Question 1

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 2

When was Adam Smith's book The Wealth of Nations published?

Accepted Answer

A)  1692 
B)  1776 
C)  1816 
D)  1936 
A)  1692 
B)  1776 
C)  1816 
D)  1936

Question 3

Which good best meets the definition of scarcity?

Accepted Answer

A)  air 
B)  water in the ocean 
C)  electricity in a city 
D)  wood in a forest 
A)  air 
B)  water in the ocean 
C)  electricity in a city 
D)  wood in a forest

Question 4

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 5

If France is better than Latvia at producing wine,but Latvia is better than France at producing lumber,what should happen?

Accepted Answer

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

Question 6

What do households and economies have in common?

Accepted Answer

A)  They both must allocate scarce resources. 
B)  They both face difficulties saving money. 
C)  They both must sell the goods and services they produce. 
D)  They both must have a central decision maker. 
A)  They both must allocate scarce resources. 
B)  They both face difficulties saving money. 
C)  They both must sell the goods and services they produce. 
D)  They both must have a central decision maker.

Question 7

What is an example of an externality?

Accepted Answer

A)  the impact of bad weather on the income of farmers 
B)  the impact of the personal income tax on a person's ability to purchase goods and services 
C)  the impact of pollution from a factory on the health of people in the vicinity of the factory 
D)  the impact of increases in health care costs on the health of individuals in society 
A)  the impact of bad weather on the income of farmers 
B)  the impact of the personal income tax on a person's ability to purchase goods and services 
C)  the impact of pollution from a factory on the health of people in the vicinity of the factory 
D)  the impact of increases in health care costs on the health of individuals in society

Question 8

What would happen without the government's protection of property rights?

Accepted Answer

A)  Businesses would have less incentive to provide goods and services. 
B)  There would be less government regulation of businesses and prices would be lower for consumers. 
C)  Taxes would be lower,causing less market inefficiencies. 
D)  Businesses would have more freedom with production processes. 
A)  Businesses would have less incentive to provide goods and services. 
B)  There would be less government regulation of businesses and prices would be lower for consumers. 
C)  Taxes would be lower,causing less market inefficiencies. 
D)  Businesses would have more freedom with production processes.

Question 9

How can trade benefit a family?

Accepted Answer

A)  by allowing the family to buy a greater variety of goods and services at a lower cost 
B)  by allowing each person to buy only the goods and services they want most 
C)  only if the family is not in economic competition with other families 
D)  trade can only benefit entire nations,not individuals 
A)  by allowing the family to buy a greater variety of goods and services at a lower cost 
B)  by allowing each person to buy only the goods and services they want most 
C)  only if the family is not in economic competition with other families 
D)  trade can only benefit entire nations,not individuals

Question 10

What concept does economics primarily deal with?

Accepted Answer

A)  scarcity 
B)  poverty 
C)  change 
D)  power 
A)  scarcity 
B)  poverty 
C)  change 
D)  power

Question 11

Which of the following is most likely to generate an externality?

Accepted Answer

A)  Teachers at a local high school purchase a coffee maker for the staffroom. 
B)  A couple with young children moves next door to the children's grandparents. 
C)  A newlywed couple buys furniture for their condo. 
D)  John buys a tractor to mow his newly purchased five-hectare lot. 
A)  Teachers at a local high school purchase a coffee maker for the staffroom. 
B)  A couple with young children moves next door to the children's grandparents. 
C)  A newlywed couple buys furniture for their condo. 
D)  John buys a tractor to mow his newly purchased five-hectare lot.

Question 12

How do people make decisions at the margin?

Accepted Answer

A)  by following the business cycle 
B)  by experience 
C)  by calculating dollar costs 
D)  by comparing costs and benefits 
A)  by following the business cycle 
B)  by experience 
C)  by calculating dollar costs 
D)  by comparing costs and benefits

Question 13

What is likely to occur when the government implements programs such as progressive income tax rates?

Accepted Answer

A)  Equity and efficiency is increased. 
B)  Equity is increased and efficiency is decreased. 
C)  Equity is decreased,and efficiency is increased. 
D)  Equity is decreased,and efficiency is decreased. 
A)  Equity and efficiency is increased. 
B)  Equity is increased and efficiency is decreased. 
C)  Equity is decreased,and efficiency is increased. 
D)  Equity is decreased,and efficiency is decreased.

Question 14

If the average cost of transporting a passenger on the train from Brockville to Toronto is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

Accepted Answer

A) True 
 B)False

Question 15

David receives $200 as a birthday gift.In deciding how to spend the money,he narrows his options down to four: A,B,C,and D.The price of each option is $100,but David prefers B to C,C to A,and A to D.What is the opportunity cost of option B?

Accepted Answer

A)  It is David's valuation of C. 
B)  It is David's valuation of A,C,and D together. 
C)  It is $200. 
D)  It is $100. 
A)  It is David's valuation of C. 
B)  It is David's valuation of A,C,and D together. 
C)  It is $200. 
D)  It is $100.

Question 16

For society,when is a good NOT scarce?

Accepted Answer

A)  if at least one individual in society can obtain all he or she wants of the good 
B)  if firms are producing at full capacity 
C)  if all members of society can have all they want of the good 
D)  if those who have enough income can buy all they want of the good 
A)  if at least one individual in society can obtain all he or she wants of the good 
B)  if firms are producing at full capacity 
C)  if all members of society can have all they want of the good 
D)  if those who have enough income can buy all they want of the good

Question 17

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 18

What will be the probable outcome if Japan chooses to engage in trade?

Accepted Answer

A)  It will only benefit if it trades with countries that produce goods it cannot produce. 
B)  It cannot benefit if it trades with less developed countries. 
C)  It will only benefit if it trades with countries that are geographically close Japan. 
D)  It can benefit by trading with any other country. 
A)  It will only benefit if it trades with countries that produce goods it cannot produce. 
B)  It cannot benefit if it trades with less developed countries. 
C)  It will only benefit if it trades with countries that are geographically close Japan. 
D)  It can benefit by trading with any other country.

Question 19

Over the past century,how much has the average income in Canada risen by?

Accepted Answer

A)  twofold 
B)  fivefold 
C)  eightfold 
D)  tenfold 
A)  twofold 
B)  fivefold 
C)  eightfold 
D)  tenfold

Question 20

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.

What does making decisions "at the margin" mean?

When was Adam Smith's book The Wealth of Nations published?

Which good best meets the definition of scarcity?

How does the invisible hand direct economic activity?

If France is better than Latvia at producing wine,but Latvia is better than France at producing lumber,what should happen?

What do households and economies have in common?

What is an example of an externality?

What would happen without the government's protection of property rights?

How can trade benefit a family?

What concept does economics primarily deal with?

Which of the following is most likely to generate an externality?

How do people make decisions at the margin?

What is likely to occur when the government implements programs such as progressive income tax rates?

If the average cost of transporting a passenger on the train from Brockville to Toronto is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

David receives $200 as a birthday gift.In deciding how to spend the money,he narrows his options down to four: A,B,C,and D.The price of each option is $100,but David prefers B to C,C to A,and A to D.What is the opportunity cost of option B?

For society,when is a good NOT scarce?

What is one definition of equity?

What will be the probable outcome if Japan chooses to engage in trade?

Over the past century,how much has the average income in Canada risen by?

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

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 Small 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 does making decisions "at the margin" mean?

When was Adam Smith's book The Wealth of Nations published?

Which good best meets the definition of scarcity?

How does the invisible hand direct economic activity?

If France is better than Latvia at producing wine,but Latvia is better than France at producing lumber,what should happen?

What do households and economies have in common?

What is an example of an externality?

What would happen without the government's protection of property rights?

How can trade benefit a family?

What concept does economics primarily deal with?

Which of the following is most likely to generate an externality?

How do people make decisions at the margin?

What is likely to occur when the government implements programs such as progressive income tax rates?

If the average cost of transporting a passenger on the train from Brockville to Toronto is $75,it would be irrational for the railroad to allow any passenger to ride for less than $75.

David receives $200 as a birthday gift.In deciding how to spend the money,he narrows his options down to four: A,B,C,and D.The price of each option is $100,but David prefers B to C,C to A,and A to D.What is the opportunity cost of option B?

For society,when is a good NOT scarce?

What is one definition of equity?

What will be the probable outcome if Japan chooses to engage in trade?

Over the past century,how much has the average income in Canada risen by?

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

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 Small 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