Question 1

An efficient outcome in economics is one in which the economy is conserving the largest possible amount of resources,while still meeting the needs of society.

Accepted Answer

A) True 
 B)False

Question 2

While the scientific method is applicable to studying natural sciences,it is not useful in studying an economic system.

Accepted Answer

A) True 
 B)False

Question 3

Why did George Bernard Shaw,among others,criticize economists?

Accepted Answer

A)  because they have too much influence over government decisions 
B)  because many ideas are too theoretical and therefore do not work in "real life" 
C)  because they tend to speak a different language,causing most people to not understand them 
D)  because they seem to give conflicting advice to policymakers 
A)  because they have too much influence over government decisions 
B)  because many ideas are too theoretical and therefore do not work in "real life" 
C)  because they tend to speak a different language,causing most people to not understand them 
D)  because they seem to give conflicting advice to policymakers

Question 4

Which statement best characterizes the money held by households in the circular-flow diagram?

Accepted Answer

A)  It is earned from the sale of factors of production. 
B)  It becomes profit to firms. 
C)  It originates mainly from international trade. 
D)  It is used to purchase factors of production. 
A)  It is earned from the sale of factors of production. 
B)  It becomes profit to firms. 
C)  It originates mainly from international trade. 
D)  It is used to purchase factors of production.

Question 5

What did a survey that asked the opinion of academic,business,and government economists on ten propositions about economic policy find?

Accepted Answer

A)  The respondents were almost equally divided on the propositions. 
B)  The respondents favoured the propositions by a slight margin. 
C)  The respondents disagreed with the propositions by a slight margin. 
D)  There was overwhelming endorsement of the propositions among the respondents. 
A)  The respondents were almost equally divided on the propositions. 
B)  The respondents favoured the propositions by a slight margin. 
C)  The respondents disagreed with the propositions by a slight margin. 
D)  There was overwhelming endorsement of the propositions among the respondents.

Question 6

Figure 2-7  
-Refer to Figure 2-7.Which of the following would best describe the movement from frontier A to B?

Accepted Answer

A)  society's preference for consumer and capital goods has changed 
B)  economic growth 
C)  a more equitable distribution of income 
D)  an improvement in the allocation of resources 
A)  society's preference for consumer and capital goods has changed 
B)  economic growth 
C)  a more equitable distribution of income 
D)  an improvement in the allocation of resources

Question 7

Table 2-1
​Production Possibilities for Toyland  
-Refer to Table 2-1.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced?

Accepted Answer

A)  It is constant and equal to 50 fire trucks. 
B)  It is constant and equal to 100 fire trucks. 
C)  It decreases as more dolls are produced. 
D)  It increases as more dolls are produced. 
A)  It is constant and equal to 50 fire trucks. 
B)  It is constant and equal to 100 fire trucks. 
C)  It decreases as more dolls are produced. 
D)  It increases as more dolls are produced.

Question 8

The country of Econoland produces two goods: textbooks and widgets.Last year,it produced 200 textbooks and 500 widgets.This year,it produced 250 textbooks and 600 widgets.Given no other information,which of the following could NOT explain the change?

Accepted Answer

A)  Econoland experienced a reduction in unemployment. 
B)  Econoland experienced an improvement in widget-making technology. 
C)  Econoland acquired more resources. 
D)  Econoland experienced a high level of emigration out of the country. 
A)  Econoland experienced a reduction in unemployment. 
B)  Econoland experienced an improvement in widget-making technology. 
C)  Econoland acquired more resources. 
D)  Econoland experienced a high level of emigration out of the country.

Question 9

What does microeconomics study?

Accepted Answer

A)  the behaviour of consumers 
B)  how individual households and firms make decisions 
C)  how government affects the economy 
D)  how the economy as a whole works 
A)  the behaviour of consumers 
B)  how individual households and firms make decisions 
C)  how government affects the economy 
D)  how the economy as a whole works

Question 10

Draw a production possibilities frontier showing increasing opportunity cost for hammers and horseshoes.
a.On the graph,identify the area of feasible outcomes and the area of unfeasible outcomes.
b.On the graph,label a point that is efficient as point E and a point that is inefficient as point I.
c.On the graph,illustrate the effect of the discovery of a new vein of iron ore,a resource needed to make both horseshoes and hammers,on this economy.
d.On a separate graph for hammers and horseshoes,illustrate the effect a new computerized assembly line in the production of hammers would have.

Accepted Answer

The graph on the lef

Question 11

A production possibilities frontier is a graph that shows the various combinations of outputs the economy can possibly produce given its factors of production and technology.

Accepted Answer

A) True 
 B)False

Question 12

What is another term for factors of production?

Accepted Answer

A)  inputs 
B)  outputs 
C)  goods 
D)  services 
A)  inputs 
B)  outputs 
C)  goods 
D)  services

Question 13

What are factors of production?

Accepted Answer

A)  positive or negative changes in inventory 
B)  weather and social and political conditions that affect production 
C)  the physical relationships between economic inputs and outputs 
D)  inputs into the production process 
A)  positive or negative changes in inventory 
B)  weather and social and political conditions that affect production 
C)  the physical relationships between economic inputs and outputs 
D)  inputs into the production process

Question 14

Figure 2-8  
-Refer to Figure 2-8.What is the opportunity cost of moving from point A to point B?

Accepted Answer

A)  8 bathtubs 
B)  20 barrels 
C)  the difference between the 8 bathtubs you get and the 20 barrels you give up 
D)  the difference between the 20 barrels you get and the 8 bathtubs you give up 
A)  8 bathtubs 
B)  20 barrels 
C)  the difference between the 8 bathtubs you get and the 20 barrels you give up 
D)  the difference between the 20 barrels you get and the 8 bathtubs you give up

Question 15

What is another name for goods and services produced by firms?

Accepted Answer

A)  factors of production 
B)  outputs 
C)  inputs 
D)  resources 
A)  factors of production 
B)  outputs 
C)  inputs 
D)  resources

Question 16

Why are historical episodes valuable to economists?

Accepted Answer

A)  They allow economists to see how far the discipline has evolved. 
B)  It is easier to obtain historical data than observe current trends. 
C)  It is easier to evaluate a past situation than to predict a future situation. 
D)  They allow economists to evaluate economic theories of the present. 
A)  They allow economists to see how far the discipline has evolved. 
B)  It is easier to obtain historical data than observe current trends. 
C)  It is easier to evaluate a past situation than to predict a future situation. 
D)  They allow economists to evaluate economic theories of the present.

Question 17

Figure 2-8  
-Refer to Figure 2-8.What would happen if this economy moved from point C to point E?

Accepted Answer

A)  It still would not be producing efficiently. 
B)  There would be no gain in either bathtubs or barrels. 
C)  It would be producing more barrels and more bathtubs than at point C. 
D)  It is not possible for this economy to move from point C to point E without additional resources. 
A)  It still would not be producing efficiently. 
B)  There would be no gain in either bathtubs or barrels. 
C)  It would be producing more barrels and more bathtubs than at point C. 
D)  It is not possible for this economy to move from point C to point E without additional resources.

Question 18

What is meant by scientific method?

Accepted Answer

A)  the use of modern electronic testing equipment to understand the world 
B)  the dispassionate development and testing of theories about how the world works 
C)  the use of controlled experiments in understanding the way the world works 
D)  finding evidence to support preconceived theories about how the world works 
A)  the use of modern electronic testing equipment to understand the world 
B)  the dispassionate development and testing of theories about how the world works 
C)  the use of controlled experiments in understanding the way the world works 
D)  finding evidence to support preconceived theories about how the world works

Question 19

Which of the following is NOT a positive statement?

Accepted Answer

A)  Lower oil prices will result in higher unemployment. 
B)  Equity is more important than efficiency. 
C)  Trade restrictions lower our standard of living. 
D)  If a nation wants to avoid inflation,it should not print too much money. 
A)  Lower oil prices will result in higher unemployment. 
B)  Equity is more important than efficiency. 
C)  Trade restrictions lower our standard of living. 
D)  If a nation wants to avoid inflation,it should not print too much money.

Question 20

What do economists at the Bank of Canada do?

Accepted Answer

A)  analyze data on labour markets 
B)  help negotiate trade agreements 
C)  analyze macroeconomic developments 
D)  enforce competition laws 
A)  analyze data on labour markets 
B)  help negotiate trade agreements 
C)  analyze macroeconomic developments 
D)  enforce competition laws

An efficient outcome in economics is one in which the economy is conserving the largest possible amount of resources,while still meeting the needs of society.

While the scientific method is applicable to studying natural sciences,it is not useful in studying an economic system.

Why did George Bernard Shaw,among others,criticize economists?

Which statement best characterizes the money held by households in the circular-flow diagram?

What did a survey that asked the opinion of academic,business,and government economists on ten propositions about economic policy find?

Figure 2-7 -Refer to Figure 2-7.Which of the following would best describe the movement from frontier A to B?

Table 2-1 Production Possibilities for Toyland -Refer to Table 2-1.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced?

The country of Econoland produces two goods: textbooks and widgets.Last year,it produced 200 textbooks and 500 widgets.This year,it produced 250 textbooks and 600 widgets.Given no other information,which of the following could NOT explain the change?

What does microeconomics study?

A production possibilities frontier is a graph that shows the various combinations of outputs the economy can possibly produce given its factors of production and technology.

What is another term for factors of production?

What are factors of production?

Figure 2-8 -Refer to Figure 2-8.What is the opportunity cost of moving from point A to point B?

What is another name for goods and services produced by firms?

Why are historical episodes valuable to economists?

Figure 2-8 -Refer to Figure 2-8.What would happen if this economy moved from point C to point E?

What is meant by scientific method?

Which of the following is NOT a positive statement?

What do economists at the Bank of Canada do?

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

An efficient outcome in economics is one in which the economy is conserving the largest possible amount of resources,while still meeting the needs of society.

While the scientific method is applicable to studying natural sciences,it is not useful in studying an economic system.

Why did George Bernard Shaw,among others,criticize economists?

Which statement best characterizes the money held by households in the circular-flow diagram?

What did a survey that asked the opinion of academic,business,and government economists on ten propositions about economic policy find?

Figure 2-7 -Refer to Figure 2-7.Which of the following would best describe the movement from frontier A to B?

Table 2-1 ​Production Possibilities for Toyland -Refer to Table 2-1.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced?

The country of Econoland produces two goods: textbooks and widgets.Last year,it produced 200 textbooks and 500 widgets.This year,it produced 250 textbooks and 600 widgets.Given no other information,which of the following could NOT explain the change?

What does microeconomics study?

A production possibilities frontier is a graph that shows the various combinations of outputs the economy can possibly produce given its factors of production and technology.

What is another term for factors of production?

What are factors of production?

Figure 2-8 -Refer to Figure 2-8.What is the opportunity cost of moving from point A to point B?

What is another name for goods and services produced by firms?

Why are historical episodes valuable to economists?

Figure 2-8 -Refer to Figure 2-8.What would happen if this economy moved from point C to point E?

What is meant by scientific method?

Which of the following is NOT a positive statement?

What do economists at the Bank of Canada do?

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.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced?