Question 1

What happens when a variable on an axis of a graph changes?

Accepted Answer

A)  The curve will not shift. 
B)  The curve will shift. 
C)  The curve may or may not change depending on how the variables are related. 
D)  The curve will shift if the variable is on the vertical axis, but not on the horizontal axis. 
A)  The curve will not shift. 
B)  The curve will shift. 
C)  The curve may or may not change depending on how the variables are related. 
D)  The curve will shift if the variable is on the vertical axis, but not on the horizontal axis.

Question 2

What will the slope of a fairly flat upward-sloping line be?

Accepted Answer

A)  a small positive number 
B)  a large positive number 
C)  a small negative number 
D)  a large negative number 
A)  a small positive number 
B)  a large positive number 
C)  a small negative number 
D)  a large negative number

Question 3

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Accepted Answer

A) True 
 B)False

Question 4

What does microeconomics study?

Accepted Answer

A)  the behaviour of consumers 
B)  how individual households and firms make decisions 
C)  how government affects the economy 
D)  how the economy as a whole works 
A)  the behaviour of consumers 
B)  how individual households and firms make decisions 
C)  how government affects the economy 
D)  how the economy as a whole works

Question 5

What is the production possibilities frontier?

Accepted Answer

A)  a map that shows the frontier beyond which technological innovation is unprofitable 
B)  a map that shows areas of the world in which capitalist production is highest 
C)  a graph that shows the various combinations of resources that can be used to produce a given level of output 
D)  a graph that shows the various combinations of output the economy can possibly produce given the available resources and technology 
A)  a map that shows the frontier beyond which technological innovation is unprofitable 
B)  a map that shows areas of the world in which capitalist production is highest 
C)  a graph that shows the various combinations of resources that can be used to produce a given level of output 
D)  a graph that shows the various combinations of output the economy can possibly produce given the available resources and technology

Question 6

Because it is difficult for economists to use experiments to generate data, what must they generally do?

Accepted Answer

A)  do without data 
B)  use whatever data the world gives them 
C)  select a committee of economists to make up data for all economists to use 
D)  use hypothetical, computer-generated data 
A)  do without data 
B)  use whatever data the world gives them 
C)  select a committee of economists to make up data for all economists to use 
D)  use hypothetical, computer-generated data

Question 7

What is the first number in an ordered pair?

Accepted Answer

A)  the y-coordinate 
B)  the x-coordinate 
C)  either x or y, depending on the quadrant 
D)  not useful to know, since most graphs in economics use p and q, not x and y 
A)  the y-coordinate 
B)  the x-coordinate 
C)  either x or y, depending on the quadrant 
D)  not useful to know, since most graphs in economics use p and q, not x and y

Question 8

Use the following demand curve to answer the following questions:
a. How would point A be represented as an ordered pair?
b. What type of curve is this?
c. Does this curve show a positive or negative correlation between price and quantity?
d. Compute the slope of D₁ between points A and C.
e. What is the slope of D₁ between points C and E? Why would you NOT have to calculate this answer?
f. What is it called if we move from D₁
 to D₂?
g. How do you know that the slope of D₂ is the same as the slope of D₁?

Accepted Answer

a. (20, 24)
b. a demand curve
c. a negat

Question 9

What are the foundation stones from which economic models are built?

Accepted Answer

A)  economic policies 
B)  legal systems 
C)  assumptions 
D)  statistical forecasts 
A)  economic policies 
B)  legal systems 
C)  assumptions 
D)  statistical forecasts

Question 10

When do you know an economist has crossed the line from scientist to policy adviser?

Accepted Answer

A)  when he explains just the facts 
B)  when he makes positive statements 
C)  when he makes normative statements 
D)  when he cannot reach a conclusion 
A)  when he explains just the facts 
B)  when he makes positive statements 
C)  when he makes normative statements 
D)  when he cannot reach a conclusion

Question 11

Which concept is NOT illustrated by the production possibilities frontier?

Accepted Answer

A)  efficiency 
B)  opportunity cost 
C)  equity 
D)  tradeoffs 
A)  efficiency 
B)  opportunity cost 
C)  equity 
D)  tradeoffs

Question 12

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 0 to 100?

Accepted Answer

A)  50 fire trucks 
B)  100 fire trucks 
C)  150 fire trucks 
D)  200 fire trucks 
A)  50 fire trucks 
B)  100 fire trucks 
C)  150 fire trucks 
D)  200 fire trucks

Question 13

In the simple circular-flow diagram, who owns the factors of production?

Accepted Answer

A)  the government 
B)  firms 
C)  households 
D)  corporations 
A)  the government 
B)  firms 
C)  households 
D)  corporations

Question 14

How can the production possibilities frontiers shift outward?

Accepted Answer

A)  if government increases the amount of money in the economy 
B)  if there is an increase in technology 
C)  if resources can be moved from the production of one good to another 
D)  if opportunity costs are reduced 
A)  if government increases the amount of money in the economy 
B)  if there is an increase in technology 
C)  if resources can be moved from the production of one good to another 
D)  if opportunity costs are reduced

Question 15

What does The Bank of Canada do?

