Question 1

What is the primary determinant of a country's standard of living?

Accepted Answer

A)  the ability to reduce foreign competition 
B)  the ability to produce goods and services 
C)  the total supply of money in the economy 
D)  the average age of the country's labour force 
A)  the ability to reduce foreign competition 
B)  the ability to produce goods and services 
C)  the total supply of money in the economy 
D)  the average age of the country's labour force B

Question 2

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Accepted Answer

A)  if it charged no less than $140 for the three remaining seats 
B)  if it charged more than $140 for the three remaining seats 
C)  if it charged any ticket price above $0 for the remaining seats 
D)  if it left the seats empty 
A)  if it charged no less than $140 for the three remaining seats 
B)  if it charged more than $140 for the three remaining seats 
C)  if it charged any ticket price above $0 for the remaining seats 
D)  if it left the seats empty C

Question 3

Which situation best illustrates a marginal change?

Accepted Answer

A)  Nancy retires and takes a part-time job. She was working 40 hours per week, but now works 10 hours per week. 
B)  Provincial University has announced that due to provincial budget deficits, tuition must rise by 25% next year. 
C)  Adam moved from Edmonton to Toronto and now pays 40% more for rent than before. 
D)  Banff, which usually receives 600 cm of snow per year, received 620cm last year. 
A)  Nancy retires and takes a part-time job. She was working 40 hours per week, but now works 10 hours per week. 
B)  Provincial University has announced that due to provincial budget deficits, tuition must rise by 25% next year. 
C)  Adam moved from Edmonton to Toronto and now pays 40% more for rent than before. 
D)  Banff, which usually receives 600 cm of snow per year, received 620cm last year. D

Question 4

Stan buys a 1966 Mustang, which he plans to restore and sell. He anticipates that the cost of the car and the repairs will be $15,000 and that he can sell it for $19,000. When he has spent $15,000, he discovers he needs to replace the engine, which will cost $4000. He can sell the car without the new engine for $9000. What should Stan do?

Accepted Answer

A)  He should complete the repairs and sell the car for $13,000. 
B)  He should sell the car now for $9000. 
C)  He should never try such an expensive project again. 
D)  He should be totally indifferent between finishing the project and selling the car now. 
A)  He should complete the repairs and sell the car for $13,000. 
B)  He should sell the car now for $9000. 
C)  He should never try such an expensive project again. 
D)  He should be totally indifferent between finishing the project and selling the car now.

Question 5

To what extent does the invisible hand model of a market ensure equity and efficiency?

Accepted Answer

A)  The invisible hand always ensures both equity and efficiency. 
B)  The invisible hand cannot ensure either equity or efficiency. 
C)  The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D)  The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. 
A)  The invisible hand always ensures both equity and efficiency. 
B)  The invisible hand cannot ensure either equity or efficiency. 
C)  The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. 
D)  The invisible hand is more effective at ensuring equity than it is at ensuring efficiency.

Question 6

Which business most likely has market power?

Accepted Answer

A)  a furniture store in Kingston 
B)  a vineyard in the Okanagan Valley 
C)  a maple sugar candy store in Sherbrooke, Quebec 
D)  a hockey arena in the small town of Invermere, British Columbia 
A)  a furniture store in Kingston 
B)  a vineyard in the Okanagan Valley 
C)  a maple sugar candy store in Sherbrooke, Quebec 
D)  a hockey arena in the small town of Invermere, British Columbia

Question 7

What is the definition of inflation?

Accepted Answer

A)  a period of rising productivity in the economy 
B)  a period of rising income in the economy 
C)  an increase in the overall level of output in the economy 
D)  an increase in the overall level of prices in the economy 
A)  a period of rising productivity in the economy 
B)  a period of rising income in the economy 
C)  an increase in the overall level of output in the economy 
D)  an increase in the overall level of prices in the economy

Question 8

In the nation of Dictatorland, farmers traditionally feed grain to their livestock. Central planners, however, decided to increase the price of grain to make grain farmers happy and to reduce the price of bread made from that grain to make city dwellers happy. Now the price of bread is lower than the price of grain. What might we now expect?

Accepted Answer

A)  farmers to continue to feed grain to their livestock 
B)  farmers to start feeding bread to their livestock 
C)  city dwellers to start buying grain to make bread to eat 
D)  city dwellers to start buying grain to make bread to sell 
A)  farmers to continue to feed grain to their livestock 
B)  farmers to start feeding bread to their livestock 
C)  city dwellers to start buying grain to make bread to eat 
D)  city dwellers to start buying grain to make bread to sell

Question 9

Which good best meets the definition of scarcity?

Accepted Answer

A)  air 
B)  water in the ocean 
C)  electricity in a city 
D)  wood in a forest 
A)  air 
B)  water in the ocean 
C)  electricity in a city 
D)  wood in a forest

Question 10

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Question 11

What is one advantage that market economies have over central planning?

Accepted Answer

A)  They provide an equal distribution of goods and services to consumers. 
B)  They establish government economic control. 
C)  They solve the problem of scarcity. 
D)  They are more efficient. 
A)  They provide an equal distribution of goods and services to consumers. 
B)  They establish government economic control. 
C)  They solve the problem of scarcity. 
D)  They are more efficient.

Question 12

From which of the following is the word "economy" derived?

Accepted Answer

A)  environment 
B)  one who manages a household 
C)  one who participates in a market 
D)  allocation 
A)  environment 
B)  one who manages a household 
C)  one who participates in a market 
D)  allocation

Question 13

Scarcity means that there is less of a good or resource available than people wish to have.

Accepted Answer

A) True 
 B)False

Question 14

Lisa buys a 1982 BMW, which she plans to restore and sell. She anticipates that the cost of the car and the repairs will be $10,000 and that she can sell it for $15,000. After she has spent $10,000, she discovers she needs to replace the engine, which will cost $4000. She can sell the car without the new engine for $11,000. What should Lisa do?

Accepted Answer

A)  She should complete the repairs for $4000 and sell the car for $15,000. 
B)  She should sell the car now for $11,000. 
C)  She should keep the car because selling it would be a loss. 
D)  She should be totally indifferent between finishing the project and selling the car now. 
A)  She should complete the repairs for $4000 and sell the car for $15,000. 
B)  She should sell the car now for $11,000. 
C)  She should keep the car because selling it would be a loss. 
D)  She should be totally indifferent between finishing the project and selling the car now.

Question 15

In 2014, what was the average Canadian income?

Accepted Answer

A)  $25,368 
B)  $29,000 
C)  $36,800 
D)  $49,000 
A)  $25,368 
B)  $29,000 
C)  $36,800 
D)  $49,000

Question 16

What is the effect of an increase in the money supply in the economy?

Accepted Answer

A)  It increases unemployment in the short run. 
B)  It increases inflation in the long run. 
C)  It increases inflation in the short run. 
D)  It increases unemployment in the long run. 
A)  It increases unemployment in the short run. 
B)  It increases inflation in the long run. 
C)  It increases inflation in the short run. 
D)  It increases unemployment in the long run.

Question 17

Why is the opportunity cost of gasoline in Canada higher than in the United States when measured by "Minutes Worked per Kilometre Driven"?

Accepted Answer

A)  The fuel economy in the two countries is different. 
B)  Gas prices are lower and average wages are higher in the United States. 
C)  Both gas prices and average wages are higher in the United States. 
D)  Both gas prices and average wages are lower in the United States. 
A)  The fuel economy in the two countries is different. 
B)  Gas prices are lower and average wages are higher in the United States. 
C)  Both gas prices and average wages are higher in the United States. 
D)  Both gas prices and average wages are lower in the United States.

Question 18

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Accepted Answer

A) True 
 B)False

Question 19

What is NOT a benefit from trade?

Accepted Answer

A)  the ability to specialize 
B)  a greater variety of goods and services becoming available 
C)  less competition 
D)  lower prices 
A)  the ability to specialize 
B)  a greater variety of goods and services becoming available 
C)  less competition 
D)  lower prices

Question 20

What are two very likely reasons for a government to intervene in a market?

Accepted Answer

A)  to promote stability and to raise revenues 
B)  to promote equity and to promote efficiency 
C)  to promote equity and to promote stability 
D)  to promote efficiency and to raise revenues 
A)  to promote stability and to raise revenues 
B)  to promote equity and to promote efficiency 
C)  to promote equity and to promote stability 
D)  to promote efficiency and to raise revenues

What is the primary determinant of a country's standard of living?

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Which situation best illustrates a marginal change?

To what extent does the invisible hand model of a market ensure equity and efficiency?

Which business most likely has market power?

What is the definition of inflation?

Which good best meets the definition of scarcity?

Trade with any nation can be mutually beneficial.

What is one advantage that market economies have over central planning?

From which of the following is the word "economy" derived?

Scarcity means that there is less of a good or resource available than people wish to have.

In 2014, what was the average Canadian income?

What is the effect of an increase in the money supply in the economy?

Why is the opportunity cost of gasoline in Canada higher than in the United States when measured by "Minutes Worked per Kilometre Driven"?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

What is NOT a benefit from trade?

What are two very likely reasons for a government to intervene in a market?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 1: Ten Principles of Economics

What is the primary determinant of a country's standard of living?

The average cost per seat on a train trip from Edmonton to Jasper is $140. Suppose no refreshments are served and three seats are empty. How could the train company increase its profit?

Which situation best illustrates a marginal change?

To what extent does the invisible hand model of a market ensure equity and efficiency?

Which business most likely has market power?

What is the definition of inflation?

Which good best meets the definition of scarcity?

Trade with any nation can be mutually beneficial.

What is one advantage that market economies have over central planning?

From which of the following is the word "economy" derived?

Scarcity means that there is less of a good or resource available than people wish to have.

In 2014, what was the average Canadian income?

What is the effect of an increase in the money supply in the economy?

Why is the opportunity cost of gasoline in Canada higher than in the United States when measured by "Minutes Worked per Kilometre Driven"?

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

What is NOT a benefit from trade?

What are two very likely reasons for a government to intervene in a market?

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters