Question 1

Which of the following is an example of a firm with market power?

Accepted Answer

A)  a coffee shop in Halifax 
B)  a hot dog vendor in Vancouver 
C)  Canada's Wonderland theme park in Toronto 
D)  an elementary school in St. Johns 
A)  a coffee shop in Halifax 
B)  a hot dog vendor in Vancouver 
C)  Canada's Wonderland theme park in Toronto 
D)  an elementary school in St. Johns C

Question 2

When does a rational decision maker take an action?

Accepted Answer

A)  only if the marginal benefit is less than the marginal cost 
B)  only if the marginal benefit is greater than the marginal cost 
C)  only if the average benefit is greater than the average cost 
D)  only if the marginal benefit is greater than both the average cost and the marginal cost 
A)  only if the marginal benefit is less than the marginal cost 
B)  only if the marginal benefit is greater than the marginal cost 
C)  only if the average benefit is greater than the average cost 
D)  only if the marginal benefit is greater than both the average cost and the marginal cost B

Question 3

Suppose that the average income of an Egyptian is higher than the average income of a Namibian. What might you conclude?

Accepted Answer

A)  Namibia firms are faced with stricter government regulations than Egyptian firms. 
B)  Total income is divided among fewer workers in Egypt since it has a smaller labour force than Namibia. 
C)  Egypt's climate allows for longer growing seasons and therefore Egypt can produce large quantities of grain. 
D)  Productivity in Egypt is higher than in Namibia. 
A)  Namibia firms are faced with stricter government regulations than Egyptian firms. 
B)  Total income is divided among fewer workers in Egypt since it has a smaller labour force than Namibia. 
C)  Egypt's climate allows for longer growing seasons and therefore Egypt can produce large quantities of grain. 
D)  Productivity in Egypt is higher than in Namibia. D

Question 4

What is an increase in the overall level of prices in an economy called?

Accepted Answer

A)  economic growth 
B)  inflation 
C)  market power 
D)  productivity 
A)  economic growth 
B)  inflation 
C)  market power 
D)  productivity

Question 5

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

Accepted Answer

A)  lower the price of the remaining donuts even if the price falls below $2.00 
B)  lower the price of the remaining donuts as long as it's more than $2.00 
C)  lower the price on all donuts so they will all be sold earlier in the day 
D)  donate them to the local Food Bank and produce ten fewer dozen tomorrow 
A)  lower the price of the remaining donuts even if the price falls below $2.00 
B)  lower the price of the remaining donuts as long as it's more than $2.00 
C)  lower the price on all donuts so they will all be sold earlier in the day 
D)  donate them to the local Food Bank and produce ten fewer dozen tomorrow

Question 6

Which statement does NOT accurately describe the article "Risk, Reward and the Economics of the Criminal Mind"?

Accepted Answer

A)  Crime has been on the decline. 
B)  Criminals do not respond to economic incentives. 
C)  Criminals are engaging in different types of activities. 
D)  Criminals are getting smarter and using better technology. 
A)  Crime has been on the decline. 
B)  Criminals do not respond to economic incentives. 
C)  Criminals are engaging in different types of activities. 
D)  Criminals are getting smarter and using better technology.

Question 7

Stephen spends an hour studying instead of playing soccer with his friends. What is the opportunity cost to him of studying?

Accepted Answer

A)  the improvement in his grades from studying for the hour 
B)  the difference between the improvement in his grades from studying minus the enjoyment of playing soccer 
C)  the enjoyment and exercise he would have received had he played soccer 
D)  nothing, because Stephen chose to study rather than to play soccer so the value of studying must have been greater than the value of playing soccer 
A)  the improvement in his grades from studying for the hour 
B)  the difference between the improvement in his grades from studying minus the enjoyment of playing soccer 
C)  the enjoyment and exercise he would have received had he played soccer 
D)  nothing, because Stephen chose to study rather than to play soccer so the value of studying must have been greater than the value of playing soccer

Question 8

Which of the following would NOT be a result of laws that require firms to reduce pollution?

Accepted Answer

A)  lower spending by government 
B)  higher prices to consumers 
C)  lower wages to workers 
D)  smaller profit to firms 
A)  lower spending by government 
B)  higher prices to consumers 
C)  lower wages to workers 
D)  smaller profit to firms

Question 9

In the nation of Dictatorland, farmers traditionally feed grain to their livestock. Central planners, however, decided to increase the price of grain to make grain farmers happy and to reduce the price of bread made from that grain to make city dwellers happy. Now the price of bread is lower than the price of grain. What might we now expect?

Accepted Answer

A)  farmers to continue to feed grain to their livestock 
B)  farmers to start feeding bread to their livestock 
C)  city dwellers to start buying grain to make bread to eat 
D)  city dwellers to start buying grain to make bread to sell 
A)  farmers to continue to feed grain to their livestock 
B)  farmers to start feeding bread to their livestock 
C)  city dwellers to start buying grain to make bread to eat 
D)  city dwellers to start buying grain to make bread to sell

Question 10

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 11

If Scotland is better than Ireland at producing whisky, but Ireland is better than Scotland at producing beer, what should happen?

Accepted Answer

A)  Ireland should sell beer to Scotland and should buy Scottish whisky. 
B)  Ireland should impose a tariff on Scottish whisky in order to protect jobs in the Irish beer industry. 
C)  Ireland should subsidize its whisky industry so that it can compete with Scottish whisky. 
D)  Ireland should put a quota on the amount of Scottish whisky imported. 
A)  Ireland should sell beer to Scotland and should buy Scottish whisky. 
B)  Ireland should impose a tariff on Scottish whisky in order to protect jobs in the Irish beer industry. 
C)  Ireland should subsidize its whisky industry so that it can compete with Scottish whisky. 
D)  Ireland should put a quota on the amount of Scottish whisky imported.

