Question 1

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

Accepted Answer

A) True 
 B)False

Question 2

In a pie chart,what does each "slice" of the pie represent?

Accepted Answer

A)  a specific percentage of the total pie 
B)  an equal share of the total pie 
C)  the amount of the pie each of the two variables represents 
D)  a different variable 
A)  a specific percentage of the total pie 
B)  an equal share of the total pie 
C)  the amount of the pie each of the two variables represents 
D)  a different variable

Question 3

Suppose an economy produces two goods: food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 45 units of food and 25 machines.This year,it is producing 50 units of food and 30 machines.Which of the following would NOT explain the increase in output?

Accepted Answer

A)  a reduction in unemployment 
B)  an increase in the labour force 
C)  an improvement in technology 
D)  an increase in worker productivity 
A)  a reduction in unemployment 
B)  an increase in the labour force 
C)  an improvement in technology 
D)  an increase in worker productivity

Question 4

Normative statements describe how the world is,while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 5

What are tariffs and quotas?

Accepted Answer

A)  policies that restrict trade among nations 
B)  instruments implemented to increase trade efficiency 
C)  measures of trade surpluses or deficits 
D)  policies meant to improve the well-being of consumers 
A)  policies that restrict trade among nations 
B)  instruments implemented to increase trade efficiency 
C)  measures of trade surpluses or deficits 
D)  policies meant to improve the well-being of consumers

Question 6

Figure 2-8  
-Refer to Figure 2-8.If this economy puts all of its resources into the production of bathtubs,how many could it produce?

Accepted Answer

A)  0 barrels and 16 bathtubs 
B)  12 barrels and 35 bathtubs 
C)  20 barrels and 12 bathtubs 
D)  35 barrels and 0 bathtubs 
A)  0 barrels and 16 bathtubs 
B)  12 barrels and 35 bathtubs 
C)  20 barrels and 12 bathtubs 
D)  35 barrels and 0 bathtubs

Question 7

Figure 2-2  
-Refer to Figure 2-2.What does the outer loop represent?

Accepted Answer

A)  the flow of goods 
B)  the flow of spending 
C)  the flow of factors of production 
D)  the flow of exports 
A)  the flow of goods 
B)  the flow of spending 
C)  the flow of factors of production 
D)  the flow of exports

Question 8

Who said,"The whole of science is nothing more than a refinement of everyday thinking"?

Accepted Answer

A)  Isaac Newton 
B)  Albert Einstein 
C)  John Nash 
D)  Stephen Hawking 
A)  Isaac Newton 
B)  Albert Einstein 
C)  John Nash 
D)  Stephen Hawking

Question 9

Suppose an economy produces two goods: food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 65 units of food and 23 machines.This year,it is producing 72 units of food and 25 machines.Which of the following would NOT explain the increase in output?

Accepted Answer

A)  a reduction in unemployment 
B)  an increase in the labour force 
C)  an improvement in technology 
D)  an increase in worker productivity 
A)  a reduction in unemployment 
B)  an increase in the labour force 
C)  an improvement in technology 
D)  an increase in worker productivity

Question 10

In the simple circular-flow diagram,who owns the factors of production?

Accepted Answer

A)  the government 
B)  firms 
C)  households 
D)  corporations 
A)  the government 
B)  firms 
C)  households 
D)  corporations

Question 11

Which of the following is an example of a product that experiences infrequent price changes?

Accepted Answer

A)  stocks on the Toronto Stock Exchange 
B)  gasoline 
C)  the newsstand price of magazines 
D)  seasonal produce at the grocery store 
A)  stocks on the Toronto Stock Exchange 
B)  gasoline 
C)  the newsstand price of magazines 
D)  seasonal produce at the grocery store

Question 12

For economists,what are the two types of statements about the world?

Accepted Answer

A)  positive statements and false statements 
B)  true statements and false statements 
C)  true statements and normative statements 
D)  positive statements and normative statements 
A)  positive statements and false statements 
B)  true statements and false statements 
C)  true statements and normative statements 
D)  positive statements and normative statements

Question 13

Table 2-1
​Production Possibilities for Toyland  
-Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

Accepted Answer

A)  50 fire trucks 
B)  100 fire trucks 
C)  150 fire trucks 
D)  200 fire trucks 
A)  50 fire trucks 
B)  100 fire trucks 
C)  150 fire trucks 
D)  200 fire trucks

Question 14

What happens in the markets for factors of production?

