Question 1

What is a model?

Accepted Answer

A)  a theoretical abstraction with very little value 
B)  a useful tool to only the ones who constructed it 
C)  a realistic and carefully constructed theory 
D)  a simplification of real life 
A)  a theoretical abstraction with very little value 
B)  a useful tool to only the ones who constructed it 
C)  a realistic and carefully constructed theory 
D)  a simplification of real life D

Question 2

Figure 2-3  
-Refer to Figure 2-3.Which point represents the maximum possible production of tubas?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point E D

Question 3

Using this outline,draw a circular-flow diagram representing the interactions between households and firms in a simple economy.Explain briefly the various parts of the diagram.

Accepted Answer

This diagram should duplicate the essential characteristics of the diagram in the text,with an explanation of the meaning of each flow and each market.It is important that the student understands that the inner loop represents the flow of real goods and services and that the outer loop represents the corresponding flow of payments.

Question 4

Figure 2-2  
-Refer to Figure 2-2.What do boxes C and D represent?

Accepted Answer

A)  households and firms 
B)  the goods and services market and the factors of production market 
C)  the goods and services market and the financial market 
D)  government and foreign trade 
A)  households and firms 
B)  the goods and services market and the factors of production market 
C)  the goods and services market and the financial market 
D)  government and foreign trade

Question 5

Figure 2-7  
-Refer to Figure 2-7.What would most likely have caused the production possibilities frontier to shift outward from A to B?

Accepted Answer

A)  an increase in resources necessary to produce capital goods 
B)  an improvement in the technology of producing consumer goods 
C)  an increase in the overall level of technology in the economy 
D)  an increase in opportunity cost 
A)  an increase in resources necessary to produce capital goods 
B)  an improvement in the technology of producing consumer goods 
C)  an increase in the overall level of technology in the economy 
D)  an increase in opportunity cost

Question 6

Which statement about slope is NOT correct?

Accepted Answer

A)  Slope explains how much one variable responds to changes in another variable. 
B)  Slope can be computed by delta x divided by delta y. 
C)  Slope is positive if the two variables are moving in the same direction. 
D)  Slope does not change if the line is linear. 
A)  Slope explains how much one variable responds to changes in another variable. 
B)  Slope can be computed by delta x divided by delta y. 
C)  Slope is positive if the two variables are moving in the same direction. 
D)  Slope does not change if the line is linear.

Question 7

What does evaluating a positive statement involve?

Accepted Answer

A)  evaluating values as well as facts 
B)  examining evidence 
C)  evaluating the correctness of the statement 
D)  consideration of the government's policy goals 
A)  evaluating values as well as facts 
B)  examining evidence 
C)  evaluating the correctness of the statement 
D)  consideration of the government's policy goals

Question 8

Figure 2-3  
-Refer to Figure 2-3.Which point or points are efficient?

Accepted Answer

A)  points B and E 
B)  points A,B,and E 
C)  point C 
D)  point D 
A)  points B and E 
B)  points A,B,and E 
C)  point C 
D)  point D

Question 9

Bill has noticed that increases in unemployment insurance claims are associated with recessions,and therefore advocates limits on unemployment insurance so as to prevent recessions.Martha has noticed that most drug addicts once attended schools,and therefore advocates getting rid of schools so as to prevent drug addiction.What do we know about the reasoning of Bill and Martha?

Accepted Answer

A)  The reasoning of both Bill and Martha suffers from the omitted variable problem. 
B)  The reasoning of both Bill and Martha suffers from the reverse causality problem. 
C)  Bill's reasoning suffers from the reverse causality problem,and Martha's reasoning suffers from the omitted variable problem. 
D)  Martha's reasoning suffers from the reverse causality problem,and Bill's reasoning suffers from the omitted variable problem. 
A)  The reasoning of both Bill and Martha suffers from the omitted variable problem. 
B)  The reasoning of both Bill and Martha suffers from the reverse causality problem. 
C)  Bill's reasoning suffers from the reverse causality problem,and Martha's reasoning suffers from the omitted variable problem. 
D)  Martha's reasoning suffers from the reverse causality problem,and Bill's reasoning suffers from the omitted variable problem.

Question 10

In a simple circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Accepted Answer

A) True 
 B)False

Question 11

Figure 2-10  
-Refer to Figure 2-10 .What are the curves shown?

Accepted Answer

A)  supply curves 
B)  demand curves 
C)  preference curves 
D)  income-consumption curves 
A)  supply curves 
B)  demand curves 
C)  preference curves 
D)  income-consumption curves

Question 12

Which statement is the best explanation for why policies such as rent control and import quotas persist in spite of the fact that experts are united in their opposition to such policies?

Accepted Answer

A)  Economists have not yet convinced the general public that the policies are undesirable. 
B)  Economists are simply wrong about the economic impact of these policies. 
C)  Economists have different values than do most people. 
D)  Economists are usually of a different political party than are lawmakers. 
A)  Economists have not yet convinced the general public that the policies are undesirable. 
B)  Economists are simply wrong about the economic impact of these policies. 
C)  Economists have different values than do most people. 
D)  Economists are usually of a different political party than are lawmakers.

Question 13

Sir Isaac Newton developed the theory of gravity after observing an apple fall from a tree.What is this an example of?

Accepted Answer

A)  a controlled experiment used to develop scientific theory 
B)  being in the right place at the right time 
C)  a natural consequence 
D)  the interplay between observation and theory in science 
A)  a controlled experiment used to develop scientific theory 
B)  being in the right place at the right time 
C)  a natural consequence 
D)  the interplay between observation and theory in science

Question 14

What two broad subfields is the field of economics traditionally divided into?

Accepted Answer

A)  national economics and international economics 
B)  consumer economics and producer economics 
C)  private sector economics and public sector economics 
D)  microeconomics and macroeconomics 
A)  national economics and international economics 
B)  consumer economics and producer economics 
C)  private sector economics and public sector economics 
D)  microeconomics and macroeconomics

Question 15

How would any economist who says all policy decisions are easy be best described?

Accepted Answer

A)  They must understand the relationship between a market economy and the government. 
B)  They must be a qualified policy adviser. 
C)  They have a Ph.D.in economics. 
D)  They cannot be trusted. 
A)  They must understand the relationship between a market economy and the government. 
B)  They must be a qualified policy adviser. 
C)  They have a Ph.D.in economics. 
D)  They cannot be trusted.

Question 16

Why are production possibilities frontiers usually bowed outward?

Accepted Answer

A)  constant opportunity cost 
B)  increasing opportunity cost 
C)  decreasing opportunity cost 
D)  increasing productivity 
A)  constant opportunity cost 
B)  increasing opportunity cost 
C)  decreasing opportunity cost 
D)  increasing productivity

Question 17

Two economists,Adam and Joan,are discussing the possibility of substantially reforming the current federal tax system.Adam thinks the current system is fine,but Joan is in favour of reform.Which statement is the least likely explanation for the disagreement?

Accepted Answer

A)  Adam is a positive economist,and Joan is a normative economist. 
B)  Adam and Joan have different positive views about the effect of changing the tax system. 
C)  Adam and Joan have different values,and so they have different normative views about policy. 
D)  Adam is better off under the current system,and Joan would be better off if the reforms were implemented. 
A)  Adam is a positive economist,and Joan is a normative economist. 
B)  Adam and Joan have different positive views about the effect of changing the tax system. 
C)  Adam and Joan have different values,and so they have different normative views about policy. 
D)  Adam is better off under the current system,and Joan would be better off if the reforms were implemented.

Question 18

What does The Bank of Canada do?

Accepted Answer

A)  designs tax policy 
B)  enforces the country's antitrust laws 
C)  sets the country's monetary policy 
D)  analyzes the data on workers 
A)  designs tax policy 
B)  enforces the country's antitrust laws 
C)  sets the country's monetary policy 
D)  analyzes the data on workers

Question 19

What do economists at the Canadian International Development Agency do?

Accepted Answer

A)  give advice on overseas development projects 
B)  collect data to help other economists 
C)  help formulate labour market policies 
D)  assess temporary foreign worker programs 
A)  give advice on overseas development projects 
B)  collect data to help other economists 
C)  help formulate labour market policies 
D)  assess temporary foreign worker programs

Question 20

In what region of the production possibilities frontier can an economy produce?

Accepted Answer

A)  An economy can produce only on the production possibilities frontier. 
B)  An economy can produce at any point inside or outside the production possibilities frontier. 
C)  An economy can produce at any point on or inside the production possibilities frontier,but not outside the frontier. 
D)  An economy can produce at any point inside the production possibilities frontier,but not on or outside the frontier. 
A)  An economy can produce only on the production possibilities frontier. 
B)  An economy can produce at any point inside or outside the production possibilities frontier. 
C)  An economy can produce at any point on or inside the production possibilities frontier,but not outside the frontier. 
D)  An economy can produce at any point inside the production possibilities frontier,but not on or outside the frontier.

What is a model?

Figure 2-3 -Refer to Figure 2-3.Which point represents the maximum possible production of tubas?

Using this outline,draw a circular-flow diagram representing the interactions between households and firms in a simple economy.Explain briefly the various parts of the diagram.

Figure 2-2 -Refer to Figure 2-2.What do boxes C and D represent?

Figure 2-7 -Refer to Figure 2-7.What would most likely have caused the production possibilities frontier to shift outward from A to B?

Which statement about slope is NOT correct?

What does evaluating a positive statement involve?

Figure 2-3 -Refer to Figure 2-3.Which point or points are efficient?

In a simple circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Figure 2-10 -Refer to Figure 2-10 .What are the curves shown?

Which statement is the best explanation for why policies such as rent control and import quotas persist in spite of the fact that experts are united in their opposition to such policies?

Sir Isaac Newton developed the theory of gravity after observing an apple fall from a tree.What is this an example of?

What two broad subfields is the field of economics traditionally divided into?

How would any economist who says all policy decisions are easy be best described?

Why are production possibilities frontiers usually bowed outward?

Two economists,Adam and Joan,are discussing the possibility of substantially reforming the current federal tax system.Adam thinks the current system is fine,but Joan is in favour of reform.Which statement is the least likely explanation for the disagreement?

What does The Bank of Canada do?

What do economists at the Canadian International Development Agency do?

In what region of the production possibilities frontier can an economy produce?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 2: Thinking Like an Economist

What is a model?

Figure 2-3 -Refer to Figure 2-3.Which point represents the maximum possible production of tubas?

Using this outline,draw a circular-flow diagram representing the interactions between households and firms in a simple economy.Explain briefly the various parts of the diagram.

Figure 2-2 -Refer to Figure 2-2.What do boxes C and D represent?

Figure 2-7 -Refer to Figure 2-7.What would most likely have caused the production possibilities frontier to shift outward from A to B?

Which statement about slope is NOT correct?

What does evaluating a positive statement involve?

Figure 2-3 -Refer to Figure 2-3.Which point or points are efficient?

In a simple circular-flow diagram,the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Figure 2-10 -Refer to Figure 2-10 .What are the curves shown?

Which statement is the best explanation for why policies such as rent control and import quotas persist in spite of the fact that experts are united in their opposition to such policies?

Sir Isaac Newton developed the theory of gravity after observing an apple fall from a tree.What is this an example of?

What two broad subfields is the field of economics traditionally divided into?

How would any economist who says all policy decisions are easy be best described?

Why are production possibilities frontiers usually bowed outward?

Two economists,Adam and Joan,are discussing the possibility of substantially reforming the current federal tax system.Adam thinks the current system is fine,but Joan is in favour of reform.Which statement is the least likely explanation for the disagreement?

What does The Bank of Canada do?

What do economists at the Canadian International Development Agency do?

In what region of the production possibilities frontier can an economy produce?

Ten Principles of Economics

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters