Question 1

An economic model is a simplified version of reality used to analyse real-world economic situations.

Accepted Answer

A) True 
 B)False

Question 2

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is:

Accepted Answer

A) negative 8 divided by 4. 
B) seven tenths. 
C) negative one half. 
D) one and one half. 
A) negative 8 divided by 4. 
B) seven tenths. 
C) negative one half. 
D) one and one half.

Question 3

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that________.

Accepted Answer

A) people with health insurance will be less likely to be overweight than people without health insurance. 
B) people with health insurance will be more likely to be overweight than people without health insurance. 
C) people with health insurance will be equally likely to be overweight as people without health insurance. 
D) there is no correlation between having health insurance and being overweight. 
A) people with health insurance will be less likely to be overweight than people without health insurance. 
B) people with health insurance will be more likely to be overweight than people without health insurance. 
C) people with health insurance will be equally likely to be overweight as people without health insurance. 
D) there is no correlation between having health insurance and being overweight.

Question 4

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Accepted Answer

A) True 
 B)False

Question 5

Marginal benefit refers to the additional benefit that your activity provides to you.

Accepted Answer

A) True 
 B)False

Question 6

Damian shares a small food truck with his sister.His share of the expenses is $500 per month.He has decided to get his own, newer food truck which he will not have to share with anyone.His expenses for the newer truck are $1400 per month.Damian is as rational as any other person.As an economics major, you rightly conclude that________.

Accepted Answer

A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B) Damian figures that the additional benefit of having his own truck (as opposed to sharing)is at least $900. 
C) Damian figures that the benefit of having his own truck (as opposed to sharing)is at least $1400. 
D) the cost of having one's own truck outweighs the benefits. 
A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister. 
B) Damian figures that the additional benefit of having his own truck (as opposed to sharing)is at least $900. 
C) Damian figures that the benefit of having his own truck (as opposed to sharing)is at least $1400. 
D) the cost of having one's own truck outweighs the benefits.

Question 7

All of the following are part of an economic model except:

Accepted Answer

A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions. 
A) assumptions. 
B) hypotheses. 
C) data. 
D) opinions.

Question 8

Arlene quits her $125 000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

Accepted Answer

A) Zero, since she will no longer be earning a salary. 
B) It depends on the 'going rate' for home-care providers. 
C) At least $125 000 
D) The value she attributes to the satisfaction she receives from taking care of her parents 
A) Zero, since she will no longer be earning a salary. 
B) It depends on the 'going rate' for home-care providers. 
C) At least $125 000 
D) The value she attributes to the satisfaction she receives from taking care of her parents

Question 9

If the price of milk was $2.50 a litre and it is now $3.25 a litre, what is the percentage change in price?

Accepted Answer

A) 13 per cent 
B) 30 per cent 
C) 75 per cent 
D) 77 per cent 
A) 13 per cent 
B) 30 per cent 
C) 75 per cent 
D) 77 per cent

Question 10

If the marginal cost of keeping a doctor's office open one additional hour per day is $200, then the doctor should keep the office open for one extra hour________.

Accepted Answer

A) only if the marginal benefit she receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit she receives is just equal to or greater than $200. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit she receives reaches zero. 
A) only if the marginal benefit she receives is greater than $200 plus an acceptable profit margin. 
B) as long as the marginal benefit she receives is just equal to or greater than $200. 
C) as long as the marginal cost does not rise. 
D) until the marginal benefit she receives reaches zero.

Question 11

Figure 1.4  
-Refer to Figure 1.4.Which of the following statements is false?

Accepted Answer

A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero. 
A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero.

Question 12

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 a 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 13

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Accepted Answer

A) True 
 B)False

Question 14

The additional cost to a producer of hiring an additional unit of labour is called the marginal cost.

Accepted Answer

A) True 
 B)False

Question 15

What basic economic problem has always existed and will continue to exist?

Accepted Answer

A) Scarcity 
B) Efficiency 
C) Inflation 
D) Recession 
A) Scarcity 
B) Efficiency 
C) Inflation 
D) Recession

Question 16

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-colour pinstriping job is $35, and she charges $95 for this service.For a total price of $175, Allison will apply a fancier 3-colour pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package.Should Allison continue to offer the 3-colour pinstripe application?

Accepted Answer

A) Yes, she still makes a profit by selling the 3-colour application. 
B) Yes, but only if she lowers the price of the 1-colour application. 
C) No, her marginal benefit is less than her marginal cost. 
D) More information is needed for Allison to make this decision. 
A) Yes, she still makes a profit by selling the 3-colour application. 
B) Yes, but only if she lowers the price of the 1-colour application. 
C) No, her marginal benefit is less than her marginal cost. 
D) More information is needed for Allison to make this decision.

Question 17

What is an economic model?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

An economic model is a simplif

Question 18

In which of the following situations does society not face a trade-off?

Accepted Answer

A) When deciding who will receive the goods and services produced. 
B) When deciding what goods and services will be produced. 
C) When deciding how goods and services will be produced. 
D) When some previously unemployed workers find jobs. 
A) When deciding who will receive the goods and services produced. 
B) When deciding what goods and services will be produced. 
C) When deciding how goods and services will be produced. 
D) When some previously unemployed workers find jobs.

Question 19

An example of a microeconomics question is:

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?

An economic model is a simplified version of reality used to analyse real-world economic situations.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is:

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that________.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Marginal benefit refers to the additional benefit that your activity provides to you.

All of the following are part of an economic model except:

Arlene quits her $125 000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

If the price of milk was $2.50 a litre and it is now $3.25 a litre, what is the percentage change in price?

If the marginal cost of keeping a doctor's office open one additional hour per day is $200, then the doctor should keep the office open for one extra hour________.

Figure 1.4 -Refer to Figure 1.4.Which of the following statements is false?

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 a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

The additional cost to a producer of hiring an additional unit of labour is called the marginal cost.

What basic economic problem has always existed and will continue to exist?

What is an economic model? __________________________________________________________________________________________________________________________________________________________________________________________

In which of the following situations does society not face a trade-off?

An example of a microeconomics question is:

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

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Exam 1: Economics: Foundations and Models

An economic model is a simplified version of reality used to analyse real-world economic situations.

If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is:

Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that________.

Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity.

Marginal benefit refers to the additional benefit that your activity provides to you.

All of the following are part of an economic model except:

Arlene quits her $125 000-a-year job to take care of her ailing parents.What is the opportunity cost of her decision?

If the price of milk was $2.50 a litre and it is now $3.25 a litre, what is the percentage change in price?

If the marginal cost of keeping a doctor's office open one additional hour per day is $200, then the doctor should keep the office open for one extra hour________.

Figure 1.4 -Refer to Figure 1.4.Which of the following statements is false?

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 a nursing home causes Alzheimer's dementia.What is the flaw in the student's reasoning?

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

The additional cost to a producer of hiring an additional unit of labour is called the marginal cost.

What basic economic problem has always existed and will continue to exist?

What is an economic model? __________________________________________________________________________________________________________________________________________________________________________________________

In which of the following situations does society not face a trade-off?

An example of a microeconomics question is:

Choices and Trade-Offs in the Market

Where Prices Come From: The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition: The Competitive Model in a More Realistic

Oligopoly: Markets With Few Competitors

The Markets for Labour and Other Factors of Production

Comparative Advantage and the Gains From International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters