Question 1

(The following economy produces two products. )
Production Possibilities Table
  
-Refer to the above table.A change from possibility C to B means that:

Accepted Answer

A)  1 unit of steel is given up to get 75 units of wheat. 
B)  2 units of steel are given up to get 75 units of wheat. 
C)  1 unit of steel is given up to get 15 more units of wheat. 
D)  2 units of steel are given up to get 15 more units of wheat. 
A)  1 unit of steel is given up to get 75 units of wheat. 
B)  2 units of steel are given up to get 75 units of wheat. 
C)  1 unit of steel is given up to get 15 more units of wheat. 
D)  2 units of steel are given up to get 15 more units of wheat.

Question 2

-Answer on the basis of the relationships shown in the above four figures.The amount of Y is directly related to the amount of X in:

Accepted Answer

A)  both 1 and 3. 
B)  both 1 and 2. 
C)  2 only. 
D)  l only. 
A)  both 1 and 3. 
B)  both 1 and 2. 
C)  2 only. 
D)  l only.

Question 3

Refer to the following production possibilities curves.Curve (a)is the current curve for the economy.Given production possibilities curve (a),the combination of capital and consumer goods indicated by point L:

Accepted Answer

A)  would entail substantial unemployment. 
B)  would entail an inefficient use of society's resources. 
C)  is beyond the productive capacity of this society. 
D)  suggests the productive capacity of the system is declining. 
A)  would entail substantial unemployment. 
B)  would entail an inefficient use of society's resources. 
C)  is beyond the productive capacity of this society. 
D)  suggests the productive capacity of the system is declining.

Question 4

Opportunity cost is best defined as:

Accepted Answer

A)  the monetary price of any productive resource. 
B)  the amount of labour which must be used to produce one unit of any product. 
C)  the ratio of the prices of imported goods to the prices of exported goods. 
D)  the amount of one product which must be given up to produce one more unit of another product. 
A)  the monetary price of any productive resource. 
B)  the amount of labour which must be used to produce one unit of any product. 
C)  the ratio of the prices of imported goods to the prices of exported goods. 
D)  the amount of one product which must be given up to produce one more unit of another product.

Question 5

(The following economy produces two products. )
Production Possibilities Table
  
-The production possibilities curve represents which of the following?

Accepted Answer

A)  the amount of goods attainable with variable resources 
B)  the maximum amount of goods attainable with variable resources 
C)  maximum combinations of goods attainable with fixed resources 
D)  the amount of goods attainable if prices decline 
A)  the amount of goods attainable with variable resources 
B)  the maximum amount of goods attainable with variable resources 
C)  maximum combinations of goods attainable with fixed resources 
D)  the amount of goods attainable if prices decline

Question 6

Any combination of goods lying outside of the budget line:

Accepted Answer

A)  implies that the consumer is not spending all of his income. 
B)  yields less utility than any point on the budget line. 
C)  yields less utility than any point inside the budget line. 
D)  is unattainable,given the consumer's income. 
A)  implies that the consumer is not spending all of his income. 
B)  yields less utility than any point on the budget line. 
C)  yields less utility than any point inside the budget line. 
D)  is unattainable,given the consumer's income.

Question 7

Which of the following is assumed in constructing a typical production possibilities curve?

Accepted Answer

A)  the economy is using its resources inefficiently. 
B)  resources are perfectly shiftable among alternative uses. 
C)  production technology is fixed. 
D)  the economy is engaging in international trade. 
A)  the economy is using its resources inefficiently. 
B)  resources are perfectly shiftable among alternative uses. 
C)  production technology is fixed. 
D)  the economy is engaging in international trade.

Question 8

Which of the following is real capital?

Accepted Answer

A)  a pair of stockings 
B)  a dump truck 
C)  a savings account 
D)  a share of TD Bank stock 
A)  a pair of stockings 
B)  a dump truck 
C)  a savings account 
D)  a share of TD Bank stock

Question 9

-Refer to the above diagram.Starting at point E,the production of successive units of bread will cost:

Accepted Answer

A)  a constant 8 units of tractors. 
B)  a constant 6 units of tractors. 
C)  1/8,1/6,1/4,and 1/2 units of tractors. 
D)  1/2,1/4,1/6,and 1/8 units of tractors. 
A)  a constant 8 units of tractors. 
B)  a constant 6 units of tractors. 
C)  1/8,1/6,1/4,and 1/2 units of tractors. 
D)  1/2,1/4,1/6,and 1/8 units of tractors.

Question 10

You should decide to go to a movie:

Accepted Answer

A)  if the marginal cost of the movie exceeds its marginal benefit. 
B)  if the marginal benefit of the movie exceeds its marginal cost. 
C)  if your income will allow you to buy a ticket 
D)  because movies are inherently good products. 
A)  if the marginal cost of the movie exceeds its marginal benefit. 
B)  if the marginal benefit of the movie exceeds its marginal cost. 
C)  if your income will allow you to buy a ticket 
D)  because movies are inherently good products.

Question 11

A point inside the production possibilities curve is:

Accepted Answer

A)  attainable and the economy is efficient. 
B)  attainable,but the economy is inefficient. 
C)  unattainable,but the economy is inefficient. 
D)  unattainable and the economy is efficient. 
A)  attainable and the economy is efficient. 
B)  attainable,but the economy is inefficient. 
C)  unattainable,but the economy is inefficient. 
D)  unattainable and the economy is efficient.

Question 12

The law of increasing opportunity costs states that:

Accepted Answer

A)  if society wants to produce more of a particular good,it must sacrifice larger and larger amounts of other goods to do so. 
B)  the sum of the costs of producing a particular good cannot rise above the current market price of that good. 
C)  if the sum of the costs of producing a particular good rises by a specified percent,the price of that good must rise by a greater relative amount. 
D)  if the prices of all the resources devoted to the production of goods increase,the cost of producing any particular good will increase at the same rate. 
A)  if society wants to produce more of a particular good,it must sacrifice larger and larger amounts of other goods to do so. 
B)  the sum of the costs of producing a particular good cannot rise above the current market price of that good. 
C)  if the sum of the costs of producing a particular good rises by a specified percent,the price of that good must rise by a greater relative amount. 
D)  if the prices of all the resources devoted to the production of goods increase,the cost of producing any particular good will increase at the same rate.

Question 13

-Refer to the above diagram.The slope of the line:

Accepted Answer

A)  is - 1/4. 
B)  is + 1/4. 
C)  is .40. 
D)  cannot be determined from the information given. 
A)  is - 1/4. 
B)  is + 1/4. 
C)  is .40. 
D)  cannot be determined from the information given.

Question 14

The measured slope of a line:

Accepted Answer

A)  is independent of how the two variables are denominated. 
B)  will be affected by how the two variables are denominated. 
C)  necessarily diminishes as one moves rightward on the line. 
D)  necessarily increases as one moves rightward on the line. 
A)  is independent of how the two variables are denominated. 
B)  will be affected by how the two variables are denominated. 
C)  necessarily diminishes as one moves rightward on the line. 
D)  necessarily increases as one moves rightward on the line.

Question 15

The price ratio of the two products is the:

Accepted Answer

A)  marginal rate of substitution. 
B)  slope of the budget line. 
C)  point of tangency for equilibrium. 
D)  elasticity of demand for the two products. 
A)  marginal rate of substitution. 
B)  slope of the budget line. 
C)  point of tangency for equilibrium. 
D)  elasticity of demand for the two products.

Question 16

Which of the following is associated with macroeconomics?

Accepted Answer

A)  an examination of the incomes of the University of Toronto Business School graduates 
B)  an empirical investigation of the general price level and unemployment rates in the 2000s 
C)  a study of the trend of pecan prices since World War II 
D)  a case study of pricing and production in the textbook industry 
A)  an examination of the incomes of the University of Toronto Business School graduates 
B)  an empirical investigation of the general price level and unemployment rates in the 2000s 
C)  a study of the trend of pecan prices since World War II 
D)  a case study of pricing and production in the textbook industry

Question 17

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)  Customers select the shortest line because they have perfect information. 
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food. 
C)  Lines will typically be of unequal length because of the inefficiencies in counter service. 
D)  The set of food choices is often too complex for most customers and thus creates long lines. 
A)  Customers select the shortest line because they have perfect information. 
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food. 
C)  Lines will typically be of unequal length because of the inefficiencies in counter service. 
D)  The set of food choices is often too complex for most customers and thus creates long lines.

Question 18

If the equation y = 15 - 4x was plotted,the:

Accepted Answer

A)  vertical intercept would be -4. 
B)  vertical intercept would be +4. 
C)  vertical intercept would be +9. 
D)  slope would be -4. 
A)  vertical intercept would be -4. 
B)  vertical intercept would be +4. 
C)  vertical intercept would be +9. 
D)  slope would be -4.

Question 19

The production possibilities curve tells us:

Accepted Answer

A)  what specific combinations of two products is most desired by society. 
B)  that costs do not change as society varies its output. 
C)  costs are irrelevant in a society which has fixed resources. 
D)  what combinations of two goods can be produced with society's available resources. 
A)  what specific combinations of two products is most desired by society. 
B)  that costs do not change as society varies its output. 
C)  costs are irrelevant in a society which has fixed resources. 
D)  what combinations of two goods can be produced with society's available resources.

Question 20

Refer to the diagram below.The concave shape of each production possibilities curve indicates that:

Accepted Answer

A)  resources are perfectly substitutable. 
B)  wants are virtually unlimited. 
C)  prices are constant. 
D)  resources are not equally suited for alternative uses. 
A)  resources are perfectly substitutable. 
B)  wants are virtually unlimited. 
C)  prices are constant. 
D)  resources are not equally suited for alternative uses.

(The following economy produces two products. ) Production Possibilities Table -Refer to the above table.A change from possibility C to B means that:

-Answer on the basis of the relationships shown in the above four figures.The amount of Y is directly related to the amount of X in:

Refer to the following production possibilities curves.Curve (a)is the current curve for the economy.Given production possibilities curve (a),the combination of capital and consumer goods indicated by point L:

Opportunity cost is best defined as:

(The following economy produces two products. ) Production Possibilities Table -The production possibilities curve represents which of the following?

Any combination of goods lying outside of the budget line:

Which of the following is assumed in constructing a typical production possibilities curve?

Which of the following is real capital?

-Refer to the above diagram.Starting at point E,the production of successive units of bread will cost:

You should decide to go to a movie:

A point inside the production possibilities curve is:

The law of increasing opportunity costs states that:

-Refer to the above diagram.The slope of the line:

The measured slope of a line:

The price ratio of the two products is the:

Which of the following is associated with macroeconomics?

How is the economic perspective reflected in lines for fast food?

If the equation y = 15 - 4x was plotted,the:

The production possibilities curve tells us:

Refer to the diagram below.The concave shape of each production possibilities curve indicates that:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

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Exam 1: Limits, Alternatives, and Choices

(The following economy produces two products. ) Production Possibilities Table -Refer to the above table.A change from possibility C to B means that:

-Answer on the basis of the relationships shown in the above four figures.The amount of Y is directly related to the amount of X in:

Refer to the following production possibilities curves.Curve (a)is the current curve for the economy.Given production possibilities curve (a),the combination of capital and consumer goods indicated by point L:

Opportunity cost is best defined as:

(The following economy produces two products. ) Production Possibilities Table -The production possibilities curve represents which of the following?

Any combination of goods lying outside of the budget line:

Which of the following is assumed in constructing a typical production possibilities curve?

Which of the following is real capital?

-Refer to the above diagram.Starting at point E,the production of successive units of bread will cost:

You should decide to go to a movie:

A point inside the production possibilities curve is:

The law of increasing opportunity costs states that:

-Refer to the above diagram.The slope of the line:

The measured slope of a line:

The price ratio of the two products is the:

Which of the following is associated with macroeconomics?

How is the economic perspective reflected in lines for fast food?

If the equation y = 15 - 4x was plotted,the:

The production possibilities curve tells us:

Refer to the diagram below.The concave shape of each production possibilities curve indicates that:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters