Question 1

Refer to the above diagram for athletic shoes.If the current output of shoes is Q3, then:

Accepted Answer

A) resources are being allocated efficiently to the production of shoes. 
B) society would consider additional units of shoes to be more valuable than alternative products. 
C) society would consider additional units of shoes to be less valuable than alternative products. 
D) society would experience a net gain by producing more shoes. 
A) resources are being allocated efficiently to the production of shoes. 
B) society would consider additional units of shoes to be more valuable than alternative products. 
C) society would consider additional units of shoes to be less valuable than alternative products. 
D) society would experience a net gain by producing more shoes.

Question 2

The production possibilities curve represents which of the following?

Accepted Answer

A) the amount of goods attainable with variable resources 
B) the maximum amount of goods attainable with variable resources 
C) maximum combinations of goods attainable with fixed resources 
D) the amount of goods attainable if prices decline 
A) the amount of goods attainable with variable resources 
B) the maximum amount of goods attainable with variable resources 
C) maximum combinations of goods attainable with fixed resources 
D) the amount of goods attainable if prices decline

Question 3

The slope of a line parallel to the vertical axis is:

Accepted Answer

A) zero. 
B) one. 
C) infinite. 
D) one-half. 
A) zero. 
B) one. 
C) infinite. 
D) one-half.

Question 4

Refer to the above production possibilities curve.At the onset of World War II the Soviet Union's economy was already at full employment.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Accepted Answer

A) c to point b. 
B) b to point c. 
C) a to point b. 
D) c to point d. 
A) c to point b. 
B) b to point c. 
C) a to point b. 
D) c to point d.

Question 5

Refer to the above diagram.This production possibilities curve is:

Accepted Answer

A) convex to the origin because opportunity costs are constant. 
B) linear because opportunity costs are constant. 
C) concave to the origin because of increasing opportunity costs. 
D) convex to the origin because of increasing opportunity costs. 
A) convex to the origin because opportunity costs are constant. 
B) linear because opportunity costs are constant. 
C) concave to the origin because of increasing opportunity costs. 
D) convex to the origin because of increasing opportunity costs.

Question 6

If the production possibilities curve is a straight line:

Accepted Answer

A) the two products will sell at the same market prices. 
B) economic resources are perfectly shiftable between the production of the two products. 
C) the two products are equally important to consumers. 
D) equal quantities of the two products will be produced at each possible point on the curve. 
A) the two products will sell at the same market prices. 
B) economic resources are perfectly shiftable between the production of the two products. 
C) the two products are equally important to consumers. 
D) equal quantities of the two products will be produced at each possible point on the curve.

Question 7

A normative statement is one which:

Accepted Answer

A) is based on the law of averages. 
B) pertains only to microeconomics. 
C) pertains only to macroeconomics. 
D) is based upon value judgments. 
A) is based on the law of averages. 
B) pertains only to microeconomics. 
C) pertains only to macroeconomics. 
D) is based upon value judgments.

Question 8

Of the countries listed in Image 1.1 Which of the following positions did Canada occupy with regard to average income in 2015?

Accepted Answer

A) First 
B) Fourth 
C) Ninth 
D) Twelfth 
A) First 
B) Fourth 
C) Ninth 
D) Twelfth

Question 9

Concern about the general level of prices in an economy is primarily a concern about the economic goal of:

Accepted Answer

A) economic efficiency. 
B) economic security. 
C) price-level stability. 
D) equity. 
A) economic efficiency. 
B) economic security. 
C) price-level stability. 
D) equity.

Question 10

Which of the following is real capital?

Accepted Answer

A) a pair of stockings 
B) a dump truck 
C) a savings account 
D) a share of TD Bank stock 
A) a pair of stockings 
B) a dump truck 
C) a savings account 
D) a share of TD Bank stock

Question 11

Unemployment and/or productive inefficiencies:

Accepted Answer

A) cause the production possibilities curve to shift outward. 
B) can exist at any point on a production possibilities curve. 
C) can both be illustrated by a point outside the production possibilities curve. 
D) can both be illustrated by a point inside the production possibilities curve. 
A) cause the production possibilities curve to shift outward. 
B) can exist at any point on a production possibilities curve. 
C) can both be illustrated by a point outside the production possibilities curve. 
D) can both be illustrated by a point inside the production possibilities curve.

Question 12

Recessions are characterised by points that are not attainable on the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the table below.According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

Accepted Answer

A) attainable, but involves an efficient use of society's resources. 
B) attainable, but would not be in the best interests of a strong national defence. 
C) not attainable because it is not listed in the schedule. 
D) not attainable because society does not have sufficient resources to produce this combination. 
A) attainable, but involves an efficient use of society's resources. 
B) attainable, but would not be in the best interests of a strong national defence. 
C) not attainable because it is not listed in the schedule. 
D) not attainable because society does not have sufficient resources to produce this combination.

Question 14

Opportunity cost is best defined as:

Accepted Answer

A) marginal cost minus marginal benefit. 
B) the time spent on an economic activity. 
C) the value of the best foregone alternative. 
D) the money cost of an economic decision. 
A) marginal cost minus marginal benefit. 
B) the time spent on an economic activity. 
C) the value of the best foregone alternative. 
D) the money cost of an economic decision.

Question 15

Markets usually do a good job of coordinating trade among individuals, groups, and nations.Is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A) Facing trade-offs 
B) Opportunity cost 
C) The effectiveness of markets 
D) The influence of incentives 
A) Facing trade-offs 
B) Opportunity cost 
C) The effectiveness of markets 
D) The influence of incentives

Question 16

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

Accepted Answer

A) a higher rate of growth of domestic output in country A than in Canada. 
B) greater rightward shifts in country A's production possibilities curve as compared to Canada. 
C) that in the long run living standards would rise more rapidly in country A than in Canada. 
D) all of the above to happen. 
A) a higher rate of growth of domestic output in country A than in Canada. 
B) greater rightward shifts in country A's production possibilities curve as compared to Canada. 
C) that in the long run living standards would rise more rapidly in country A than in Canada. 
D) all of the above to happen.

Question 17

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Accepted Answer

A) an increase in the amount of discrimination. 
B) a decline in the birth rate. 
C) an increase in the average skill level of all occupational groups. 
D) depletion and reduced availability of major energy resources. 
A) an increase in the amount of discrimination. 
B) a decline in the birth rate. 
C) an increase in the average skill level of all occupational groups. 
D) depletion and reduced availability of major energy resources.

Question 18

Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase.This is a reflection of:

Accepted Answer

A) resource scarcity and the necessity of choice. 
B) purposeful behaviour. 
C) marginal costs which exceed marginal benefits. 
D) the tradeoff problem which exists between competing goals. 
A) resource scarcity and the necessity of choice. 
B) purposeful behaviour. 
C) marginal costs which exceed marginal benefits. 
D) the tradeoff problem which exists between competing goals.

Question 19

A major argument for economic growth is that it:

Accepted Answer

A) creates an equal distribution of income. 
B) protects common property resources. 
C) leads to a higher standard of living. 
D) reduces the amount of taxation. 
A) creates an equal distribution of income. 
B) protects common property resources. 
C) leads to a higher standard of living. 
D) reduces the amount of taxation.

Question 20

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent, $20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.Refer to the above information.Using i and I to indicate the interest rate and investment (in billions of dollars) respectively, which of the following is the correct tabular presentation of the described relationship?

Accepted Answer

A) column (
A)  
B) column (
B)  
C) column (
C)  
D) column (
D)  
A) column (
A)  
B) column (
B)  
C) column (
C)  
D) column (
D)

Exam 1: B: Limits, Alternatives, and Choices

Refer to the above diagram for athletic shoes.If the current output of shoes is Q3, then:

The production possibilities curve represents which of the following?

The slope of a line parallel to the vertical axis is:

Refer to the above production possibilities curve.At the onset of World War II the Soviet Union's economy was already at full employment.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Refer to the above diagram.This production possibilities curve is:

If the production possibilities curve is a straight line:

A normative statement is one which:

Of the countries listed in Image 1.1 Which of the following positions did Canada occupy with regard to average income in 2015?

Concern about the general level of prices in an economy is primarily a concern about the economic goal of:

Which of the following is real capital?

Unemployment and/or productive inefficiencies:

Recessions are characterised by points that are not attainable on the production possibilities curve.

Refer to the table below.According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

Opportunity cost is best defined as:

Markets usually do a good job of coordinating trade among individuals, groups, and nations.Is which of the ten key concepts to retain for a lifetime?

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase.This is a reflection of:

A major argument for economic growth is that it:

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

Filters

Refer to the above diagram for athletic shoes.If the current output of shoes is Q₃, then: