Question 1

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 2

Approximately what percentage of the world's economies experience scarcity?

Accepted Answer

A)  25 
B)  50 
C)  75 
D)  100 
A)  25 
B)  50 
C)  75 
D)  100

Question 3

What is the best example of a marginal change?

Accepted Answer

A)  After graduating from university,Neville's income increases from $1000 per month to $1,100 per month. 
B)  Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. 
C)  Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D)  A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles. 
A)  After graduating from university,Neville's income increases from $1000 per month to $1,100 per month. 
B)  Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. 
C)  Housing prices in an area increase by 50% when a new freeway is built in a small town. 
D)  A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles.

Question 4

Mallory decides to spend three hours working overtime rather than watching Netflix with her friends.She earns $9 an hour.What is her opportunity cost of working?

Accepted Answer

A)  the $27 she earns working 
B)  the $27 minus the enjoyment she would have received from watching Netflix 
C)  the enjoyment she would have received had she watched Netflix 
D)  nothing,because she would have received less than $27 of enjoyment from Netflix 
A)  the $27 she earns working 
B)  the $27 minus the enjoyment she would have received from watching Netflix 
C)  the enjoyment she would have received had she watched Netflix 
D)  nothing,because she would have received less than $27 of enjoyment from Netflix

Question 5

Government spending is the primary source of inflation.

Accepted Answer

A) True 
 B)False

Question 6

What is the business cycle?

Accepted Answer

A)  the relationship between unemployment and inflation 
B)  the irregular fluctuations in economic activity 
C)  the positive relationship between the quantity of money in an economy and inflation 
D)  the negative relationship between imports and net exports 
A)  the relationship between unemployment and inflation 
B)  the irregular fluctuations in economic activity 
C)  the positive relationship between the quantity of money in an economy and inflation 
D)  the negative relationship between imports and net exports

Question 7

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

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

Which activity will most likely result in an external benefit?

Accepted Answer

A)  a student buys a deck of cards to play solitaire in her dorm room 
B)  a group of children plant a vegetable garden on a vacant lot in their neighbourhood 
C)  an executive purchases a book to read on a business trip 
D)  a 10-year-old buys new Nikes with his allowance money he has saved 
A)  a student buys a deck of cards to play solitaire in her dorm room 
B)  a group of children plant a vegetable garden on a vacant lot in their neighbourhood 
C)  an executive purchases a book to read on a business trip 
D)  a 10-year-old buys new Nikes with his allowance money he has saved

Question 10

What does the term "market failure" refer to?

Accepted Answer

A)  a situation in which the market on its own fails to allocate resources efficiently 
B)  an unsuccessful advertising campaign that reduces consumer demand 
C)  a situation in which competition among firms leads to bankruptcies 
D)  a firm that is forced out of business because of new by-laws 
A)  a situation in which the market on its own fails to allocate resources efficiently 
B)  an unsuccessful advertising campaign that reduces consumer demand 
C)  a situation in which competition among firms leads to bankruptcies 
D)  a firm that is forced out of business because of new by-laws

Question 11

Why are gasoline prices in Canada higher than in the United States?

Accepted Answer

A)  higher taxes in Canada 
B)  larger oil reserves in the United States 
C)  higher cost of transporting oil in Canada 
D)  higher cost of refining oil in Canada 
A)  higher taxes in Canada 
B)  larger oil reserves in the United States 
C)  higher cost of transporting oil in Canada 
D)  higher cost of refining oil in Canada

Question 12

How does a tradeoff exist between a clean environment and a higher level of income?

Accepted Answer

A)  Studies show that individuals with higher levels of income purchase more environmentally friendly products than low-income individuals. 
B)  To pay for pollution cleanup,the government must increase taxes,which lowers income. 
C)  Laws that reduce pollution raise costs of production and reduce incomes. 
D)  By employing individuals to clean up pollution,employment and income both rise. 
A)  Studies show that individuals with higher levels of income purchase more environmentally friendly products than low-income individuals. 
B)  To pay for pollution cleanup,the government must increase taxes,which lowers income. 
C)  Laws that reduce pollution raise costs of production and reduce incomes. 
D)  By employing individuals to clean up pollution,employment and income both rise.

Question 13

In which situation 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 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

The government can potentially improve market outcomes if market inequalities or market failure exist.

Accepted Answer

A) True 
 B)False

Question 17

How could you justify higher income tax rates on rich people in Canada?

Accepted Answer

A)  on the basis of market efficiency 
B)  on the basis of the lack of other sources of government revenue 
C)  on the basis of equity for society 
D)  on the basis of government bias against the wealthy 
A)  on the basis of market efficiency 
B)  on the basis of the lack of other sources of government revenue 
C)  on the basis of equity for society 
D)  on the basis of government bias against the wealthy

Question 18

Lisa buys a 1982 BMW,which she plans to restore and sell.She anticipates that the cost of the car and the repairs will be $10,000 and that she can sell it for $15,000.After she has spent $10,000,she discovers she needs to replace the engine,which will cost $4000.She can sell the car without the new engine for $11,000.What should Lisa do?

Accepted Answer

A)  She should complete the repairs for $4000 and sell the car for $15,000. 
B)  She should sell the car now for $11,000. 
C)  She should keep the car because selling it would be a loss. 
D)  She should be totally indifferent between finishing the project and selling the car now. 
A)  She should complete the repairs for $4000 and sell the car for $15,000. 
B)  She should sell the car now for $11,000. 
C)  She should keep the car because selling it would be a loss. 
D)  She should be totally indifferent between finishing the project and selling the car now.

Question 19

Which statement best describes the relationship between inflation and unemployment?

Accepted Answer

A)  In the short run,reducing inflation is associated with falling unemployment. 
B)  In the short run,reducing inflation is associated with rising unemployment. 
C)  In the long run,reducing inflation is associated with falling unemployment. 
D)  In the long run,reducing inflation is associated with rising unemployment. 
A)  In the short run,reducing inflation is associated with falling unemployment. 
B)  In the short run,reducing inflation is associated with rising unemployment. 
C)  In the long run,reducing inflation is associated with falling unemployment. 
D)  In the long run,reducing inflation is associated with rising unemployment.

Question 20

When and where did one of the worst episodes of inflation occur?

Accepted Answer

A)  in Canada in the 1990s 
B)  in Argentina in the 1950s 
C)  in Russia in the 1930s 
D)  in Germany in the 1920s 
A)  in Canada in the 1990s 
B)  in Argentina in the 1950s 
C)  in Russia in the 1930s 
D)  in Germany in the 1920s

What happens when government policies are being designed?

Approximately what percentage of the world's economies experience scarcity?

What is the best example of a marginal change?

Mallory decides to spend three hours working overtime rather than watching Netflix with her friends.She earns $9 an hour.What is her opportunity cost of working?

Government spending is the primary source of inflation.

What is the business cycle?

Trade with any nation can be mutually beneficial.

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

Which activity will most likely result in an external benefit?

What does the term "market failure" refer to?

Why are gasoline prices in Canada higher than in the United States?

How does a tradeoff exist between a clean environment and a higher level of income?

In which situation would economists use the word equity?

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

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

The government can potentially improve market outcomes if market inequalities or market failure exist.

How could you justify higher income tax rates on rich people in Canada?

Which statement best describes the relationship between inflation and unemployment?

When and where did one of the worst episodes of inflation occur?

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 happens when government policies are being designed?

Approximately what percentage of the world's economies experience scarcity?

What is the best example of a marginal change?

Mallory decides to spend three hours working overtime rather than watching Netflix with her friends.She earns $9 an hour.What is her opportunity cost of working?

Government spending is the primary source of inflation.

What is the business cycle?

Trade with any nation can be mutually beneficial.

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

Which activity will most likely result in an external benefit?

What does the term "market failure" refer to?

Why are gasoline prices in Canada higher than in the United States?

How does a tradeoff exist between a clean environment and a higher level of income?

In which situation would economists use the word equity?

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

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

The government can potentially improve market outcomes if market inequalities or market failure exist.

How could you justify higher income tax rates on rich people in Canada?

Which statement best describes the relationship between inflation and unemployment?

When and where did one of the worst episodes of inflation occur?

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