Accepted Answer

A)  designs tax policy 
B)  enforces the country's antitrust laws 
C)  sets the country's monetary policy 
D)  analyzes the data on workers 
A)  designs tax policy 
B)  enforces the country's antitrust laws 
C)  sets the country's monetary policy 
D)  analyzes the data on workers

Question 16

Figure 2-1
  
-Refer to Figure 2-1. Which arrow shows the flow of spending by households?

Accepted Answer

A)  arrow A 
B)  arrow B 
C)  arrow C 
D)  arrow D 
A)  arrow A 
B)  arrow B 
C)  arrow C 
D)  arrow D

Question 17

Suppose there are two countries, Freedonia and Sylvania, which have identical amounts of resources, identical technologies, and identical populations. Both produce two types of goods, consumer goods and capital goods, and they both always operate on their production possibilities frontiers. The only difference is that this year Freedonia chooses to produce relatively more consumer goods than Sylvania.??What will happen as a result?

Accepted Answer

A)  Freedonia will have a higher living standard this year but will grow slower than Sylvania. 
B)  Freedonia will have a higher living standard this year and will grow faster than Sylvania. 
C)  Sylvania will have a higher living standard this year but will grow slower than Freedonia. 
D)  Sylvania will have a higher living standard this year and will grow faster than Freedonia. 
A)  Freedonia will have a higher living standard this year but will grow slower than Sylvania. 
B)  Freedonia will have a higher living standard this year and will grow faster than Sylvania. 
C)  Sylvania will have a higher living standard this year but will grow slower than Freedonia. 
D)  Sylvania will have a higher living standard this year and will grow faster than Freedonia.

Question 18

Which of the following is a one-variable graph?

Accepted Answer

A)  a demand curve 
B)  a production possibilities curve 
C)  a circular-flow diagram 
D)  a bar graph 
A)  a demand curve 
B)  a production possibilities curve 
C)  a circular-flow diagram 
D)  a bar graph

Question 19

Why do economists make assumptions?

Accepted Answer

A)  to diminish the chance of wrong answers 
B)  to make the world easier to understand 
C)  because all scientists make assumptions 
D)  to make certain that all necessary variables are included 
A)  to diminish the chance of wrong answers 
B)  to make the world easier to understand 
C)  because all scientists make assumptions 
D)  to make certain that all necessary variables are included

Question 20

What would be considered a topic of study in macroeconomics?

Accepted Answer

A)  the impact of agricultural price support programs in the dairy industry 
B)  the effect on Canadian steel producers due to an import quota imposed on foreign steel 
C)  the effect of an increase in the price of imported oil on the Canadian inflation rate 
D)  the effect of an increase in the price of imported coffee beans on the Canadian coffee industry 
A)  the impact of agricultural price support programs in the dairy industry 
B)  the effect on Canadian steel producers due to an import quota imposed on foreign steel 
C)  the effect of an increase in the price of imported oil on the Canadian inflation rate 
D)  the effect of an increase in the price of imported coffee beans on the Canadian coffee industry

What happens when a variable on an axis of a graph changes?

What will the slope of a fairly flat upward-sloping line be?

Normative statements describe how the world is, while positive statements prescribe how the world should be.

What does microeconomics study?

What is the production possibilities frontier?

Because it is difficult for economists to use experiments to generate data, what must they generally do?

What is the first number in an ordered pair?

What are the foundation stones from which economic models are built?

When do you know an economist has crossed the line from scientist to policy adviser?

Which concept is NOT illustrated by the production possibilities frontier?

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 0 to 100?

In the simple circular-flow diagram, who owns the factors of production?

How can the production possibilities frontiers shift outward?

What does The Bank of Canada do?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of spending by households?

Which of the following is a one-variable graph?

Why do economists make assumptions?

What would be considered a topic of study in macroeconomics?

Ten Principles of Economics

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

Exam 2: Thinking Like an Economist

What happens when a variable on an axis of a graph changes?

What will the slope of a fairly flat upward-sloping line be?

Normative statements describe how the world is, while positive statements prescribe how the world should be.

What does microeconomics study?

What is the production possibilities frontier?

Because it is difficult for economists to use experiments to generate data, what must they generally do?

What is the first number in an ordered pair?

What are the foundation stones from which economic models are built?

When do you know an economist has crossed the line from scientist to policy adviser?

Which concept is NOT illustrated by the production possibilities frontier?

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 0 to 100?

In the simple circular-flow diagram, who owns the factors of production?

How can the production possibilities frontiers shift outward?

What does The Bank of Canada do?

Figure 2-1 -Refer to Figure 2-1. Which arrow shows the flow of spending by households?

Which of the following is a one-variable graph?

Why do economists make assumptions?

What would be considered a topic of study in macroeconomics?

Ten Principles of Economics

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