Question 1

Figure 2-9  
-Refer to Figure 2-9. What is the correct designation of point A?

Accepted Answer

A) (6, 0) 
B) (0, 24) 
C) (6, 24) 
D) (24, 6) 
A) (6, 0) 
B) (0, 24) 
C) (6, 24) 
D) (24, 6)

Question 2

Economists outside the government also offer policy advice. Which institution below does NOT publish reports by economists?

Accepted Answer

A) C.D. Howe Institute 
B) Fraser Institute 
C) Institute for Research on Public Policy 
D) H.M Holmes Institute 
A) C.D. Howe Institute 
B) Fraser Institute 
C) Institute for Research on Public Policy 
D) H.M Holmes Institute

Question 3

What observation did Albert Einstein once make about science?

Accepted Answer

A) "The whole of science is nothing more than the refinement of everyday thinking." 
B) "The whole of science is nothing more than an interesting intellectual exercise." 
C) "In order to understand science, one must rely solely on abstraction." 
D) "In order to understand science, one must transcend everyday thinking." 
A) "The whole of science is nothing more than the refinement of everyday thinking." 
B) "The whole of science is nothing more than an interesting intellectual exercise." 
C) "In order to understand science, one must rely solely on abstraction." 
D) "In order to understand science, one must transcend everyday thinking."

Question 4

How did the great economist John Maynard Keynes explain his comment that although economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Accepted Answer

A) Most people who study economics are not very bright. 
B) Good economists must possess a rare combination of gifts. 
C) Economics is actually quite boring; hence, people tend to lose interest in it. 
D) Good thinkers become frustrated with economics because it is not logical or relevant. 
A) Most people who study economics are not very bright. 
B) Good economists must possess a rare combination of gifts. 
C) Economics is actually quite boring; hence, people tend to lose interest in it. 
D) Good thinkers become frustrated with economics because it is not logical or relevant.

Question 5

Figure 2-10  
-Refer to Figure 2-10. What is the movement from point A to point B?

Accepted Answer

A) a shift of the curve 
B) a change in preferences 
C) a movement along the curve 
D) a change in consumer income. 
A) a shift of the curve 
B) a change in preferences 
C) a movement along the curve 
D) a change in consumer income.

Question 6

Two economists, Adam and Joan, are discussing the possibility of substantially reforming the current federal tax system. Adam thinks the current system is fine but Joan is in favour of reform. Which of the following is the LEAST likely explanation for the disagreement?

Accepted Answer

A) Adam is a positive economist and Joan is a normative economist. 
B) Adam and Joan have different positive views about the effect of changing the tax system. 
C) Adam and Joan have different values, and so have different normative views about policy. 
D) Adam is better off under the current system and Joan would be better off if the reforms were implemented. 
A) Adam is a positive economist and Joan is a normative economist. 
B) Adam and Joan have different positive views about the effect of changing the tax system. 
C) Adam and Joan have different values, and so have different normative views about policy. 
D) Adam is better off under the current system and Joan would be better off if the reforms were implemented.

Question 7

Figure 2-4  
-Refer to Figure 2-4. What is the opportunity cost of getting 15 additional toasters by moving from point D to point C?

Accepted Answer

A) 10 toothbrushes 
B) 20 toothbrushes 
C) 30 toothbrushes 
D) It is impossible for the economy to move from point D to point C. 
A) 10 toothbrushes 
B) 20 toothbrushes 
C) 30 toothbrushes 
D) It is impossible for the economy to move from point D to point C.

Question 8

When studying the effects of public policy changes, what have economists often observed?

Accepted Answer

A) There is a difference between the long run and short run. 
B) Unemployment and inflation are directly related in the short run. 
C) With stock prices, what goes up must come down. 
D) If the policy is well-designed, it will always be effective. 
A) There is a difference between the long run and short run. 
B) Unemployment and inflation are directly related in the short run. 
C) With stock prices, what goes up must come down. 
D) If the policy is well-designed, it will always be effective.

Question 9

What do the duties of the economists employed by Human Resources Canada include?

Accepted Answer

A) advising Parliament 
B) designing tax policy 
C) writing the annual Economic Report 
D) studying the relationship between average wages and gender 
A) advising Parliament 
B) designing tax policy 
C) writing the annual Economic Report 
D) studying the relationship between average wages and gender

Question 10

If Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree, what is this an example of?

Accepted Answer

A) controlled experiments used to develop scientific theories 
B) being in the right place at the right time 
C) an idea whose time had come 
D) the interplay between observation and theory in science 
A) controlled experiments used to develop scientific theories 
B) being in the right place at the right time 
C) an idea whose time had come 
D) the interplay between observation and theory in science

Question 11

What is the production possibilities frontier?

Accepted Answer

A) a map that shows the frontier beyond which agriculture is unprofitable 
B) a map that shows areas of the world in which capitalist production is now possible 
C) a graph that shows the various combinations of resources that can be used to produce a given level of output 
D) a graph that shows the various combinations of output the economy can possibly produce given the available resources and technology 
A) a map that shows the frontier beyond which agriculture is unprofitable 
B) a map that shows areas of the world in which capitalist production is now possible 
C) a graph that shows the various combinations of resources that can be used to produce a given level of output 
D) a graph that shows the various combinations of output the economy can possibly produce given the available resources and technology

Question 12

Figure 2-6  
-Refer to Figure 2-6. What was the most likely cause of the movement from point C to point D?

Accepted Answer

A) unemployment 
B) a decrease in society's preference for bananas 
C) a decrease in society's preference for playing baseball 
D) a shift to a longer working day 
A) unemployment 
B) a decrease in society's preference for bananas 
C) a decrease in society's preference for playing baseball 
D) a shift to a longer working day

Question 13

Which of the following would NOT be considered a factor of production?

Accepted Answer

A) labour 
B) land 
C) capital 
D) money 
A) labour 
B) land 
C) capital 
D) money

Question 14

An economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Accepted Answer

A) True 
 B)False

Question 15

Which is true in the circular-flow diagram?

Accepted Answer

A) firms are sellers in the resource market and the product market. 
B) firms are buyers in the product market. 
C) households are sellers in the resource market. 
D) spending on goods and services flows from firms to households. 
A) firms are sellers in the resource market and the product market. 
B) firms are buyers in the product market. 
C) households are sellers in the resource market. 
D) spending on goods and services flows from firms to households.

Question 16

Which of the following is the most accurate statement about production possibilities?

Accepted Answer

A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. 
A) An economy can produce only on the production possibilities frontier. 
B) An economy can produce at any point inside or outside a production possibilities frontier. 
C) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. 
D) An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.

Question 17

Figure 2-3  
-Refer to Figure 2-3. At which point or points can the economy produce?

Accepted Answer

A) point B, D, E 
B) point A, B, D, E 
C) point D, C 
D) point D 
A) point B, D, E 
B) point A, B, D, E 
C) point D, C 
D) point D

Question 18

Figure 2-11  
-Refer to Figure 2-11. The opportunity cost to the economy of moving from point A to point B is 10 dishwashers.

Accepted Answer

A) True 
 B)False

Question 19

Figure 2-4  
-Refer to Figure 2-4. What is the opportunity cost in terms of toothbrushes of getting 10 additional toasters by moving from point B to point A?

Accepted Answer

A) 20 toothbrushes 
B) 10 toothbrushes 
C) 5 toothbrushes 
D) zero, since the economy has the additional resources to produce 10 additional toasters 
A) 20 toothbrushes 
B) 10 toothbrushes 
C) 5 toothbrushes 
D) zero, since the economy has the additional resources to produce 10 additional toasters

Question 20

How did John Maynard Keynes refer to economics?

Accepted Answer

A) as an easy subject at which very few excel. 
B) as an easy subject but not as easy as philosophy or the pure sciences. 
C) as an easy subject which very few can enjoy. 
D) as an easy subject which deals primarily with common sense. 
A) as an easy subject at which very few excel. 
B) as an easy subject but not as easy as philosophy or the pure sciences. 
C) as an easy subject which very few can enjoy. 
D) as an easy subject which deals primarily with common sense.

Figure 2-9 -Refer to Figure 2-9. What is the correct designation of point A?

Economists outside the government also offer policy advice. Which institution below does NOT publish reports by economists?

What observation did Albert Einstein once make about science?

How did the great economist John Maynard Keynes explain his comment that although economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Figure 2-10 -Refer to Figure 2-10. What is the movement from point A to point B?

Two economists, Adam and Joan, are discussing the possibility of substantially reforming the current federal tax system. Adam thinks the current system is fine but Joan is in favour of reform. Which of the following is the LEAST likely explanation for the disagreement?

Figure 2-4 -Refer to Figure 2-4. What is the opportunity cost of getting 15 additional toasters by moving from point D to point C?

When studying the effects of public policy changes, what have economists often observed?

What do the duties of the economists employed by Human Resources Canada include?

If Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree, what is this an example of?

What is the production possibilities frontier?

Figure 2-6 -Refer to Figure 2-6. What was the most likely cause of the movement from point C to point D?

Which of the following would NOT be considered a factor of production?

An economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Which is true in the circular-flow diagram?

Which of the following is the most accurate statement about production possibilities?

Figure 2-3 -Refer to Figure 2-3. At which point or points can the economy produce?

Figure 2-11 -Refer to Figure 2-11. The opportunity cost to the economy of moving from point A to point B is 10 dishwashers.

Figure 2-4 -Refer to Figure 2-4. What is the opportunity cost in terms of toothbrushes of getting 10 additional toasters by moving from point B to point A?

How did John Maynard Keynes refer to economics?

Ten Principles of Economics

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 2: Thinking Like an Economist

Figure 2-9 -Refer to Figure 2-9. What is the correct designation of point A?

Economists outside the government also offer policy advice. Which institution below does NOT publish reports by economists?

What observation did Albert Einstein once make about science?

How did the great economist John Maynard Keynes explain his comment that although economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?

Figure 2-10 -Refer to Figure 2-10. What is the movement from point A to point B?

Two economists, Adam and Joan, are discussing the possibility of substantially reforming the current federal tax system. Adam thinks the current system is fine but Joan is in favour of reform. Which of the following is the LEAST likely explanation for the disagreement?

Figure 2-4 -Refer to Figure 2-4. What is the opportunity cost of getting 15 additional toasters by moving from point D to point C?

When studying the effects of public policy changes, what have economists often observed?

What do the duties of the economists employed by Human Resources Canada include?

If Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree, what is this an example of?

What is the production possibilities frontier?

Figure 2-6 -Refer to Figure 2-6. What was the most likely cause of the movement from point C to point D?

Which of the following would NOT be considered a factor of production?

An economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Which is true in the circular-flow diagram?

Which of the following is the most accurate statement about production possibilities?

Figure 2-3 -Refer to Figure 2-3. At which point or points can the economy produce?

Figure 2-11 -Refer to Figure 2-11. The opportunity cost to the economy of moving from point A to point B is 10 dishwashers.

Figure 2-4 -Refer to Figure 2-4. What is the opportunity cost in terms of toothbrushes of getting 10 additional toasters by moving from point B to point A?

How did John Maynard Keynes refer to economics?

Ten Principles of Economics

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