Question 1

A rational person is someone that

Accepted Answer

A)  is reasonable. 
B)  makes choices that are easily understood. 
C)  possesses clear objectives and behaves logically to achieve them. 
D)  does not believe what experts claim. 
E)  is highly cynical. 
A)  is reasonable. 
B)  makes choices that are easily understood. 
C)  possesses clear objectives and behaves logically to achieve them. 
D)  does not believe what experts claim. 
E)  is highly cynical.

Question 2

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home.
  
-If the marginal benefit is constant at $350,what is the optimal number of rooms to paint?

Accepted Answer

A)  0. 
B)  1. 
C)  2. 
D)  3. 
E)  4. 
A)  0. 
B)  1. 
C)  2. 
D)  3. 
E)  4.

Question 3

Even today,microeconomic concepts developed by ___________ remain influential.

Accepted Answer

A)  Adam Smith. 
B)  Alfred Marshall. 
C)  David Hume 
D)  John Maynard Keynes. 
E)  John Stuart Mill. 
A)  Adam Smith. 
B)  Alfred Marshall. 
C)  David Hume 
D)  John Maynard Keynes. 
E)  John Stuart Mill.

Question 4

The core problem of economics is

Accepted Answer

A)  that unemployment is too high. 
B)  that governments do not spend enough money on education. 
C)  understanding the Great Depression. 
D)  the scarcity problem. 
E)  determining the best price for oil. 
A)  that unemployment is too high. 
B)  that governments do not spend enough money on education. 
C)  understanding the Great Depression. 
D)  the scarcity problem. 
E)  determining the best price for oil.

Question 5

The Latin expression for "all else equal" is ______.

Accepted Answer

A)  ad infinitum. 
B)  carpe diem. 
C)  ceteris paribus. 
D)  de facto. 
E)  prima faciE. 
A)  ad infinitum. 
B)  carpe diem. 
C)  ceteris paribus. 
D)  de facto. 
E)  prima faciE.

Question 6

Jason studied 5 hours for his first History test and his test score was 85;6 hours for his second History test and scored 90;and 7 hours for his third History test and scored 95.He also studied 5 hours for his first Math test and his test score was 68;6 hours for his second Math test and scored 78;and 7 hours for his third Math test and scored 88.
-The marginal benefit of the last hour of History studied was ________ and the marginal benefit of the last hour of Math studied was _______.

Accepted Answer

A)  15;13 
B)  5;10 
C)  90;78 
D)  13;15 
E)  10: 5 
A)  15;13 
B)  5;10 
C)  90;78 
D)  13;15 
E)  10: 5

Question 7

-Which of the costs listed in the table are sunk costs?

Accepted Answer

A)  Expenditures on research and development. 
B)  Interest payments on plant and equipment. 
C)  Salaries for engineers. 
D)  Salaries for support staff. 
E)  Materials costs. 
A)  Expenditures on research and development. 
B)  Interest payments on plant and equipment. 
C)  Salaries for engineers. 
D)  Salaries for support staff. 
E)  Materials costs.

Question 8

The fundamental problem that is studied in economics is that

Accepted Answer

A)  consumers have limited wants in the face of unlimited resources. 
B)  markets should function without government interference. 
C)  Canada is too wealthy. 
D)  consumers have unlimited wants in the face of limited resources. 
E)  there are unlimited resources. 
A)  consumers have limited wants in the face of unlimited resources. 
B)  markets should function without government interference. 
C)  Canada is too wealthy. 
D)  consumers have unlimited wants in the face of limited resources. 
E)  there are unlimited resources.

Question 9

Deciding to pursue an activity as long as the extra benefits are at least equal to the extra costs defines the

Accepted Answer

A)  cost-benefit principle. 
B)  scarcity principle. 
C)  No-Free-Lunch principle. 
D)  marginal principle. 
E)  extra principlE. 
A)  cost-benefit principle. 
B)  scarcity principle. 
C)  No-Free-Lunch principle. 
D)  marginal principle. 
E)  extra principlE.

Question 10

Maria spends her afternoon at the beach,paying $2 to rent a beach umbrella and $10 for food and drinks,rather than going to a movie.The total cost of going to the beach is

Accepted Answer

A)  zero,because the money she spent was for food,drinks and an umbrella rather than to enter the beach. 
B)  the $12 she spent on the umbrella,food and drinks. 
C)  only $2 because she would have spent the money on food and drinks whether or not she went to the beach. 
D)  the movie she missed seeing. 
E)  the movie she missed seeing plus the $12 she spent on the umbrella,food,and drinks. 
A)  zero,because the money she spent was for food,drinks and an umbrella rather than to enter the beach. 
B)  the $12 she spent on the umbrella,food and drinks. 
C)  only $2 because she would have spent the money on food and drinks whether or not she went to the beach. 
D)  the movie she missed seeing. 
E)  the movie she missed seeing plus the $12 she spent on the umbrella,food,and drinks.

Question 11

David finds he has one hour of time in the evening to allocate on the first day of the new semester. He can do one of two things. He can watch TV for one hour or he can open his economics textbook and read for an hour. The benefit of watching TV is 30; the benefit of reading about economics is 20.
-Suppose that,instead of the first day of the semester,it is the night before David's first exam in economics.One could reasonably predict that the

Accepted Answer

A)  benefit of watching TV will rise. 
B)  benefit of reading about economics will fall. 
C)  the opportunity cost of watching TV will rise. 
D)  the opportunity cost of reading economics will rise. 
E)  he will continue to make the same choicE. 
A)  benefit of watching TV will rise. 
B)  benefit of reading about economics will fall. 
C)  the opportunity cost of watching TV will rise. 
D)  the opportunity cost of reading economics will rise. 
E)  he will continue to make the same choicE.

Question 12

Scarcity exists in the world today because

Accepted Answer

A)  human wants and desires are insatiable. 
B)  average households are too poor. 
C)  there is not enough money in the world. 
D)  people always make the wrong choices. 
E)  we are always producing the wrong things. 
A)  human wants and desires are insatiable. 
B)  average households are too poor. 
C)  there is not enough money in the world. 
D)  people always make the wrong choices. 
E)  we are always producing the wrong things.

Question 13

The average cost of 20 units of an activity is the

Accepted Answer

A)  total cost of 20 units of the activity divided by 20. 
B)  20 divided by the total cost of 20 units of the activity. 
C)  extra cost of 20 units of the activity divided by 20. 
D)  reciprocal of the total cost of 20 units of the activity. 
E)  change in total cost of the activity. 
A)  total cost of 20 units of the activity divided by 20. 
B)  20 divided by the total cost of 20 units of the activity. 
C)  extra cost of 20 units of the activity divided by 20. 
D)  reciprocal of the total cost of 20 units of the activity. 
E)  change in total cost of the activity.

Question 14

You have just purchased a car for $20,000 and realized that you still have to pay for insurance,licence,monthly parking and gasoline.The marginal cost of driving an additional kilometre is the additional money that you have to spend on

Accepted Answer

A)  insurance,licence,monthly parking and gasoline. 
B)  insurance,licence,monthly parking and gasoline plus the $20,000 purchase price of the car. 
C)  insurance and licence. 
D)  monthly parking and gasoline. 
E)  gasolinE. 
A)  insurance,licence,monthly parking and gasoline. 
B)  insurance,licence,monthly parking and gasoline plus the $20,000 purchase price of the car. 
C)  insurance and licence. 
D)  monthly parking and gasoline. 
E)  gasolinE.

Question 15

The figure above shows the marginal benefit of additional minutes in a cell-phone plan.The marginal cost is constant at $0.10 per minute.
-It is optimal to buy more cell-phone time as long as

Accepted Answer

A)  marginal benefit exceeds marginal cost. 
B)  marginal cost exceeds marginal benefit. 
C)  average benefit exceeds average cost. 
D)  average cost exceeds average benefit. 
E)  marginal benefit exceeds zero. 
A)  marginal benefit exceeds marginal cost. 
B)  marginal cost exceeds marginal benefit. 
C)  average benefit exceeds average cost. 
D)  average cost exceeds average benefit. 
E)  marginal benefit exceeds zero.

Question 16

A cost that cannot be recovered at the time a decision is being made is termed a(n)

Accepted Answer

A)  marginal cost. 
B)  scarcity cost. 
C)  sunk cost. 
D)  average cost. 
E)  opportunity cost. 
A)  marginal cost. 
B)  scarcity cost. 
C)  sunk cost. 
D)  average cost. 
E)  opportunity cost.

Question 17

When economists say there is no such thing as a free lunch,they mean that

Accepted Answer

A)  we must pay money for everything we get. 
B)  it is against the law to accept goods or services without paying for them. 
C)  when we eat lunch,our time has no value. 
D)  each day we decide to eat lunch is another day we must pay out money. 
E)  every choice we make involves a trade-off. 
A)  we must pay money for everything we get. 
B)  it is against the law to accept goods or services without paying for them. 
C)  when we eat lunch,our time has no value. 
D)  each day we decide to eat lunch is another day we must pay out money. 
E)  every choice we make involves a trade-off.

Question 18

For a given question to be considered an economic question,it would need to involve

Accepted Answer

A)  explicit prices. 
B)  making a choice. 
C)  money and income. 
D)  limited resources. 
E)  limited resources and making a choicE. 
A)  explicit prices. 
B)  making a choice. 
C)  money and income. 
D)  limited resources. 
E)  limited resources and making a choicE.

Question 19

An economic naturalist is described as someone who

Accepted Answer

A)  uses economic arguments to protect forests and wetlands from development. 
B)  has a natural talent for drawing graphs. 
C)  applies economic insights to everyday life. 
D)  studies the process of natural selection in a marginal cost and marginal benefit framework. 
E)  is considered a mainstream economist. 
A)  uses economic arguments to protect forests and wetlands from development. 
B)  has a natural talent for drawing graphs. 
C)  applies economic insights to everyday life. 
D)  studies the process of natural selection in a marginal cost and marginal benefit framework. 
E)  is considered a mainstream economist.

Question 20

A campus organization is holding a lottery to raise money.The cost of a ticket is $2 but the buyer can choose to either receive the prize money all at once or half at the time of the drawing and the remainder in 3 months.To ensure that all buyers do not make the same choice,the structure of the prizes must be such that

Accepted Answer

A)  the amount of the all-at-once prize is smaller. 
B)  the two prizes should be the same amount. 
C)  the total amount of the half and half prize is smaller. 
D)  the amount of the all at once prize is larger. 
E)  the amount of the all at once prize is equal to one half of the total amount of the half and half prizE. 
A)  the amount of the all-at-once prize is smaller. 
B)  the two prizes should be the same amount. 
C)  the total amount of the half and half prize is smaller. 
D)  the amount of the all at once prize is larger. 
E)  the amount of the all at once prize is equal to one half of the total amount of the half and half prizE.

A rational person is someone that

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home. -If the marginal benefit is constant at $350,what is the optimal number of rooms to paint?

Even today,microeconomic concepts developed by ___________ remain influential.

The core problem of economics is

The Latin expression for "all else equal" is ______.

-Which of the costs listed in the table are sunk costs?

The fundamental problem that is studied in economics is that

Deciding to pursue an activity as long as the extra benefits are at least equal to the extra costs defines the

Maria spends her afternoon at the beach,paying $2 to rent a beach umbrella and $10 for food and drinks,rather than going to a movie.The total cost of going to the beach is

Scarcity exists in the world today because

The average cost of 20 units of an activity is the

You have just purchased a car for $20,000 and realized that you still have to pay for insurance,licence,monthly parking and gasoline.The marginal cost of driving an additional kilometre is the additional money that you have to spend on

The figure above shows the marginal benefit of additional minutes in a cell-phone plan.The marginal cost is constant at $0.10 per minute. -It is optimal to buy more cell-phone time as long as

A cost that cannot be recovered at the time a decision is being made is termed a(n)

When economists say there is no such thing as a free lunch,they mean that

For a given question to be considered an economic question,it would need to involve

An economic naturalist is described as someone who

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters

Exam 1: Measuring Macroeconomic Performance: Output and Prices

A rational person is someone that

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home. -If the marginal benefit is constant at $350,what is the optimal number of rooms to paint?

Even today,microeconomic concepts developed by ___________ remain influential.

The core problem of economics is

The Latin expression for "all else equal" is ______.

-Which of the costs listed in the table are sunk costs?

The fundamental problem that is studied in economics is that

Deciding to pursue an activity as long as the extra benefits are at least equal to the extra costs defines the

Maria spends her afternoon at the beach,paying $2 to rent a beach umbrella and $10 for food and drinks,rather than going to a movie.The total cost of going to the beach is

Scarcity exists in the world today because

The average cost of 20 units of an activity is the

You have just purchased a car for $20,000 and realized that you still have to pay for insurance,licence,monthly parking and gasoline.The marginal cost of driving an additional kilometre is the additional money that you have to spend on

The figure above shows the marginal benefit of additional minutes in a cell-phone plan.The marginal cost is constant at $0.10 per minute. -It is optimal to buy more cell-phone time as long as

A cost that cannot be recovered at the time a decision is being made is termed a(n)

When economists say there is no such thing as a free lunch,they mean that

For a given question to be considered an economic question,it would need to involve

An economic naturalist is described as someone who

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters