Question 1

Who receives the most of what is produced in a market economy?

Accepted Answer

A) lawmakers and other politically favored groups 
B) those who are willing and able to buy them 
C) Everyone receives an equal amount. 
D) people who earn the highest incomes 
A) lawmakers and other politically favored groups 
B) those who are willing and able to buy them 
C) Everyone receives an equal amount. 
D) people who earn the highest incomes

Question 2

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Accepted Answer

A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie charts 
D) Bar graphs 
A) Two-dimensional graphs 
B) One-dimensional graphs 
C) Pie charts 
D) Bar graphs

Question 3

Which of the following is motivated by an equity concern?

Accepted Answer

A) Some provinces and municipalities have transferred funds to food bank programs in order to increase benefits to lower-income families. 
B) Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in BC. 
C) Some provinces allow automotive insurance companies to charge men and women different rates for insurance. 
D) Canada offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products. 
A) Some provinces and municipalities have transferred funds to food bank programs in order to increase benefits to lower-income families. 
B) Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in BC. 
C) Some provinces allow automotive insurance companies to charge men and women different rates for insurance. 
D) Canada offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products.

Question 4

Where do economic agents such as individuals, firms and nations, interact with each other?

Accepted Answer

A) in public locations monitored by the government 
B) in any arena that brings together buyers and sellers 
C) in any physical location people where people can physically get together for selling goods, such as shopping malls 
D) in any location where transactions can be monitored by consumer groups and taxed by the government 
A) in public locations monitored by the government 
B) in any arena that brings together buyers and sellers 
C) in any physical location people where people can physically get together for selling goods, such as shopping malls 
D) in any location where transactions can be monitored by consumer groups and taxed by the government

Question 5

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.Should DeShawn continue to offer the engine detailing service?

Accepted Answer

A) Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes, but only if he raises the price of the basic detailing package. 
C) No, his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision. 
A) Yes, he still makes a profit by selling the engine detailing service with the basic detailing package. 
B) Yes, but only if he raises the price of the basic detailing package. 
C) No, his marginal benefit is less than his marginal cost. 
D) More information is needed for DeShawn to make this decision.

Question 6

In the market for factors of production, firms earn income by selling goods and services to households.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is false?

Accepted Answer

A) An inverse relationship has a negative slope value. 
B) A direct relationship has a positive slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of zero. 
A) An inverse relationship has a negative slope value. 
B) A direct relationship has a positive slope value. 
C) A curved line has slope values that change at every point. 
D) A straight line has a slope of zero.

Question 8

Which of the following is a microeconomics question?

Accepted Answer

A) How much will be saved and how much will be produced in the entire economy? 
B) What will the level of economic growth be in the entire economy? 
C) What factors determine the price of carrots? 
D) What determines the average price level and inflation? 
A) How much will be saved and how much will be produced in the entire economy? 
B) What will the level of economic growth be in the entire economy? 
C) What factors determine the price of carrots? 
D) What determines the average price level and inflation?

Question 9

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00 
A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00

Question 10

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Accepted Answer

A) The student has failed to take into account other causes of Alzheimer's disease. 
B) The student is drawing a false conclusion; he is confusing cause and effect. 
C) The student is using an inadequate sample size. 
D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents. 
A) The student has failed to take into account other causes of Alzheimer's disease. 
B) The student is drawing a false conclusion; he is confusing cause and effect. 
C) The student is using an inadequate sample size. 
D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.

Question 11

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Accepted Answer

A) an additional unit 
B) the total number of units 
C) no units 
D) only profitable units 
A) an additional unit 
B) the total number of units 
C) no units 
D) only profitable units

Question 12

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

Accepted Answer

A) True 
 B)False

Question 13

As the minimum wage rises

Accepted Answer

A) the price of takeout coffee will rise. 
B) the price of takeout coffee will fall. 
C) there will be a shortage of coffee. 
D) there will be a surplus of coffee. 
A) the price of takeout coffee will rise. 
B) the price of takeout coffee will fall. 
C) there will be a shortage of coffee. 
D) there will be a surplus of coffee.

Question 14

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output. 
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output.

Question 15

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 16

When production reflects consumer preferences, ________ occurs.

Accepted Answer

A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning 
A) allocative efficiency 
B) productive efficiency 
C) equity 
D) efficient central planning

Question 17

Economic models do all of the following except

Accepted Answer

A) answer economic questions. 
B) portray reality in all its minute details. 
C) make economic ideas explicit and concrete for use by decision makers. 
D) simplify some aspect of economic life. 
A) answer economic questions. 
B) portray reality in all its minute details. 
C) make economic ideas explicit and concrete for use by decision makers. 
D) simplify some aspect of economic life.

Question 18

Suppose that watching one more episode of your favourite NetFlix show is worth $ 200 to you. Suppose that studying for that same amount of time will boost your mark enough to get you a bursary. What is the smallest size of the bursary that would cause you to study instead of watching another episode (assuming you are rational)?

Accepted Answer

The bursary would have to be a

Question 19

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Accepted Answer

A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy 
A) Competition 
B) Voluntary exchange 
C) Equity 
D) A centrally planned economy

Question 20

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Accepted Answer

A) True 
 B)False

Who receives the most of what is produced in a market economy?

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Which of the following is motivated by an equity concern?

Where do economic agents such as individuals, firms and nations, interact with each other?

In the market for factors of production, firms earn income by selling goods and services to households.

Which of the following statements is false?

Which of the following is a microeconomics question?

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

As the minimum wage rises

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

When production reflects consumer preferences, ________ occurs.

Economic models do all of the following except

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 1: Economics: Foundations and Models

Who receives the most of what is produced in a market economy?

________ have a horizontal and a vertical axis and are used in economics to illustrate relationships between two economic variables.

Which of the following is motivated by an equity concern?

Where do economic agents such as individuals, firms and nations, interact with each other?

In the market for factors of production, firms earn income by selling goods and services to households.

Which of the following statements is false?

Which of the following is a microeconomics question?

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

The prevalence of Alzheimer's dementia is very high among residents living in nursing homes.A student concludes that it is likely that living in nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."

As the minimum wage rises

Why is it necessary for all economic systems to not only provide people with goods and services, but also restrict them from getting as much of these goods and services as they wish?

One desirable outcome of a market economy is that it leads to a more equitable distribution of income.

When production reflects consumer preferences, ________ occurs.

Economic models do all of the following except

________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

Examining the conditions that could lead to a recession in an economy is an example of macroeconomics topic.

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters