Question 1

When an economist says that material wants are insatiable, this means that:

Accepted Answer

A) economic resources are valuable only because they can be used to produce consumer goods. 
B) economic resources-land, labour, capital, and entrepreneurial ability-are scarce. 
C) these wants are virtually unlimited and therefore incapable of complete satisfaction. 
D) the structure of consumer demand varies from time to time and from country to country. 
A) economic resources are valuable only because they can be used to produce consumer goods. 
B) economic resources-land, labour, capital, and entrepreneurial ability-are scarce. 
C) these wants are virtually unlimited and therefore incapable of complete satisfaction. 
D) the structure of consumer demand varies from time to time and from country to country. C

Question 2

Individuals face an economic problem but society does not.

Accepted Answer

A) True 
 B)False  False

Question 3

Refer to the graph.The movement from line A to line A' represents a change in:

Accepted Answer

A) the slope only. 
B) the intercept only. 
C) both the slope and the intercept. 
D) neither the slope nor the intercept. 
A) the slope only. 
B) the intercept only. 
C) both the slope and the intercept. 
D) neither the slope nor the intercept. B

Question 4

Refer to the above diagram for athletic shoes.The optimal output of shoes:

Accepted Answer

A) is Q1. 
B) is Q2. 
C) is Q3. 
D) is greater than Q3. 
A) is Q1. 
B) is Q2. 
C) is Q3. 
D) is greater than Q3.

Question 5

Recessions are typically characterised by points:

Accepted Answer

A) inside the production possibilities curve. 
B) outside the production possibilities curve. 
C) on the production possibilities curve. 
D) that are not attainable on the production possibilities curve. 
A) inside the production possibilities curve. 
B) outside the production possibilities curve. 
C) on the production possibilities curve. 
D) that are not attainable on the production possibilities curve.

Question 6

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 7

Refer to the diagram below.This production possibilities curve is constructed such that:

Accepted Answer

A) resources are presumed to be perfectly shiftable between bread and tractors. 
B) the opportunity cost of bread diminishes as more bread is produced. 
C) the opportunity cost of tractors diminishes as more bread is produced. 
D) the opportunity cost of both bread and tractors in terms of each other increases as more of each is produced. 
A) resources are presumed to be perfectly shiftable between bread and tractors. 
B) the opportunity cost of bread diminishes as more bread is produced. 
C) the opportunity cost of tractors diminishes as more bread is produced. 
D) the opportunity cost of both bread and tractors in terms of each other increases as more of each is produced.

Question 8

If price (P) and quantity (Q) are directly related, this means that:

Accepted Answer

A) a change in Q will alter P, but a change in P will not alter Q. 
B) if P increases, Q will decrease. 
C) if P increases, Q will also increase. 
D) an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted. 
A) a change in Q will alter P, but a change in P will not alter Q. 
B) if P increases, Q will decrease. 
C) if P increases, Q will also increase. 
D) an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted.

Question 9

The production possibilities curve is bowed out from the origin because:

Accepted Answer

A) marginal benefits are equal. 
B) marginal benefits decrease. 
C) marginal benefits are unpredictable. 
D) marginal benefits decrease and then increase in value. 
A) marginal benefits are equal. 
B) marginal benefits decrease. 
C) marginal benefits are unpredictable. 
D) marginal benefits decrease and then increase in value.

Question 10

Which of the following is a microeconomic statement?

Accepted Answer

A) The real domestic output increased by 2.5 percent last year. 
B) Unemployment was 8.3 percent of the labour force last year. 
C) The price of personal computers declined last year. 
D) The general price level increased by 4 percent last year. 
A) The real domestic output increased by 2.5 percent last year. 
B) Unemployment was 8.3 percent of the labour force last year. 
C) The price of personal computers declined last year. 
D) The general price level increased by 4 percent last year.

Question 11

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Accepted Answer

A) attainable, but too costly. 
B) unattainable, given currently available resources and technology. 
C) attainable, but involves unemployment. 
D) irrelevant because it is inconsistent with consumer preferences. 
A) attainable, but too costly. 
B) unattainable, given currently available resources and technology. 
C) attainable, but involves unemployment. 
D) irrelevant because it is inconsistent with consumer preferences.

Question 12

Which of the following is associated with macroeconomics?

Accepted Answer

A) an examination of the incomes of the University of Toronto Business School graduates 
B) an empirical investigation of the general price level and unemployment rates in the 2000s 
C) a study of the trend of pecan prices since World War II 
D) a case study of pricing and production in the textbook industry 
A) an examination of the incomes of the University of Toronto Business School graduates 
B) an empirical investigation of the general price level and unemployment rates in the 2000s 
C) a study of the trend of pecan prices since World War II 
D) a case study of pricing and production in the textbook industry

Question 13

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

Accepted Answer

A) positive, but incorrect. 
B) positive and correct. 
C) normative, but incorrect. 
D) normative and correct. 
A) positive, but incorrect. 
B) positive and correct. 
C) normative, but incorrect. 
D) normative and correct.

Question 14

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A) Facing trade-offs 
B) Opportunity cost 
C) Choosing a little more or a little less 
D) The influence of incentives 
A) Facing trade-offs 
B) Opportunity cost 
C) Choosing a little more or a little less 
D) The influence of incentives

Question 15

Most of the disagreement among economists involves:

Accepted Answer

A) facts. 
B) theories. 
C) positive statements. 
D) normative statements. 
A) facts. 
B) theories. 
C) positive statements. 
D) normative statements.

Question 16

Which of the following is a positive statement?

Accepted Answer

A) The humidity is too high today. 
B) It is too hot to jog today. 
C) The temperature is 30 degrees today. 
D) I enjoy summer evenings when it cools off. 
A) The humidity is too high today. 
B) It is too hot to jog today. 
C) The temperature is 30 degrees today. 
D) I enjoy summer evenings when it cools off.

Question 17

The problems of aggregate inflation and unemployment are:

Accepted Answer

A) major topics of macroeconomics. 
B) not relevant to the Canadian economy. 
C) major topics of microeconomics. 
D) peculiar to socialistic economies. 
A) major topics of macroeconomics. 
B) not relevant to the Canadian economy. 
C) major topics of microeconomics. 
D) peculiar to socialistic economies.

Question 18

The measured slope of a line:

Accepted Answer

A) is independent of how the two variables are denominated. 
B) will be affected by how the two variables are denominated. 
C) necessarily diminishes as one moves rightward on the line. 
D) necessarily increases as one moves rightward on the line. 
A) is independent of how the two variables are denominated. 
B) will be affected by how the two variables are denominated. 
C) necessarily diminishes as one moves rightward on the line. 
D) necessarily increases as one moves rightward on the line.

Question 19

Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

Accepted Answer

A) cannot be realized because resources are fully employed. 
B) will cost 1 unit of computers. 
C) will cost 2 units of computers. 
D) will cause some resources to become unemployed. 
A) cannot be realized because resources are fully employed. 
B) will cost 1 unit of computers. 
C) will cost 2 units of computers. 
D) will cause some resources to become unemployed.

Question 20

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.   Refer to the above table.What is the total opportunity cost of producing two units of capital goods?

Accepted Answer

A) 4 units of consumer goods 
B) 5 units of consumer goods 
C) 9 units of consumer goods 
D) 13 units of consumer goods 
A) 4 units of consumer goods 
B) 5 units of consumer goods 
C) 9 units of consumer goods 
D) 13 units of consumer goods

Exam 1: B: Limits, Alternatives, and Choices

When an economist says that material wants are insatiable, this means that:

Individuals face an economic problem but society does not.

Refer to the graph.The movement from line A to line A' represents a change in:

Refer to the above diagram for athletic shoes.The optimal output of shoes:

Recessions are typically characterised by points:

Products and services are scarce because resources are scarce.

Refer to the diagram below.This production possibilities curve is constructed such that:

If price (P) and quantity (Q) are directly related, this means that:

The production possibilities curve is bowed out from the origin because:

Which of the following is a microeconomic statement?

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Which of the following is associated with macroeconomics?

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Most of the disagreement among economists involves:

Which of the following is a positive statement?

The problems of aggregate inflation and unemployment are:

The measured slope of a line:

Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the total opportunity cost of producing two units of capital goods?

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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