the enjoyment of playing tennis 
C) the enjoyment and exercise he would have received had he played tennis 
D) Zero, Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis 
A) the improvement in his grades from studying for the hour 
B) the difference between the improvement in his grades from studying minus the enjoyment of playing tennis 
C) the enjoyment and exercise he would have received had he played tennis 
D) Zero, Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis

Question 12

Which of the following would NOT be true in a world without scarcity?

Accepted Answer

A) There would be no need for the science of economics. 
B) Everyone would have all the goods and services they wanted. 
C) There would have to be an infinite supply of every resource. 
D) There would be opportunity costs. 
A) There would be no need for the science of economics. 
B) Everyone would have all the goods and services they wanted. 
C) There would have to be an infinite supply of every resource. 
D) There would be opportunity costs.

Question 13

In economics, what is the cost of something?

Accepted Answer

A) the dollar amount of obtaining it 
B) always measured in units of time given up to get it 
C) what you give up to get it 
D) usually higher than people think it will be 
A) the dollar amount of obtaining it 
B) always measured in units of time given up to get it 
C) what you give up to get it 
D) usually higher than people think it will be

Question 14

In the nation of Dictatorland, farmers traditionally feed grain to their livestock. Central planners, however, decided to increase the price of grain to make grain farmers happy and to reduce the price of bread made from that grain to make city dwellers happy. Now the price of bread is lower than the price of grain. What might we now expect?

Accepted Answer

A) farmers to continue to feed grain to their livestock 
B) farmers to start feeding bread to their livestock 
C) city dwellers to start buying grain to make bread to eat 
D) city dwellers to start buying grain to make bread to sell 
A) farmers to continue to feed grain to their livestock 
B) farmers to start feeding bread to their livestock 
C) city dwellers to start buying grain to make bread to eat 
D) city dwellers to start buying grain to make bread to sell

Question 15

Which of the following is the best example of a marginal change?

Accepted Answer

A) After graduating from university, Audrey's income increases from $500 per month to $3,000 per month. 
B) Morgan gets a raise at her part-time job and is now paid $7.25 per hour instead of $7.00. 
C) Housing prices in an area increase by 40% when a new highway is built in a small town. 
D) A hard freeze wipes out half of the tobacco crop in Ontario and the price of cigarettes doubles. 
A) After graduating from university, Audrey's income increases from $500 per month to $3,000 per month. 
B) Morgan gets a raise at her part-time job and is now paid $7.25 per hour instead of $7.00. 
C) Housing prices in an area increase by 40% when a new highway is built in a small town. 
D) A hard freeze wipes out half of the tobacco crop in Ontario and the price of cigarettes doubles.

Question 16

What would happen to the study of economics if scarcity disappeared?

Accepted Answer

Since economics is the study of how soci

Question 17

What is the term used to describe a situation in which markets fail to allocate resources efficiently?

Accepted Answer

A) economic meltdown 
B) market failure 
C) corporate bankruptcy 
D) disequilibrium 
A) economic meltdown 
B) market failure 
C) corporate bankruptcy 
D) disequilibrium

Question 18

What is the term for what you give up to obtain an item?

Accepted Answer

A) opportunity cost 
B) explicit cost 
C) true cost 
D) direct cost 
A) opportunity cost 
B) explicit cost 
C) true cost 
D) direct cost

Question 19

Which is the most correct statement about the invisible hand?

Accepted Answer

A) The invisible hand always ensures both equity and efficiency. 
B) The invisible hand cannot ensure either equity or efficiency. 
C) The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D) The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. 
A) The invisible hand always ensures both equity and efficiency. 
B) The invisible hand cannot ensure either equity or efficiency. 
C) The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D) The invisible hand is more effective at ensuring equity than it is at ensuring efficiency.

Question 20

When policymakers make policies that change the costs and benefits that people face, what can the policymakers do?

Accepted Answer

A) alter behaviours 
B) make people ignore incentives 
C) create inflation 
D) reduce government revenue 
A) alter behaviours 
B) make people ignore incentives 
C) create inflation 
D) reduce government revenue

If a copper refinery does NOT bear the entire cost of the smoke it emits, what will happen?

If education produces external benefits for society, which of the following might NOT be an appropriate policy for society to establish regarding education?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

How can Canada benefit from trade?

The average cost per seat on an airplane trip from Calgary to Edmonton is $105. Suppose no refreshments are served and 7 seats are empty. How could the airline company increase its profit?

In a market economy, decisions are guided by individual self-interest. What impact does this have?

Productivity is defined as the quantity of goods and services produced from each hour of a worker's time.

In what economy are the decisions of firms and households guided by profit and self-interest?

If the government wanted to enact a policy to increase living standards, what might it do?

Russell spends an hour studying instead of playing tennis. What is the opportunity cost to him of studying?

Which of the following would NOT be true in a world without scarcity?

In economics, what is the cost of something?

Which of the following is the best example of a marginal change?

What would happen to the study of economics if scarcity disappeared?

What is the term used to describe a situation in which markets fail to allocate resources efficiently?

What is the term for what you give up to obtain an item?

Which is the most correct statement about the invisible hand?

When policymakers make policies that change the costs and benefits that people face, what can the policymakers do?

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

If a copper refinery does NOT bear the entire cost of the smoke it emits, what will happen?

If education produces external benefits for society, which of the following might NOT be an appropriate policy for society to establish regarding education?

A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests.

Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

How can Canada benefit from trade?

The average cost per seat on an airplane trip from Calgary to Edmonton is $105. Suppose no refreshments are served and 7 seats are empty. How could the airline company increase its profit?

In a market economy, decisions are guided by individual self-interest. What impact does this have?

Productivity is defined as the quantity of goods and services produced from each hour of a worker's time.

In what economy are the decisions of firms and households guided by profit and self-interest?

If the government wanted to enact a policy to increase living standards, what might it do?

Russell spends an hour studying instead of playing tennis. What is the opportunity cost to him of studying?

Which of the following would NOT be true in a world without scarcity?

In economics, what is the cost of something?

Which of the following is the best example of a marginal change?

What would happen to the study of economics if scarcity disappeared?

What is the term used to describe a situation in which markets fail to allocate resources efficiently?

What is the term for what you give up to obtain an item?

Which is the most correct statement about the invisible hand?

When policymakers make policies that change the costs and benefits that people face, what can the policymakers do?

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