Question 1

If a campus organization provides a free lunch to all students who show up,then

Accepted Answer

A)  the scarcity problem has been violated. 
B)  the scarcity problem still applies to the decision to allocate the time to go and eat. 
C)  the lunch is completely without cost. 
D)  no trade-offs are involved. 
E)  it is a free lunch because no price was charged. 
A)  the scarcity problem has been violated. 
B)  the scarcity problem still applies to the decision to allocate the time to go and eat. 
C)  the lunch is completely without cost. 
D)  no trade-offs are involved. 
E)  it is a free lunch because no price was charged.

Question 2

The extra benefit that comes from an extra unit of activity is called the _________ of the activity.

Accepted Answer

A)  benefit 
B)  marginal benefit 
C)  marginal cost 
D)  average benefit 
E)  reservation benefit 
A)  benefit 
B)  marginal benefit 
C)  marginal cost 
D)  average benefit 
E)  reservation benefit

Question 3

The Scottish economist who wrote "The Wealth of Nations" was ______________

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 following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
-From the second unit of activity,the marginal benefit exceeds the marginal cost by

Accepted Answer

A)  $10. 
B)  $20. 
C)  $40. 
D)  $50. 
E)  $150. 
A)  $10. 
B)  $20. 
C)  $40. 
D)  $50. 
E)  $150.

Question 5

The focus of microeconomics is the study of

Accepted Answer

A)  national economies. 
B)  trends in consumer purchases. 
C)  the total value of national output. 
D)  individuals and firms. 
E)  the determinants of the unemployment ratE. 
A)  national economies. 
B)  trends in consumer purchases. 
C)  the total value of national output. 
D)  individuals and firms. 
E)  the determinants of the unemployment ratE.

Question 6

Imagine a world with unlimited resources,including time.On that planet,

Accepted Answer

A)  personal strife would not exist. 
B)  the scarcity problem would not apply but the cost-benefit principle would. 
C)  the cost-benefit principle would be irrelevant because trade-offs would be unnecessary. 
D)  the scarcity problem would still apply. 
E)  the discipline of economics would be more important. 
A)  personal strife would not exist. 
B)  the scarcity problem would not apply but the cost-benefit principle would. 
C)  the cost-benefit principle would be irrelevant because trade-offs would be unnecessary. 
D)  the scarcity problem would still apply. 
E)  the discipline of economics would be more important.

Question 7

The Third Wave Computer Company employs Sally to assemble personal computers.Sally can assemble 1 computer if she works 1 hour,4 computers in 2 hours,7 computers in 3 hours,9 computers in 4 hours,and 10 computers in 5 hours.The cost of parts is $700 per computer,and the cost of employing Sally is $50 per hour.What is the marginal cost of producing the three computers Sally assembles during her second hour of work?

Accepted Answer

A)  $2,150. 
B)  $2,850. 
C)  $2,800. 
D)  $700. 
E)  $750. 
A)  $2,150. 
B)  $2,850. 
C)  $2,800. 
D)  $700. 
E)  $750.

Question 8

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
  
-If the activity in question is annual skiing trips for an expert skier,which of the following is the most appropriate example for Cost B?

Accepted Answer

A)  Ski-lift tickets at different resorts. 
B)  Money spent on a new ski outfit. 
C)  A new ski hat. 
D)  Wages that the ski resort spent on ski-lift operators. 
E)  Expenses on a winter tune up for the skier's car. 
A)  Ski-lift tickets at different resorts. 
B)  Money spent on a new ski outfit. 
C)  A new ski hat. 
D)  Wages that the ski resort spent on ski-lift operators. 
E)  Expenses on a winter tune up for the skier's car.

Question 9

Macroeconomics differs from microeconomics in that

Accepted Answer

A)  the concept of scarcity applies to the latter but does not apply to the former. 
B)  the latter studies individual markets while the former studies groups of markets,including the whole economy. 
C)  rational decisions are relevant to the former but not the latter. 
D)  the former is the study of how people make choices under conditions of scarcity while the latter is concerned with the results of those choices for society. 
E)  the former explains such concepts as how prices are determined in markets while the latter explains the overall price level. 
A)  the concept of scarcity applies to the latter but does not apply to the former. 
B)  the latter studies individual markets while the former studies groups of markets,including the whole economy. 
C)  rational decisions are relevant to the former but not the latter. 
D)  the former is the study of how people make choices under conditions of scarcity while the latter is concerned with the results of those choices for society. 
E)  the former explains such concepts as how prices are determined in markets while the latter explains the overall price level.

Question 10

-The marginal benefit (extra donations)of the 2nd employee is

Accepted Answer

A)  $42,426. 
B)  $21,213. 
C)  $12,426. 
D)  $11,337. 
E)  $9,766. 
A)  $42,426. 
B)  $21,213. 
C)  $12,426. 
D)  $11,337. 
E)  $9,766.

Question 11

To avoid the fallacy of composition,one must recognize that

Accepted Answer

A)  what is true for a part must also be true for the whole. 
B)  what is true for a part is not necessarily true for the whole. 
C)  because one event precedes another,the first event necessarily caused the second. 
D)  because one event precedes another,the first event did not necessarily cause the second. 
E)  correlation implies causation. 
A)  what is true for a part must also be true for the whole. 
B)  what is true for a part is not necessarily true for the whole. 
C)  because one event precedes another,the first event necessarily caused the second. 
D)  because one event precedes another,the first event did not necessarily cause the second. 
E)  correlation implies causation.

Question 12

Monica has purchased a $25 ticket to attend a concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should

Accepted Answer

A)  include only the entertainment value of the concert in the opportunity cost of going on the date. 
B)  include the cost of the ticket plus the entertainment value of the concert in the opportunity cost of going on the date. 
C)  include only the cost of the concert ticket in the opportunity cost of going on the date. 
D)  include neither the cost of the ticket nor the entertainment value of the concert in the opportunity cost of going on the date. 
E)  include the amount her date is likely to spend on dinner and dancing in the opportunity cost of going on the datE. 
A)  include only the entertainment value of the concert in the opportunity cost of going on the date. 
B)  include the cost of the ticket plus the entertainment value of the concert in the opportunity cost of going on the date. 
C)  include only the cost of the concert ticket in the opportunity cost of going on the date. 
D)  include neither the cost of the ticket nor the entertainment value of the concert in the opportunity cost of going on the date. 
E)  include the amount her date is likely to spend on dinner and dancing in the opportunity cost of going on the datE.

Question 13

After studying tap dancing for three years,Dan gave up the idea of becoming a professional dancer and immediately started to study economics two years ago.He has decided that economics is for him and he would like to make a career out of his economics studies.Which of the following is true?

Accepted Answer

A)  The three years spent in tap dancing was a marginal cost in his economics career. 
B)  The three years spent in tap dancing was an average cost in his economics career. 
C)  The three years spent in tap dancing was a sunk cost in his economics career. 
D)  The five years spent in studying economics and tap dancing was an average cost in his economics career. 
E)  The five years spent in studying economics and tap dancing was a marginal cost in his economics career. 
A)  The three years spent in tap dancing was a marginal cost in his economics career. 
B)  The three years spent in tap dancing was an average cost in his economics career. 
C)  The three years spent in tap dancing was a sunk cost in his economics career. 
D)  The five years spent in studying economics and tap dancing was an average cost in his economics career. 
E)  The five years spent in studying economics and tap dancing was a marginal cost in his economics career.

Question 14

Which of the following questions would NOT be part of macroeconomics?

Accepted Answer

A)  What caused the Great Depression? 
B)  At what rate does the Canadian economy typically grow? 
C)  Did the sharp increase in gasoline prices alter SUV sales? 
D)  How does government spending affect the economy? 
E)  Do trends exist in the national rate of unemployment? 
A)  What caused the Great Depression? 
B)  At what rate does the Canadian economy typically grow? 
C)  Did the sharp increase in gasoline prices alter SUV sales? 
D)  How does government spending affect the economy? 
E)  Do trends exist in the national rate of unemployment?

Question 15

-The average benefit (average donation)with 4 employees is

Accepted Answer

A)  $13,222. 
B)  $15,000. 
C)  $16,748. 
D)  $18,883. 
E)  $19,915. 
A)  $13,222. 
B)  $15,000. 
C)  $16,748. 
D)  $18,883. 
E)  $19,915.

Question 16

Benny has one hour before bedtime and he can either watch TV or listen to a new CD.He chooses to listen to the CD.The scarcity problem's influence on Benny is seen in

Accepted Answer

A)  the decision to listen to music. 
B)  the decision not to watch TV. 
C)  the fixed amount of time before bed. 
D)  the decision to choose between TV and music. 
E)  Benny's taste in music. 
A)  the decision to listen to music. 
B)  the decision not to watch TV. 
C)  the fixed amount of time before bed. 
D)  the decision to choose between TV and music. 
E)  Benny's taste in music.

Question 17

When economists make predictions using the framework of a given economic model,it is usually based on

Accepted Answer

A)  personal experiences. 
B)  important relationships between particular variables. 
C)  mathematical abstractions. 
D)  political implications. 
E)  the profit-maximizing objectivE. 
A)  personal experiences. 
B)  important relationships between particular variables. 
C)  mathematical abstractions. 
D)  political implications. 
E)  the profit-maximizing objectivE.

Question 18

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.
-The opportunity cost of watching TV is __________ and the opportunity cost of reading about economics is __________.

Accepted Answer

A)  20;30 
B)  0;0 
C)  30;20 
D)  -20;-30 
E)  indeterminate;indeterminate 
A)  20;30 
B)  0;0 
C)  30;20 
D)  -20;-30 
E)  indeterminate;indeterminate

Question 19

The concept of scarcity applies both to Bill Gates and a homeless person because

Accepted Answer

A)  both have the same legal rights. 
B)  they have the same access to the markets for goods and services. 
C)  there are only 24 hours in the day for both of them. 
D)  they are both consumers. 
E)  both must breathe air in order to livE. 
A)  both have the same legal rights. 
B)  they have the same access to the markets for goods and services. 
C)  there are only 24 hours in the day for both of them. 
D)  they are both consumers. 
E)  both must breathe air in order to livE.

Question 20

With banking machines,it is possible to retrieve cash from the bank at any time.100 years ago,one could only get cash from the bank during business hours,say,9 am to 3 pm.The difference is because

Accepted Answer

A)  flexibility was not valued 100 years ago. 
B)  it was impossible to provide 24 hour a day service 100 years ago. 
C)  the cost of providing 24 hour a day service is much lower today. 
D)  the government forced banks to become more convenient. 
E)  cash is a more popular means of making payments today. 
A)  flexibility was not valued 100 years ago. 
B)  it was impossible to provide 24 hour a day service 100 years ago. 
C)  the cost of providing 24 hour a day service is much lower today. 
D)  the government forced banks to become more convenient. 
E)  cash is a more popular means of making payments today.

If a campus organization provides a free lunch to all students who show up,then

The extra benefit that comes from an extra unit of activity is called the _________ of the activity.

The Scottish economist who wrote "The Wealth of Nations" was ______________

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity -From the second unit of activity,the marginal benefit exceeds the marginal cost by

The focus of microeconomics is the study of

Imagine a world with unlimited resources,including time.On that planet,

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity -If the activity in question is annual skiing trips for an expert skier,which of the following is the most appropriate example for Cost B?

Macroeconomics differs from microeconomics in that

-The marginal benefit (extra donations)of the 2^nd employee is

To avoid the fallacy of composition,one must recognize that

Monica has purchased a $25 ticket to attend a concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should

After studying tap dancing for three years,Dan gave up the idea of becoming a professional dancer and immediately started to study economics two years ago.He has decided that economics is for him and he would like to make a career out of his economics studies.Which of the following is true?

Which of the following questions would NOT be part of macroeconomics?

-The average benefit (average donation)with 4 employees is

Benny has one hour before bedtime and he can either watch TV or listen to a new CD.He chooses to listen to the CD.The scarcity problem's influence on Benny is seen in

When economists make predictions using the framework of a given economic model,it is usually based on

The concept of scarcity applies both to Bill Gates and a homeless person because

With banking machines,it is possible to retrieve cash from the bank at any time.100 years ago,one could only get cash from the bank during business hours,say,9 am to 3 pm.The difference is because

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

If a campus organization provides a free lunch to all students who show up,then

The extra benefit that comes from an extra unit of activity is called the _________ of the activity.

The Scottish economist who wrote "The Wealth of Nations" was ______________

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity -From the second unit of activity,the marginal benefit exceeds the marginal cost by

The focus of microeconomics is the study of

Imagine a world with unlimited resources,including time.On that planet,

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity -If the activity in question is annual skiing trips for an expert skier,which of the following is the most appropriate example for Cost B?

Macroeconomics differs from microeconomics in that

-The marginal benefit (extra donations)of the 2nd employee is

To avoid the fallacy of composition,one must recognize that

Monica has purchased a $25 ticket to attend a concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should

After studying tap dancing for three years,Dan gave up the idea of becoming a professional dancer and immediately started to study economics two years ago.He has decided that economics is for him and he would like to make a career out of his economics studies.Which of the following is true?

Which of the following questions would NOT be part of macroeconomics?

-The average benefit (average donation)with 4 employees is

Benny has one hour before bedtime and he can either watch TV or listen to a new CD.He chooses to listen to the CD.The scarcity problem's influence on Benny is seen in

When economists make predictions using the framework of a given economic model,it is usually based on

The concept of scarcity applies both to Bill Gates and a homeless person because

With banking machines,it is possible to retrieve cash from the bank at any time.100 years ago,one could only get cash from the bank during business hours,say,9 am to 3 pm.The difference is because

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

-The marginal benefit (extra donations)of the 2^nd employee is