Question 1

Which of the following has most contributed to the globalization of the economy?

Accepted Answer

A) tariffs and trade barriers 
B) reductions in transportation and communication costs 
C) the decline in the relative importance of manufacturing 
D) the decreased importance of agriculture 
E) the shift toward a market economy in China 
A) tariffs and trade barriers 
B) reductions in transportation and communication costs 
C) the decline in the relative importance of manufacturing 
D) the decreased importance of agriculture 
E) the shift toward a market economy in China

Question 2

The use of money for transactions

Accepted Answer

A) makes specialization of labour more difficult. 
B) increases the use of barter. 
C) enables humanity to satisfy all wants. 
D) makes exchange easier and thus promotes the specialization of labour. 
E) fosters self- sufficiency. 
A) makes specialization of labour more difficult. 
B) increases the use of barter. 
C) enables humanity to satisfy all wants. 
D) makes exchange easier and thus promotes the specialization of labour. 
E) fosters self- sufficiency.

Question 3

Katie and Hugh are producing pies and jars of pickles. Katie can produce either 200 jars of pickles or 100 pies per month. Hugh can produce either 800 jars of pickles or 200 pies per month.

Accepted Answer

A) Katie's opportunity cost of producing 1 jar of pickles is 1/2 of a pie. 
B) Hugh's and Katie's opportunity costs of producing are the same. 
C) Katie's opportunity cost of producing 1 jar of pickles is 2 pies. 
D) Hugh's opportunity cost of producing 1 pie is 1/4 jar of pickles. 
E) Hugh's opportunity cost of producing 1 jar of pickles is 4 pies. 
A) Katie's opportunity cost of producing 1 jar of pickles is 1/2 of a pie. 
B) Hugh's and Katie's opportunity costs of producing are the same. 
C) Katie's opportunity cost of producing 1 jar of pickles is 2 pies. 
D) Hugh's opportunity cost of producing 1 pie is 1/4 jar of pickles. 
E) Hugh's opportunity cost of producing 1 jar of pickles is 4 pies.

Question 4

Specialization of labour led to greater efficiency in the allocation of resources because of

Accepted Answer

A) the principle of comparative advantage. 
B) an increase in total work effort. 
C) greater reliance on self- sufficiency. 
D) the use of barter. 
E) the opportunity cost of labour increased. 
A) the principle of comparative advantage. 
B) an increase in total work effort. 
C) greater reliance on self- sufficiency. 
D) the use of barter. 
E) the opportunity cost of labour increased.

Question 5

One of the "real" flows in the circular flow of income is

Accepted Answer

A) goods going from consumers to producers. 
B) goods going from producers to consumers. 
C) money payments going from consumers to producers. 
D) factor services going from producers to consumers. 
E) money payments going from producers to consumers. 
A) goods going from consumers to producers. 
B) goods going from producers to consumers. 
C) money payments going from consumers to producers. 
D) factor services going from producers to consumers. 
E) money payments going from producers to consumers.

Question 6

One of the major results of the greater specialization of labour is that

Accepted Answer

A) there is an increased need for government to intervene in the marketplace. 
B) there is a greater need for trade. 
C) the circular flow of income contracts. 
D) each worker must become more self- sufficient. 
E) the overall output of the economy declines. 
A) there is an increased need for government to intervene in the marketplace. 
B) there is a greater need for trade. 
C) the circular flow of income contracts. 
D) each worker must become more self- sufficient. 
E) the overall output of the economy declines.

Question 7

A country's production possibilities boundary shows that

Accepted Answer

A) when a society combines its resources efficiently, it cannot produce more of one good without producing less of the other good. 
B) the supply for goods always exceeds the demand. 
C) when a society combines its resources inefficiently, it cannot produce more of one good without producing less of the other good. 
D) when a society combines its resources efficiently, it is always possible to produce more of all goods. 
E) all points inside the boundary are preferred to all points on the boundary. 
A) when a society combines its resources efficiently, it cannot produce more of one good without producing less of the other good. 
B) the supply for goods always exceeds the demand. 
C) when a society combines its resources inefficiently, it cannot produce more of one good without producing less of the other good. 
D) when a society combines its resources efficiently, it is always possible to produce more of all goods. 
E) all points inside the boundary are preferred to all points on the boundary.

Question 8

Labour services are bought and sold in a

Accepted Answer

A) foreign exchange market. 
B) mixed market. 
C) product market. 
D) factor market. 
E) goods market. 
A) foreign exchange market. 
B) mixed market. 
C) product market. 
D) factor market. 
E) goods market.

Question 9

Suppose there are three alternatives to attending a social event: read a novel (you value this at $10), go to work (you could earn $20), or watch videos with some friends (you value this at $25). The opportunity cost of attending the social event is

Accepted Answer

A) $45. 
B) $20. 
C) $10. 
D) zero. 
E) $25. 
A) $45. 
B) $20. 
C) $10. 
D) zero. 
E) $25.

Question 10

In mixed economies, economic behaviour is

Accepted Answer

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

Question 11

The famous economist who developed the idea of the division of labour was

Accepted Answer

A) Adam Smith. 
B) David Ricardo. 
C) Milton Friedman. 
D) Karl Marx. 
E) John Maynard Keynes. 
A) Adam Smith. 
B) David Ricardo. 
C) Milton Friedman. 
D) Karl Marx. 
E) John Maynard Keynes.

Question 12

Consider the following list: a worker with training in video gaming technology, 10 hectares of arable land in southern Ontario, a fishing trawler in Nova Scotia, an ice- cream truck at a park in Quebec. Each of these is an example of

Accepted Answer

A) an economic service. 
B) a capital resource. 
C) a commodity. 
D) goods and services. 
E) a factor of production. 
A) an economic service. 
B) a capital resource. 
C) a commodity. 
D) goods and services. 
E) a factor of production.

Question 13

In the current Canadian economy, the majority of choices on how resources are allocated are made by

Accepted Answer

A) legal contracts. 
B) the various levels of government. 
C) consumers and firms through the price system. 
D) negotiation between unions and firms. 
E) business firms only. 
A) legal contracts. 
B) the various levels of government. 
C) consumers and firms through the price system. 
D) negotiation between unions and firms. 
E) business firms only.

Question 14

Money facilitates trade and specialization by

Accepted Answer

A) increasing the value of gold. 
B) eliminating the need for barter. 
C) reducing the shift of resources between uses. 
D) providing employment for coin makers. 
E) increasing investment. 
A) increasing the value of gold. 
B) eliminating the need for barter. 
C) reducing the shift of resources between uses. 
D) providing employment for coin makers. 
E) increasing investment.

Question 15

Katie and Hugh are producing pies and jars of pickles. Katie can produce either 200 jars of pickles or 100 pies per month. Hugh can produce either 800 jars of pickles or 200 pies per month. Currently, each divide their time equally between production of the two goods per month -- Katie produces 100 jars of pickles and 50 pies while Hugh produces 400 jars of pickles and 100 pies. In order for Katie and Hugh to jointly gain from specialization, which of the following changes should take place?

Accepted Answer

A) Hugh should produce more pies and fewer jars of pickles. 
B) Katie should produce more pies and fewer jars of pickles. 
C) Katie and Hugh should both produce more pies and fewer jars of pickles. 
D) Katie and Hugh should both produce more jars of pickles and fewer pies. 
E) Katie should produce more jars of pickles and fewer pies. 
A) Hugh should produce more pies and fewer jars of pickles. 
B) Katie should produce more pies and fewer jars of pickles. 
C) Katie and Hugh should both produce more pies and fewer jars of pickles. 
D) Katie and Hugh should both produce more jars of pickles and fewer pies. 
E) Katie should produce more jars of pickles and fewer pies.

Question 16

Suppose there are only two goods produced in our economy-snowplows and helicopters. If there is always a two- for- one tradeoff between the production of these two goods (in terms of opportunity cost), then the production possibilities boundary between snowplows and helicopters is

Accepted Answer

A) circular. 
B) a downward- sloping straight line. 
C) a downward- sloping curve convex to the origin. 
D) a downward- sloping straight line with slope equal to - 1. 
E) a downward- sloping curve concave to the origin. 
A) circular. 
B) a downward- sloping straight line. 
C) a downward- sloping curve convex to the origin. 
D) a downward- sloping straight line with slope equal to - 1. 
E) a downward- sloping curve concave to the origin.

Which of the following has most contributed to the globalization of the economy?

The use of money for transactions

Katie and Hugh are producing pies and jars of pickles. Katie can produce either 200 jars of pickles or 100 pies per month. Hugh can produce either 800 jars of pickles or 200 pies per month.

Specialization of labour led to greater efficiency in the allocation of resources because of

One of the "real" flows in the circular flow of income is

One of the major results of the greater specialization of labour is that

A country's production possibilities boundary shows that

Labour services are bought and sold in a

Suppose there are three alternatives to attending a social event: read a novel (you value this at $10), go to work (you could earn $20), or watch videos with some friends (you value this at $25). The opportunity cost of attending the social event is

In mixed economies, economic behaviour is

The famous economist who developed the idea of the division of labour was

Consider the following list: a worker with training in video gaming technology, 10 hectares of arable land in southern Ontario, a fishing trawler in Nova Scotia, an ice- cream truck at a park in Quebec. Each of these is an example of

In the current Canadian economy, the majority of choices on how resources are allocated are made by

Money facilitates trade and specialization by

Suppose there are only two goods produced in our economy-snowplows and helicopters. If there is always a two- for- one tradeoff between the production of these two goods (in terms of opportunity cost), then the production possibilities boundary between snowplows and helicopters is

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

Which of the following has most contributed to the globalization of the economy?

The use of money for transactions

Katie and Hugh are producing pies and jars of pickles. Katie can produce either 200 jars of pickles or 100 pies per month. Hugh can produce either 800 jars of pickles or 200 pies per month.

Specialization of labour led to greater efficiency in the allocation of resources because of

One of the "real" flows in the circular flow of income is

One of the major results of the greater specialization of labour is that

A country's production possibilities boundary shows that

Labour services are bought and sold in a

Suppose there are three alternatives to attending a social event: read a novel (you value this at $10), go to work (you could earn $20), or watch videos with some friends (you value this at $25). The opportunity cost of attending the social event is

In mixed economies, economic behaviour is

The famous economist who developed the idea of the division of labour was

Consider the following list: a worker with training in video gaming technology, 10 hectares of arable land in southern Ontario, a fishing trawler in Nova Scotia, an ice- cream truck at a park in Quebec. Each of these is an example of

In the current Canadian economy, the majority of choices on how resources are allocated are made by

Money facilitates trade and specialization by

Suppose there are only two goods produced in our economy-snowplows and helicopters. If there is always a two- for- one tradeoff between the production of these two goods (in terms of opportunity cost), then the production possibilities boundary between snowplows and helicopters is

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