Question 1

Comparison of economic systems indicates that

Accepted Answer

A) capitalist economies are clearly superior in distributing income. 
B) all countries have largely traditional economies. 
C) most nations have either a purely socialist economy or a purely capitalist economy. 
D) socialist economies are clearly superior in producing consumer goods. 
E) most countries have mixed economies. 
A) capitalist economies are clearly superior in distributing income. 
B) all countries have largely traditional economies. 
C) most nations have either a purely socialist economy or a purely capitalist economy. 
D) socialist economies are clearly superior in producing consumer goods. 
E) most countries have mixed economies.

Question 2

If a country's production possibilities boundary is drawn as a straight (downward- sloping)line it indicates

Accepted Answer

A) the use of the scarce resources in an economy. 
B) constant opportunity cost of producing more of either good. 
C) increasing opportunity cost of producing more of either good. 
D) decreasing opportunity cost of producing more of either good. 
E) an unfair distribution of resources in an economy. 
A) the use of the scarce resources in an economy. 
B) constant opportunity cost of producing more of either good. 
C) increasing opportunity cost of producing more of either good. 
D) decreasing opportunity cost of producing more of either good. 
E) an unfair distribution of resources in an economy.

Question 3

A point lying inside the production possibilities boundary is one at which

Accepted Answer

A) more output could be produced with existing resources. 
B) it is not possible to produce more output with existing resources. 
C) the economy has run out of resources. 
D) there is no scarcity. 
E) the opportunity cost of producing more output is negative. 
A) more output could be produced with existing resources. 
B) it is not possible to produce more output with existing resources. 
C) the economy has run out of resources. 
D) there is no scarcity. 
E) the opportunity cost of producing more output is negative.

Question 4

Because resources are scarce, individuals are required to

Accepted Answer

A) sacrifice production but not consumption. 
B) improve production but not distribution. 
C) use resources inefficiently. 
D) improve distribution but not production. 
E) make choices among alternatives. 
A) sacrifice production but not consumption. 
B) improve production but not distribution. 
C) use resources inefficiently. 
D) improve distribution but not production. 
E) make choices among alternatives.

Question 5

A move from inside the production possibilities boundary to the boundary itself could be caused by

Accepted Answer

A) an improvement in the government's ability to control its spending. 
B) technological progress. 
C) an increase in the labour supply. 
D) the employment of previously idle resources. 
E) a reallocation of resources from military to civilian goods. 
A) an improvement in the government's ability to control its spending. 
B) technological progress. 
C) an increase in the labour supply. 
D) the employment of previously idle resources. 
E) a reallocation of resources from military to civilian goods.

Question 6

Most modern economies in the world today

Accepted Answer

A) are similar to feudal systems. 
B) have pure market exchange. 
C) are mostly run by government decree. 
D) have a mix of traditional, command and market elements. 
E) are complex systems that defy description and analysis. 
A) are similar to feudal systems. 
B) have pure market exchange. 
C) are mostly run by government decree. 
D) have a mix of traditional, command and market elements. 
E) are complex systems that defy description and analysis.

Question 7

A farmer selling tomatoes and corn at a roadside, and a currency trader in Hong Kong, are each participating in

Accepted Answer

A) international trade. 
B) an involuntary transaction. 
C) flexible manufacturing. 
D) barter. 
E) a market. 
A) international trade. 
B) an involuntary transaction. 
C) flexible manufacturing. 
D) barter. 
E) a market.

Question 8

Economics is generally NOT concerned with

Accepted Answer

A) restricting the level of human wants. 
B) the distribution of income among households. 
C) the concept of opportunity cost. 
D) the rate of growth of productive capacity. 
E) the allocation of resources among alternative uses. 
A) restricting the level of human wants. 
B) the distribution of income among households. 
C) the concept of opportunity cost. 
D) the rate of growth of productive capacity. 
E) the allocation of resources among alternative uses.

Question 9

Suppose fire destroy many millions of hectares of valuable Canadian forest. The effect on the Canadian economy would be best illustrated by _ the production possibilities boundary.

Accepted Answer

A) a shift outward of 
B) a movement to a point beyond 
C) a movement inside 
D) an inward shift of 
E) a movement along 
A) a shift outward of 
B) a movement to a point beyond 
C) a movement inside 
D) an inward shift of 
E) a movement along

Question 10

Behaviour in free- market economies is

Accepted Answer

A) determined by a central authority. 
B) based primarily on custom and habit. 
C) random and unpredictable. 
D) mostly affected by elements of tradition and government command. 
E) mostly directed by self interest. 
A) determined by a central authority. 
B) based primarily on custom and habit. 
C) random and unpredictable. 
D) mostly affected by elements of tradition and government command. 
E) mostly directed by self interest.

Question 11

Which of the point(s)below is (are)true of money? i)Money eliminated the need for barter.
Ii)Money allowed for specialization of labour and expansion of trade.
Iii)Money allowed for the development of a market economy.
Iv)Money allowed one to save current production for future use.

Accepted Answer

A) Only i). 
B) Only i)and ii). 
C) Only i)and iv). 
D) Only i), ii), and iv). 
E) All of the points are true. 
A) Only i). 
B) Only i)and ii). 
C) Only i)and iv). 
D) Only i), ii), and iv). 
E) All of the points are true.

Question 12

The opportunity cost of producing good A is defined to be

Accepted Answer

A) the cost of having to get by using something else in place of good A. 
B) the money cost of the factors of production used in good A. 
C) what must be sacrificed of other goods to get an additional unit of good A. 
D) the cheapest method of producing good A. 
E) the retail price of good A. 
A) the cost of having to get by using something else in place of good A. 
B) the money cost of the factors of production used in good A. 
C) what must be sacrificed of other goods to get an additional unit of good A. 
D) the cheapest method of producing good A. 
E) the retail price of good A.

Question 13

In the Canadian economy, most decisions regarding resource allocation are made by

Accepted Answer

A) the various levels of government. 
B) consumers and producers interacting in the price system. 
C) legal contract. 
D) business firms only. 
E) negotiation between unions and firms. 
A) the various levels of government. 
B) consumers and producers interacting in the price system. 
C) legal contract. 
D) business firms only. 
E) negotiation between unions and firms.

Question 14

If some income earned by households is not spent on output, or if some income earned by firms is not spent on factor services, the circular flow of income will

Accepted Answer

A) contract. 
B) expand. 
C) run over. 
D) stop. 
E) explode. 
A) contract. 
B) expand. 
C) run over. 
D) stop. 
E) explode.

Question 15

If there is always a three- for- one trade- off between the production of goods X and Y, then the production possibilities boundary for X and Y is

Accepted Answer

A) a downward- sloping straight line. 
B) a downward- sloping curve convex to the origin. 
C) a downward- sloping curve concave to the origin. 
D) semi- circular. 
E) a downward- sloping straight line that is broken at one point. 
A) a downward- sloping straight line. 
B) a downward- sloping curve convex to the origin. 
C) a downward- sloping curve concave to the origin. 
D) semi- circular. 
E) a downward- sloping straight line that is broken at one point.

Question 16

A straight- line production possibilities boundary differs from a concave boundary in which of the following ways?

Accepted Answer

A) The concave boundary illustrates constant opportunity costs, whereas the straight- line boundary illustrates decreasing opportunity costs. 
B) The straight- line boundary illustrates constant opportunity costs, whereas the concave boundary illustrates increasing opportunity costs. 
C) A straight- line boundary is associated with a command economy, whereas a concave boundary is associated with a free- market economy. 
D) The straight- line boundary does not show scarcity, whereas the concave boundary does. 
E) The straight- line boundary shows opportunity cost, whereas the concave boundary does not. 
A) The concave boundary illustrates constant opportunity costs, whereas the straight- line boundary illustrates decreasing opportunity costs. 
B) The straight- line boundary illustrates constant opportunity costs, whereas the concave boundary illustrates increasing opportunity costs. 
C) A straight- line boundary is associated with a command economy, whereas a concave boundary is associated with a free- market economy. 
D) The straight- line boundary does not show scarcity, whereas the concave boundary does. 
E) The straight- line boundary shows opportunity cost, whereas the concave boundary does not.

Question 17

An insight first fully developed by Adam Smith is that

Accepted Answer

A) all individuals are motivated solely by self- interest. 
B) individual self- interest is the only necessary force for social order. 
C) self- interest, not benevolence, is the foundation of economic order. 
D) self- interest undermines effective economic order. 
E) without benevolence production would not occur. 
A) all individuals are motivated solely by self- interest. 
B) individual self- interest is the only necessary force for social order. 
C) self- interest, not benevolence, is the foundation of economic order. 
D) self- interest undermines effective economic order. 
E) without benevolence production would not occur.

Question 18

Consider a production possibilities boundary showing the possible combinations of military goods and civilian goods that a country can produce. Suppose that the country is currently at a point on the boundary. If the production of military goods is increased, the production of civilian goods will necessarily

Accepted Answer

A) remain the same. 
B) decrease. 
C) increase. 
D) increase at a decreasing rate. 
E) increase at a increasing rate. 
A) remain the same. 
B) decrease. 
C) increase. 
D) increase at a decreasing rate. 
E) increase at a increasing rate.

Question 19

Which countries have mostly public ownership of resources?

Accepted Answer

A) Brazil and Argentina 
B) Sweden and Norway 
C) Cuba and North Korea 
D) United States and Canada 
E) France and Germany 
A) Brazil and Argentina 
B) Sweden and Norway 
C) Cuba and North Korea 
D) United States and Canada 
E) France and Germany

Question 20

Complex economic plans for many economic sectors are most associated with a

Accepted Answer

A) feudal system. 
B) traditional economy. 
C) free- market system. 
D) command economy. 
E) mixed market system.. 
A) feudal system. 
B) traditional economy. 
C) free- market system. 
D) command economy. 
E) mixed market system..

Comparison of economic systems indicates that

If a country's production possibilities boundary is drawn as a straight (downward- sloping)line it indicates

A point lying inside the production possibilities boundary is one at which

Because resources are scarce, individuals are required to

A move from inside the production possibilities boundary to the boundary itself could be caused by

Most modern economies in the world today

A farmer selling tomatoes and corn at a roadside, and a currency trader in Hong Kong, are each participating in

Economics is generally NOT concerned with

Suppose fire destroy many millions of hectares of valuable Canadian forest. The effect on the Canadian economy would be best illustrated by _ the production possibilities boundary.

Behaviour in free- market economies is

Which of the point(s)below is (are)true of money? i)Money eliminated the need for barter. Ii)Money allowed for specialization of labour and expansion of trade. Iii)Money allowed for the development of a market economy. Iv)Money allowed one to save current production for future use.

The opportunity cost of producing good A is defined to be

In the Canadian economy, most decisions regarding resource allocation are made by

If some income earned by households is not spent on output, or if some income earned by firms is not spent on factor services, the circular flow of income will

If there is always a three- for- one trade- off between the production of goods X and Y, then the production possibilities boundary for X and Y is

A straight- line production possibilities boundary differs from a concave boundary in which of the following ways?

An insight first fully developed by Adam Smith is that

Which countries have mostly public ownership of resources?

Complex economic plans for many economic sectors are most associated with a

Economic Theories, Data, and Graphs

Demand, Supply, and Price

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

The Difference Between Short-Run and Long-Run Macroeconomics

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

Exam 1: Economic Issues and Concepts

Comparison of economic systems indicates that

If a country's production possibilities boundary is drawn as a straight (downward- sloping)line it indicates

A point lying inside the production possibilities boundary is one at which

Because resources are scarce, individuals are required to

A move from inside the production possibilities boundary to the boundary itself could be caused by

Most modern economies in the world today

A farmer selling tomatoes and corn at a roadside, and a currency trader in Hong Kong, are each participating in

Economics is generally NOT concerned with

Suppose fire destroy many millions of hectares of valuable Canadian forest. The effect on the Canadian economy would be best illustrated by _ the production possibilities boundary.

Behaviour in free- market economies is

Which of the point(s)below is (are)true of money? i)Money eliminated the need for barter. Ii)Money allowed for specialization of labour and expansion of trade. Iii)Money allowed for the development of a market economy. Iv)Money allowed one to save current production for future use.

The opportunity cost of producing good A is defined to be

In the Canadian economy, most decisions regarding resource allocation are made by

If some income earned by households is not spent on output, or if some income earned by firms is not spent on factor services, the circular flow of income will

If there is always a three- for- one trade- off between the production of goods X and Y, then the production possibilities boundary for X and Y is

A straight- line production possibilities boundary differs from a concave boundary in which of the following ways?

An insight first fully developed by Adam Smith is that

Which countries have mostly public ownership of resources?

Complex economic plans for many economic sectors are most associated with a

Economic Theories, Data, and Graphs

Demand, Supply, and Price

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

The Difference Between Short-Run and Long-Run Macroeconomics

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