Question 1

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 2

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.What is the marginal cost of moving up from the 1-colour application to the 3-colour application?

Accepted Answer

A) $35 
B) $40 
C) $80 
D) $175 
A) $35 
B) $40 
C) $80 
D) $175

Question 3

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Accepted Answer

A) there is a positive relationship between laptop prices and quantities purchased by university students. 
B) there is a negative relationship between laptop prices and quantities purchased by university students. 
C) there is a direct relationship between laptop prices and quantities purchased by university students. 
D) there is a one-to-one relationship between laptop prices and quantities purchased by university students. 
A) there is a positive relationship between laptop prices and quantities purchased by university students. 
B) there is a negative relationship between laptop prices and quantities purchased by university students. 
C) there is a direct relationship between laptop prices and quantities purchased by university students. 
D) there is a one-to-one relationship between laptop prices and quantities purchased by university students.

Question 4

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a normative economic statement?

Accepted Answer

A) The price of petrol is too high. 
B) The current high price of petrol is the result of strong worldwide demand. 
C) When the price of petrol rises,the quantity of petrol purchased falls. 
D) When the price of petrol rises,transportation costs rise. 
A) The price of petrol is too high. 
B) The current high price of petrol is the result of strong worldwide demand. 
C) When the price of petrol rises,the quantity of petrol purchased falls. 
D) When the price of petrol rises,transportation costs rise.

Question 6

The highest valued alternative that must be given up to engage in an activity is the definition of

Accepted Answer

A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost. 
A) economic equity. 
B) marginal benefit. 
C) opportunity cost. 
D) marginal cost.

Question 7

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Accepted Answer

A) True 
 B)False

Question 8

Economists assume that individuals

Accepted Answer

A) behave in unpredictable ways. 
B) will never take action to help others. 
C) prefer to live in a society that values fairness above all else. 
D) are rational and respond to incentives. 
A) behave in unpredictable ways. 
B) will never take action to help others. 
C) prefer to live in a society that values fairness above all else. 
D) are rational and respond to incentives.

Question 9

What is equity,and how does it differ from efficiency?

Accepted Answer

Equity refers to the fair distribution o

Question 10

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Accepted Answer

A) True 
 B)False

Question 11

Which of the following generates productive efficiency?

Accepted Answer

A) competition among sellers 
B) competition among buyers 
C) government inspectors 
D) government production rules and regulations 
A) competition among sellers 
B) competition among buyers 
C) government inspectors 
D) government production rules and regulations

Question 12

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Accepted Answer

A) optimization. 
B) efficiency. 
C) trade-off. 
D) equity. 
A) optimization. 
B) efficiency. 
C) trade-off. 
D) equity.

Question 13

Microeconomics is the study of

Accepted Answer

A) how households and firms make choices. 
B) the economy as a whole. 
C) the global economy. 
D) topics such as unemployment,inflation,and economic growth. 
A) how households and firms make choices. 
B) the economy as a whole. 
C) the global economy. 
D) topics such as unemployment,inflation,and economic growth.

Question 14

The relationship between consumer spending and disposable personal income is

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) independent.

Question 15

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40,and he charges $75 for this service.For a total price of $90,DeShawn will also detail the car's engine,a service that adds an additional $20 to the total cost of the package.What is the marginal cost of adding the engine detailing to the basic detailing package?

Accepted Answer

A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time 
A) $20 
B) $30 
C) $60 
D) $60 plus the value of his time

Question 16

What is a mixed economy?

Accepted Answer

A mixed economy is an economy in which m

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Allocative efficiency is achieved when firms produce goods and services

Accepted Answer

A) at the lowest possible cost. 
B) that consumers value most. 
C) at the lowest opportunity cost. 
D) at a marginal cost of zero. 
A) at the lowest possible cost. 
B) that consumers value most. 
C) at the lowest opportunity cost. 
D) at a marginal cost of zero.

Question 19

All economic questions arise from the fact that resources are unlimited.

Accepted Answer

A) True 
 B)False

Question 20

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

Accepted Answer

A) True 
 B)False

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Which of the following is a normative economic statement?

The highest valued alternative that must be given up to engage in an activity is the definition of

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Economists assume that individuals

What is equity,and how does it differ from efficiency?

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Which of the following generates productive efficiency?

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Microeconomics is the study of

The relationship between consumer spending and disposable personal income is

What is a mixed economy?

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

Allocative efficiency is achieved when firms produce goods and services

All economic questions arise from the fact that resources are unlimited.

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

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

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 1: Economics: Foundations and Models

'An increase in the price of petrol will increase the demand for hybrid vehicles.' This statement is an example of a positive economic statement.

Suppose when the price of laptops falls,university students buy more laptops.This implies that

Examining the conditions that could lead to a recession in an economy is an example of a macroeconomics topic.

Which of the following is a normative economic statement?

The highest valued alternative that must be given up to engage in an activity is the definition of

Suppose that to increase sales of hybrid vehicles,auto manufacturers are offering large cash incentives.This is an example of a macroeconomics topic.

Economists assume that individuals

What is equity,and how does it differ from efficiency?

Positive analysis is concerned with 'what ought to be,' while normative analysis is concerned with 'what is.'

Which of the following generates productive efficiency?

The idea that because of scarcity,producing more of one good or service means producing less of another good or service refers to the economic concept of

Microeconomics is the study of

The relationship between consumer spending and disposable personal income is

What is a mixed economy?

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

Allocative efficiency is achieved when firms produce goods and services

All economic questions arise from the fact that resources are unlimited.

Examining the conditions that could lead to unemployment in an economy is an example of a microeconomics topic.

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

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters