Question 1

What is one definition of equity?

Accepted Answer

A) equality 
B) efficiency 
C) fairness 
D) similarity 
A) equality 
B) efficiency 
C) fairness 
D) similarity

Question 2

To improve living standards, what should policymakers do?

Accepted Answer

A) impose restriction on foreign competition 
B) formulate policies designed to increase productivity 
C) impose tougher immigration policies 
D) provide tax breaks for the middle class 
A) impose restriction on foreign competition 
B) formulate policies designed to increase productivity 
C) impose tougher immigration policies 
D) provide tax breaks for the middle class

Question 3

What is a marginal change?

Accepted Answer

A) a long-term trend 
B) a large, significant adjustment 
C) a change for the worse, and so is usually short-term 
D) a small incremental adjustment 
A) a long-term trend 
B) a large, significant adjustment 
C) a change for the worse, and so is usually short-term 
D) a small incremental adjustment

Question 4

Which of the following is NOT included in the decisions that every society must make?

Accepted Answer

A) what goods will be produced 
B) who will produce the goods 
C) what determines consumer preferences 
D) who will consume the goods 
A) what goods will be produced 
B) who will produce the goods 
C) what determines consumer preferences 
D) who will consume the goods

Question 5

What is one necessary role of government in a market economy?

Accepted Answer

A) to tax goods and services that are most desired by consumers 
B) to maintain welfare programs for the poor 
C) to provide services such as pensions 
D) to enforce property rights 
A) to tax goods and services that are most desired by consumers 
B) to maintain welfare programs for the poor 
C) to provide services such as pensions 
D) to enforce property rights

Question 6

What happens when government policies are being designed?

Accepted Answer

A) There is usually a tradeoff between equity and efficiency. 
B) Equity and efficiency goals are usually independent of each other. 
C) Equity can usually be achieved without an efficiency loss. 
D) Increasing efficiency usually results in more equity. 
A) There is usually a tradeoff between equity and efficiency. 
B) Equity and efficiency goals are usually independent of each other. 
C) Equity can usually be achieved without an efficiency loss. 
D) Increasing efficiency usually results in more equity.

Question 7

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Accepted Answer

A) True 
 B)False

Question 8

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

Accepted Answer

Efficiency is the property of society ge

Question 9

Which is the most accurate statement about trade?

Accepted Answer

A) Trade can make every nation better off. 
B) Trade makes some nations better off and others worse off. 
C) Trading for a good can make a nation better off only if the nation cannot produce that good itself. 
D) Trade helps rich nations and hurts poor nations. 
A) Trade can make every nation better off. 
B) Trade makes some nations better off and others worse off. 
C) Trading for a good can make a nation better off only if the nation cannot produce that good itself. 
D) Trade helps rich nations and hurts poor nations.

Question 10

Which of these activities will most likely result in an external benefit?

Accepted Answer

A) A university student buys a deck of cards to play solitaire in her dorm room. 
B) An elderly woman plants a flower garden on the vacant lot next to her house. 
C) An executive purchases a book to read on a business trip. 
D) A ten-year-old buys new Nikes with his allowance money he has saved. 
A) A university student buys a deck of cards to play solitaire in her dorm room. 
B) An elderly woman plants a flower garden on the vacant lot next to her house. 
C) An executive purchases a book to read on a business trip. 
D) A ten-year-old buys new Nikes with his allowance money he has saved.

Question 11

When is a good considered scarce in a society?

Accepted Answer

A) when more output of the good is possible 
B) when everyone in that society cannot have all they want of the good 
C) when the government restricts production of the good 
D) when only the richest people in the economy can buy all they want of the good 
A) when more output of the good is possible 
B) when everyone in that society cannot have all they want of the good 
C) when the government restricts production of the good 
D) when only the richest people in the economy can buy all they want of the good

Question 12

What can hinder the invisible hand's ability to coordinate the decisions of the firms and households in the economy?

Accepted Answer

A) government actions that distort prices 
B) increased competition in the market 
C) extended periods of unemployment 
D) a dramatic reduction in consumer spending 
A) government actions that distort prices 
B) increased competition in the market 
C) extended periods of unemployment 
D) a dramatic reduction in consumer spending

Question 13

How does the "invisible hand" direct economic activity?

Accepted Answer

A) through advertising 
B) through prices 
C) through central planning 
D) through government regulations 
A) through advertising 
B) through prices 
C) through central planning 
D) through government regulations

Question 14

The average cost per seat on a bus trip from Montreal to Toronto is $140. Suppose no refreshments are served and 3 seats are empty. How could the bus company increase its profit?

Accepted Answer

A) if it charged no less than $140 for the 3 remaining seats 
B) if it charged more than $140 for the 3 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 $140 for the 3 remaining seats 
B) if it charged more than $140 for the 3 remaining seats 
C) if it charged any ticket price above $0 for the remaining seats 
D) if it left the seats empty

Question 15

To raise productivity, what could policymakers do?

Accepted Answer

A) increase spending on education 
B) lower tax credits to firms for capital improvements 
C) reduce the number of imports allowed into the economy 
D) eliminate minimum wage laws 
A) increase spending on education 
B) lower tax credits to firms for capital improvements 
C) reduce the number of imports allowed into the economy 
D) eliminate minimum wage laws

Question 16

From which Greek words is the word economy derived?

Accepted Answer

A) "environment" 
B) "one who manages a household" 
C) "one who participates in a market" 
D) "conservation" 
A) "environment" 
B) "one who manages a household" 
C) "one who participates in a market" 
D) "conservation"

Question 17

According to economists, what do people respond to?

Accepted Answer

A) laws 
B) incentives 
C) threats more than rewards 
D) positives, but not negatives 
A) laws 
B) incentives 
C) threats more than rewards 
D) positives, but not negatives

Question 18

Monica has spent $30,000 purchasing and repairing an old cabin, which she expects to sell for $40,000 once the repairs are complete. She discovers that she needs an additional repair, which will cost $20,000, in order to complete the repairs. She can sell the cabin as it is now for $25,000. What should she do?

Accepted Answer

A) She should cut her losses and take the $25,000. 
B) She should never sell something for less than it cost. 
C) She should complete the repairs and sell the cabin. 
D) It doesn't matter which action she takes; the outcome is the same either way. 
A) She should cut her losses and take the $25,000. 
B) She should never sell something for less than it cost. 
C) She should complete the repairs and sell the cabin. 
D) It doesn't matter which action she takes; the outcome is the same either way.

Question 19

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 $8,000 and that he can sell it for $10,000. When he has spent $7,000, 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 $10,000 
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 $10,000 
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 20

Although the Phillips curve is controversial, what do most economists believe?

Accepted Answer

A) that society faces a tradeoff between unemployment and inflation in the short run only 
B) that society faces a tradeoff between unemployment and inflation in the long run only 
C) that no tradeoff exists between unemployment and inflation 
D) that society faces a continuous tradeoff between unemployment and inflation 
A) that society faces a tradeoff between unemployment and inflation in the short run only 
B) that society faces a tradeoff between unemployment and inflation in the long run only 
C) that no tradeoff exists between unemployment and inflation 
D) that society faces a continuous tradeoff between unemployment and inflation

What is one definition of equity?

To improve living standards, what should policymakers do?

What is a marginal change?

Which of the following is NOT included in the decisions that every society must make?

What is one necessary role of government in a market economy?

What happens when government policies are being designed?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

Which is the most accurate statement about trade?

Which of these activities will most likely result in an external benefit?

When is a good considered scarce in a society?

What can hinder the invisible hand's ability to coordinate the decisions of the firms and households in the economy?

How does the "invisible hand" direct economic activity?

The average cost per seat on a bus trip from Montreal to Toronto is $140. Suppose no refreshments are served and 3 seats are empty. How could the bus company increase its profit?

To raise productivity, what could policymakers do?

From which Greek words is the word economy derived?

According to economists, what do people respond to?

Although the Phillips curve is controversial, what do most economists believe?

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 is one definition of equity?

To improve living standards, what should policymakers do?

What is a marginal change?

Which of the following is NOT included in the decisions that every society must make?

What is one necessary role of government in a market economy?

What happens when government policies are being designed?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

Which is the most accurate statement about trade?

Which of these activities will most likely result in an external benefit?

When is a good considered scarce in a society?

What can hinder the invisible hand's ability to coordinate the decisions of the firms and households in the economy?

How does the "invisible hand" direct economic activity?

The average cost per seat on a bus trip from Montreal to Toronto is $140. Suppose no refreshments are served and 3 seats are empty. How could the bus company increase its profit?

To raise productivity, what could policymakers do?

From which Greek words is the word economy derived?

According to economists, what do people respond to?

Although the Phillips curve is controversial, what do most economists believe?

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