Accepted Answer

A)  Households provide firms with labour,land,and capital. 
B)  Households provide firms with savings for investment. 
C)  Firms provide households with goods and services. 
D)  The government provides firms with inputs for the production process. 
A)  Households provide firms with labour,land,and capital. 
B)  Households provide firms with savings for investment. 
C)  Firms provide households with goods and services. 
D)  The government provides firms with inputs for the production process.

Question 15

What does macroeconomics study?

Accepted Answer

A)  individual decision makers 
B)  economic history 
C)  economy-wide phenomena 
D)  how firms maximize profit 
A)  individual decision makers 
B)  economic history 
C)  economy-wide phenomena 
D)  how firms maximize profit

Question 16

Figure 2-1  
-Refer to Figure 2-1.Which arrow shows the flow of goods and services?

Accepted Answer

A)  arrow A 
B)  arrow B 
C)  arrow C 
D)  arrow D 
A)  arrow A 
B)  arrow B 
C)  arrow C 
D)  arrow D

Question 17

Which are terms used by an economist?

Accepted Answer

A)  vector spaces and axioms 
B)  torts and venues 
C)  ego and cognitive dissonance 
D)  consumer surplus and deadweight loss 
A)  vector spaces and axioms 
B)  torts and venues 
C)  ego and cognitive dissonance 
D)  consumer surplus and deadweight loss

Question 18

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

Question 19

Which statement best describes economic models?

Accepted Answer

A)  They are based on unrealistic assumptions. 
B)  They accurately describe the reality. 
C)  They allow economists to learn how the economy works. 
D)  They include as many variables as possible. 
A)  They are based on unrealistic assumptions. 
B)  They accurately describe the reality. 
C)  They allow economists to learn how the economy works. 
D)  They include as many variables as possible.

Question 20

Why is the use of theory and observation more difficult in economics than in sciences,such as physics?

Accepted Answer

A)  It is difficult to evaluate an economic experiment. 
B)  It is difficult to devise an economic experiment. 
C)  It is difficult to actually perform an experiment in an economic system. 
D)  It is difficult to find participants for an economics experiment. 
A)  It is difficult to evaluate an economic experiment. 
B)  It is difficult to devise an economic experiment. 
C)  It is difficult to actually perform an experiment in an economic system. 
D)  It is difficult to find participants for an economics experiment.

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

In a pie chart,what does each "slice" of the pie represent?

Normative statements describe how the world is,while positive statements prescribe how the world should be.

What are tariffs and quotas?

Figure 2-8 -Refer to Figure 2-8.If this economy puts all of its resources into the production of bathtubs,how many could it produce?

Figure 2-2 -Refer to Figure 2-2.What does the outer loop represent?

Who said,"The whole of science is nothing more than a refinement of everyday thinking"?

In the simple circular-flow diagram,who owns the factors of production?

Which of the following is an example of a product that experiences infrequent price changes?

For economists,what are the two types of statements about the world?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

What happens in the markets for factors of production?

What does macroeconomics study?

Figure 2-1 -Refer to Figure 2-1.Which arrow shows the flow of goods and services?

Which are terms used by an economist?

How did John Maynard Keynes refer to economics?

Which statement best describes economic models?

Why is the use of theory and observation more difficult in economics than in sciences,such as physics?

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 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

Exam 2: Thinking Like an Economist

All scientific models,including economic models,simplify reality in order to improve our understanding of it.

In a pie chart,what does each "slice" of the pie represent?

Normative statements describe how the world is,while positive statements prescribe how the world should be.

What are tariffs and quotas?

Figure 2-8 -Refer to Figure 2-8.If this economy puts all of its resources into the production of bathtubs,how many could it produce?

Figure 2-2 -Refer to Figure 2-2.What does the outer loop represent?

Who said,"The whole of science is nothing more than a refinement of everyday thinking"?

In the simple circular-flow diagram,who owns the factors of production?

Which of the following is an example of a product that experiences infrequent price changes?

For economists,what are the two types of statements about the world?

Table 2-1 ​Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

What happens in the markets for factors of production?

What does macroeconomics study?

Figure 2-1 -Refer to Figure 2-1.Which arrow shows the flow of goods and services?

Which are terms used by an economist?

How did John Maynard Keynes refer to economics?

Which statement best describes economic models?

Why is the use of theory and observation more difficult in economics than in sciences,such as physics?

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 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

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?