Question 1

When considering how a familyʹs level of consumption changes in response to changes in its income,

Accepted Answer

A)  income is the dependent variable and family consumption is the independent variable. 
B)  consumption is the dependent variable and income is the independent variable. 
C)  both of the variables are independent. 
D)  both of the variables are dependent. 
E)  there is no relationship between the variables. 
A)  income is the dependent variable and family consumption is the independent variable. 
B)  consumption is the dependent variable and income is the independent variable. 
C)  both of the variables are independent. 
D)  both of the variables are dependent. 
E)  there is no relationship between the variables.

Question 2

The table below shows the approximate value of Canadaʹs crude oil and natural gas exports over a 5 -year period. The amounts shown are billions of dollars.   TABLE 2-7
-Refer to Table 2-7. Assume that 2009 is the base year, with an index number = 100. What is the percentage change in the value of exports of natural gas from 2009 to 2013?

Accepted Answer

A)  71 
B)  -71% 
C)  71% 
D)  29% 
E)  -29% 
A)  71 
B)  -71% 
C)  71% 
D)  29% 
E)  -29%

Question 3

FIGURE 2-4
-Refer to Figure 2-4. The functional relation shown between fertilizer applied and wheat yield can be described as a

Accepted Answer

A)  constant marginal response. 
B)  increasing partial response. 
C)  decreasing total response. 
D)  diminishing marginal response. 
E)  increasing marginal response. 
A)  constant marginal response. 
B)  increasing partial response. 
C)  decreasing total response. 
D)  diminishing marginal response. 
E)  increasing marginal response.

Question 4

The slope of a curve is

Accepted Answer

A)  always positive. 
B)  always negative. 
C)  positive if the curve rises to the right. 
D)  negative if the curve rises to the right. 
E)  always constant. 
A)  always positive. 
B)  always negative. 
C)  positive if the curve rises to the right. 
D)  negative if the curve rises to the right. 
E)  always constant.

Question 5

On a coordinate graph with y on the vertical axis and x on the horizontal axis, suppose point A represents coordinates X = 2, Y = 12) and point B represents coordinates X = 6, Y = 4). The slope of the straight line joining points A and B is

Accepted Answer

A)  5. 
B)  - 1 . 2 
C)  1 . 2 
D)  -2. 
E)  2. 
A)  5. 
B)  - 1 . 2 
C)  1 . 2 
D)  -2. 
E)  2.

Question 6

The base year for an index number is

Accepted Answer

A)  determined by the year the variable equals exactly 100. 
B)  dependant upon the type of data. 
C)  declared by the federal government. 
D)  chosen arbitrarily by those who construct the data. 
E)  the year in which 2 or more index numbers are equal to 100. 
A)  determined by the year the variable equals exactly 100. 
B)  dependant upon the type of data. 
C)  declared by the federal government. 
D)  chosen arbitrarily by those who construct the data. 
E)  the year in which 2 or more index numbers are equal to 100.

Question 7

Of the following, which is the most important characteristic of a successful theory?

Accepted Answer

A)  the theory provides a basis for facts about economic behaviour 
B)  the theory could never be refuted 
C)  the theory adequately explains all economic behaviour 
D)  all assumptions on which the theory is based are true 
E)  the theory allows us to predict behaviour reasonably accurately 
A)  the theory provides a basis for facts about economic behaviour 
B)  the theory could never be refuted 
C)  the theory adequately explains all economic behaviour 
D)  all assumptions on which the theory is based are true 
E)  the theory allows us to predict behaviour reasonably accurately

Question 8

Choose the statement that best characterizes an economic theory. A valid theory

Accepted Answer

A)  allows one to deduce a normative statement. 
B)  appeals to the law of large numbers. 
C)  generates a hypothesis that can predict future events. 
D)  extrapolates from the past behaviour of a variable to predict its future course. 
E)  allows one to prove irrefutably oneʹs hypothesis. 
A)  allows one to deduce a normative statement. 
B)  appeals to the law of large numbers. 
C)  generates a hypothesis that can predict future events. 
D)  extrapolates from the past behaviour of a variable to predict its future course. 
E)  allows one to prove irrefutably oneʹs hypothesis.

Question 9

The table below shows the approximate value of Canadaʹs crude oil and natural gas exports over a 5 -year period. The amounts shown are billions of dollars.   TABLE 2-7
-Refer to Table 2-7. Assume that 2009 is the base year, with an index number = 100. What is the percentage change in the value of exports of crude oil from 2009 to 2013?

Accepted Answer

A)  90.6% 
B)  190.6% 
C)  100% 
D)  96% 
E)  0.906% 
A)  90.6% 
B)  190.6% 
C)  100% 
D)  96% 
E)  0.906%

Question 10

Which of the following statements belongs more properly in the field of normative economics than positive economics?

Accepted Answer

A)  An increase in the minimum wage leads to more unemployment. 
B)  The price of one Canadian dollar is $0.85 U.S. 
C)  When a drought occurs, the price of vegetables tends to rise. 
D)  Canadian governments should provide assistance to the auto industry. 
E)  Technological change has reduced the cost of cell phone service. 
A)  An increase in the minimum wage leads to more unemployment. 
B)  The price of one Canadian dollar is $0.85 U.S. 
C)  When a drought occurs, the price of vegetables tends to rise. 
D)  Canadian governments should provide assistance to the auto industry. 
E)  Technological change has reduced the cost of cell phone service.

Question 11

The table below shows the approximate value of Canadaʹs crude oil and natural gas exports over a 5 -year period. The amounts shown are billions of dollars.   TABLE 2-7
-Refer to Table 2-7. Assume that 2009 is the base year, with an index number = 100. What is the percentage change in the value of exports of crude oil from 2012 to 2013?

Accepted Answer

A)  8.0% 
B)  10.96% 
C)  -8.0% 
D)  9.9% 
E)  -9.9% 
A)  8.0% 
B)  10.96% 
C)  -8.0% 
D)  9.9% 
E)  -9.9%

Question 12

The table below shows hypothetical prices for a particular anatomy textbook at a university bookstore over several years.   TABLE 2-4
-Refer to Table 2-4. Assume that 2012 is used as the base year, with the index number = 100. The value of the index number in 2014 is

Accepted Answer

A)  0.878. 
B)  1.0. 
C)  1.139. 
D)  87.8. 
E)  113.9. 
A)  0.878. 
B)  1.0. 
C)  1.139. 
D)  87.8. 
E)  113.9.

Question 13

The table below shows hypothetical data for the volume of gold and nickel output across several years.   TABLE 2-5
-Refer to Table 2-5. What is the index number for nickel output in Year 2?

Accepted Answer

A)  98.4% 
B)  98.4 
C)  -72.0% 
D)  72.0% 
E)  0.984% 
A)  98.4% 
B)  98.4 
C)  -72.0% 
D)  72.0% 
E)  0.984%

Question 14

An economic model that contains a highly realistic set of assumptions is

Accepted Answer

A)  useful because there is then very little difference between ʺtheoryʺ and ʺreality.ʺ 
B)  necessarily better able to predict the future. 
C)  certainly superior to a model whose assumptions are highly unrealistic. 
D)  more abstract than a model whose assumptions are further removed from reality. 
E)  not likely to be useful because of its particularized nature and its complexity. 
A)  useful because there is then very little difference between ʺtheoryʺ and ʺreality.ʺ 
B)  necessarily better able to predict the future. 
C)  certainly superior to a model whose assumptions are highly unrealistic. 
D)  more abstract than a model whose assumptions are further removed from reality. 
E)  not likely to be useful because of its particularized nature and its complexity.

Question 15

FIGURE 2-2
-Refer to Figure 2-2. The slope of curve B is

Accepted Answer

A)  positive and constant. 
B)  negative and constant. 
C)  positive and changing. 
D)  negative and changing. 
E)  undefined. 
A)  positive and constant. 
B)  negative and constant. 
C)  positive and changing. 
D)  negative and changing. 
E)  undefined.

Question 16

For a given year, an index number of average prices across the economy in Canada, the Consumer Price Index) is the ratio of the

Accepted Answer

A)  price of several goods in the given year to that in the base year. 
B)  simple average price of all goods in the given year to that in the base year. 
C)  average price of several goods in the base year to that in the given year. 
D)  weighted prices of a typical bundle of goods purchased in a given year to that in the base year. 
E)  weighted prices of a typical bundle of goods purchased in the base year to that in the given year. 
A)  price of several goods in the given year to that in the base year. 
B)  simple average price of all goods in the given year to that in the base year. 
C)  average price of several goods in the base year to that in the given year. 
D)  weighted prices of a typical bundle of goods purchased in a given year to that in the base year. 
E)  weighted prices of a typical bundle of goods purchased in the base year to that in the given year.

Question 17

Suppose an economist tells you that the unemployment rate in Canada last year was 7.8%. This is an example
Of an) statement.

Accepted Answer

A)  autonomous 
B)  positive 
C)  normative 
D)  induced 
E)  imputed 
A)  autonomous 
B)  positive 
C)  normative 
D)  induced 
E)  imputed

Question 18

When an economist assumes that the owners of firms are motivated only by the desire to maximize profits, the economist most likely believes that

Accepted Answer

A)  it doesnʹt matter whether or not the assumption is descriptively accurate; what matters is whether a theory built on the assumption predicts well. 
B)  the assumption is descriptively accurate, since surveys have been taken and the owners of firms have admitted that their only objective is to maximize profits. 
C)  the assumption is inaccurate, since surveys have been taken and the owners of firms have admitted that they care about more than just profits. 
D)  individuals entering business are quite narrow in their personal objectives. 
E)  all people enter business for their own selfish gain. 
A)  it doesnʹt matter whether or not the assumption is descriptively accurate; what matters is whether a theory built on the assumption predicts well. 
B)  the assumption is descriptively accurate, since surveys have been taken and the owners of firms have admitted that their only objective is to maximize profits. 
C)  the assumption is inaccurate, since surveys have been taken and the owners of firms have admitted that they care about more than just profits. 
D)  individuals entering business are quite narrow in their personal objectives. 
E)  all people enter business for their own selfish gain.

Question 19

The table below shows hypothetical data for volumes of e-books and hardcover books sold over a 3-year period in a particular city.   TABLE 2-3
-Refer to Table 2-3. Between Year 1 and Year 3, what is the percentage change in sales of hardcover books?

Accepted Answer

A)  0.569% 
B)  56.9% 
C)  -56.9% 
D)  -0.569% 
E)  -569% 
A)  0.569% 
B)  56.9% 
C)  -56.9% 
D)  -0.569% 
E)  -569%

Question 20

FIGURE 2-2
-Refer to Figure 2-2. The slope of curve D is

Accepted Answer

A)  positive and constant. 
B)  negative and constant. 
C)  positive and changing. 
D)  negative and changing. 
E)  undefined. 
A)  positive and constant. 
B)  negative and constant. 
C)  positive and changing. 
D)  negative and changing. 
E)  undefined.

Exam 2: Economic Theories, Data, and Graphs

When considering how a familyʹs level of consumption changes in response to changes in its income,

FIGURE 2-4 -Refer to Figure 2-4. The functional relation shown between fertilizer applied and wheat yield can be described as a

The slope of a curve is

On a coordinate graph with y on the vertical axis and x on the horizontal axis, suppose point A represents coordinates X = 2, Y = 12) and point B represents coordinates X = 6, Y = 4). The slope of the straight line joining points A and B is

The base year for an index number is

Of the following, which is the most important characteristic of a successful theory?

Choose the statement that best characterizes an economic theory. A valid theory

Which of the following statements belongs more properly in the field of normative economics than positive economics?

The table below shows hypothetical prices for a particular anatomy textbook at a university bookstore over several years. TABLE 2-4 -Refer to Table 2-4. Assume that 2012 is used as the base year, with the index number = 100. The value of the index number in 2014 is

The table below shows hypothetical data for the volume of gold and nickel output across several years. TABLE 2-5 -Refer to Table 2-5. What is the index number for nickel output in Year 2?

An economic model that contains a highly realistic set of assumptions is

FIGURE 2-2 -Refer to Figure 2-2. The slope of curve B is

For a given year, an index number of average prices across the economy in Canada, the Consumer Price Index) is the ratio of the

Suppose an economist tells you that the unemployment rate in Canada last year was 7.8%. This is an example Of an) statement.

When an economist assumes that the owners of firms are motivated only by the desire to maximize profits, the economist most likely believes that

The table below shows hypothetical data for volumes of e-books and hardcover books sold over a 3-year period in a particular city. TABLE 2-3 -Refer to Table 2-3. Between Year 1 and Year 3, what is the percentage change in sales of hardcover books?

FIGURE 2-2 -Refer to Figure 2-2. The slope of curve D is

Economic Issues and Concepts

Demand, Supply, and Price

Elasticity

Price Controls and Market Efficiency

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, Cartels, and Price Discrimination

Imperfect Competition and Strategic Behaviour

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets and Income Inequality

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

What Macroeconomics Is All About

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Output and Prices in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, Interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters