Exam 1: Economic Issues and Concepts

In a pure market economy, the role of government is limited to provision of :i) a basic legal and institutional structure.ii) intervention in the allocation of resources in some areas of the economy. iii) redistribution of income.iv) stabilization of economic conditions generally. Which of the above points is true?

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Madeleine allows herself $100 per month for purchasing coffee. The diagram below illustrates the choices available to her. FIGURE 1-2 -Refer to Figure 1-2.

Which countries have mostly public ownership of resources?

Consider a production possibilities boundary showing the quantity of military goods and thequantity of civilian goods on the two axes. A movement along the production possibilitiesboundary could be caused by

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

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

Comparison of economic systems indicates that

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

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

On a diagram of a production possibilities boundary, the concept of scarcity is illustrated by the

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.

Which of the following statements best describes the underlying feature in most economic problems?

Consider the production possibilities boundary (PPB) of an economy. Economic growth is illustrated by

In a modern mixed economy the government ensures that key institutions are in place to facilitatevoluntary transactions between economic agents. These key institutions are

Suppose drought destroys many millions of acres of valuable Canadian farmland. The effect on theCanadian economy would be to move

The downward-sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1-5 -Refer to Figure 1-5. The levels of health and education expenditures at point C

The key decision makers in a market economy are:

Labour services are bought and sold in a

During the nineteenth and early twentieth centuries, millions of people immigrated to westernCanada. The effect on the Canadian economy was to

In practice, the term "centrally planned economy" refers to an economy in which