Question 12

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Accepted Answer

A)  if it charged no less than $140 for the three remaining seats 
B)  if it charged more than $140 for the three remaining seats 
C)  if it charged any ticket price above $0 for the remaining seats 
D)  if it left the seats empty 
A)  if it charged no less than $140 for the three remaining seats 
B)  if it charged more than $140 for the three remaining seats 
C)  if it charged any ticket price above $0 for the remaining seats 
D)  if it left the seats empty

Question 13

Russell has spent $10,000 purchasing and repairing a Land Rover Defender, which he expects to sell for $14,000. He discovers that he needs an additional repair, which will cost $4400. He can sell the Land Rover Defender as it is now for $3600. What should he do?

Accepted Answer

A)  He should take the $3600. 
B)  He should never sell something for less than it cost. 
C)  He should complete the repairs and sell the Land Rover Defender. 
D)  It doesn't matter which action he takes; the outcome is the same either way. 
A)  He should take the $3600. 
B)  He should never sell something for less than it cost. 
C)  He should complete the repairs and sell the Land Rover Defender. 
D)  It doesn't matter which action he takes; the outcome is the same either way.

Question 14

Which statement best describes the concept represented by the adage "There is no such thing as a free lunch"?

Accepted Answer

A)  Melissa can only attend the concert if she takes her sister with her. 
B)  Greg is hungry and homeless. 
C)  Brian must repair the tire on his bike before he can ride it to class. 
D)  Olivia must decide between skiing at Whistler or Lake Louise for spring break. 
A)  Melissa can only attend the concert if she takes her sister with her. 
B)  Greg is hungry and homeless. 
C)  Brian must repair the tire on his bike before he can ride it to class. 
D)  Olivia must decide between skiing at Whistler or Lake Louise for spring break.

Question 15

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 16

According to economists, what do people respond to?

Accepted Answer

A)  laws 
B)  incentives 
C)  threats more than rewards 
D)  positives, but not negatives 
A)  laws 
B)  incentives 
C)  threats more than rewards 
D)  positives, but not negatives

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

What is NOT included in the decisions that every society must make?

Accepted Answer

A)  what goods will be produced 
B)  who will produce the goods 
C)  what determines consumer preferences 
D)  who will consume the goods 
A)  what goods will be produced 
B)  who will produce the goods 
C)  what determines consumer preferences 
D)  who will consume the goods

Question 19

If the average cost of transporting a passenger on the bus from Peterborough to Toronto is $35, it would be irrational for the railroad to allow any passenger to ride for less than $35.

Accepted Answer

A) True 
 B)False

Question 20

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

Accepted Answer

Efficiency is the property of society ge

Which of the following is an example of a firm with market power?

When does a rational decision maker take an action?

Suppose that the average income of an Egyptian is higher than the average income of a Namibian. What might you conclude?

What is an increase in the overall level of prices in an economy called?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

Which statement does NOT accurately describe the article "Risk, Reward and the Economics of the Criminal Mind"?

Stephen spends an hour studying instead of playing soccer with his friends. What is the opportunity cost to him of studying?

Which of the following would NOT be a result of laws that require firms to reduce pollution?

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

If Scotland is better than Ireland at producing whisky, but Ireland is better than Scotland at producing beer, what should happen?

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Russell has spent $10,000 purchasing and repairing a Land Rover Defender, which he expects to sell for $14,000. He discovers that he needs an additional repair, which will cost $4400. He can sell the Land Rover Defender as it is now for $3600. What should he do?

Which statement best describes the concept represented by the adage "There is no such thing as a free lunch"?

What does the term "market failure" refer to?

According to economists, what do people respond to?

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

What is NOT included in the decisions that every society must make?

If the average cost of transporting a passenger on the bus from Peterborough to Toronto is $35, it would be irrational for the railroad to allow any passenger to ride for less than $35.

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

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 Policy on Aggregate Demand

The Influence of 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

Which of the following is an example of a firm with market power?

When does a rational decision maker take an action?

Suppose that the average income of an Egyptian is higher than the average income of a Namibian. What might you conclude?

What is an increase in the overall level of prices in an economy called?

A donut shop sells fresh baked donuts from 5 a.m. until 3 p.m. every day but Sunday. The cost of making and selling a dozen glazed donuts is $2.00. Because this shop does not sell day-old donuts the next day, what should the manager do if she still has ten dozen left at 2:30 p.m.?

Which statement does NOT accurately describe the article "Risk, Reward and the Economics of the Criminal Mind"?

Stephen spends an hour studying instead of playing soccer with his friends. What is the opportunity cost to him of studying?

Which of the following would NOT be a result of laws that require firms to reduce pollution?

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

If Scotland is better than Ireland at producing whisky, but Ireland is better than Scotland at producing beer, what should happen?

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Russell has spent $10,000 purchasing and repairing a Land Rover Defender, which he expects to sell for $14,000. He discovers that he needs an additional repair, which will cost $4400. He can sell the Land Rover Defender as it is now for $3600. What should he do?

Which statement best describes the concept represented by the adage "There is no such thing as a free lunch"?

What does the term "market failure" refer to?

According to economists, what do people respond to?

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

What is NOT included in the decisions that every society must make?

If the average cost of transporting a passenger on the bus from Peterborough to Toronto is $35, it would be irrational for the railroad to allow any passenger to ride for less than $35.

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

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 Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters