Question 1

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Accepted Answer

A) how something will be produced;when something will be produced 
B) when something will be produced;why something will be produced 
C) why something will be produced;what will be produced 
D) what will be produced;how something will be produced 
A) how something will be produced;when something will be produced 
B) when something will be produced;why something will be produced 
C) why something will be produced;what will be produced 
D) what will be produced;how something will be produced

Question 2

Explain the economic assumption that 'people are rational.'

Accepted Answer

'People are rational' means that economi

Question 3

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Accepted Answer

A) True 
 B)False

Question 4

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 Allison's marginal benefit if she sells a basic 1-colour job?

Accepted Answer

A) $35 
B) $60 
C) $95 
D) The marginal benefit cannot be determined. 
A) $35 
B) $60 
C) $95 
D) The marginal benefit cannot be determined.

Question 5

Consider the following economic agents:
A.the government
B.consumers
C.producers
Who,in a market economy,decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

A) the government 
B) producers 
C) consumers 
D) consumers and producers 
A) the government 
B) producers 
C) consumers 
D) consumers and producers

Question 6

Which of the following is a macroeconomics question?

Accepted Answer

A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers? 
A) What determines the inflation rate? 
B) What determines the production of DVDs? 
C) What factors determine the price of carrots? 
D) What determines the wage of auto workers?

Question 7

Figure 1-1  
-Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2011.

Accepted Answer

A) 23.1% 
B) 23.8% 
C) 30% 
D) 42.9% 
A) 23.1% 
B) 23.8% 
C) 30% 
D) 42.9%

Question 8

Figure 1-4  
-Refer to Figure 1-4.Which of the following statements is false?

Accepted Answer

A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero. 
A) The slope of the tangent at E is positive. 
B) The slope of the tangent at F is negative. 
C) The slope of the tangent at E and the slope of the tangent at F are equal. 
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to zero.

Question 9

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Accepted Answer

A) scarcity 
B) allocative efficiency 
C) productive efficiency 
D) equity 
A) scarcity 
B) allocative efficiency 
C) productive efficiency 
D) equity

Question 10

Which of the following is a normative economic statement?

Accepted Answer

A) The price of wheat is too low. 
B) The current low price of wheat is the result of increased worldwide supply. 
C) When the price of wheat falls,the quantity of wheat purchased rises. 
D) When the price of wheat falls,the cost of wheat-based products falls. 
A) The price of wheat is too low. 
B) The current low price of wheat is the result of increased worldwide supply. 
C) When the price of wheat falls,the quantity of wheat purchased rises. 
D) When the price of wheat falls,the cost of wheat-based products falls.

Question 11

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

Accepted Answer

A) revenue received from 
B) extra cost of 
C) total value of 
D) sales tax on 
A) revenue received from 
B) extra cost of 
C) total value of 
D) sales tax on

Question 12

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Accepted Answer

A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00 
A) 2 1/2 Russian tea cakes 
B) 2/5 of a Russian tea cake 
C) $2.50 
D) $1.00

Question 13

Where do economic agents,such as individuals,firms and nations,interact with each other?

Accepted Answer

A) in public locations monitored by the government 
B) in any arena that brings together buyers and sellers 
C) in any physical location people where people can physically get together for selling goods,such as shopping malls 
D) in any location where transactions can be monitored by consumer groups and taxed by the government 
A) in public locations monitored by the government 
B) in any arena that brings together buyers and sellers 
C) in any physical location people where people can physically get together for selling goods,such as shopping malls 
D) in any location where transactions can be monitored by consumer groups and taxed by the government

Question 14

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Accepted Answer

A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output. 
A) Failure to do this could reduce the efficiency of the system by producing some goods and services that are not as highly valued as others. 
B) Failure to do this could lead to an inequitable allocation of goods and services produced. 
C) Failure to do this could lead to drastic shortages of good and services. 
D) Failure to do this could reduces efficiency and leads to an inequitable allocation of output.

Question 15

Economists reason that the optimal decision is to continue any activity up to the point where the

Accepted Answer

A) marginal benefit is zero. 
B) marginal benefit is greater than the marginal cost. 
C) marginal cost is zero. 
D) marginal benefit equals the marginal cost. 
A) marginal benefit is zero. 
B) marginal benefit is greater than the marginal cost. 
C) marginal cost is zero. 
D) marginal benefit equals the marginal cost.

Question 16

Markets promote

Accepted Answer

A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange. 
A) equity and competition. 
B) voluntary exchange and equality. 
C) equity and equality. 
D) competition and voluntary exchange.

Question 17

Trinh quits his $80 000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

Accepted Answer

A) 0 since he will no longer be earning a salary 
B) depends on the 'going rate' of museum employees 
C) at least $80 000 
D) the value he attributes to the joy of working at a museum 
A) 0 since he will no longer be earning a salary 
B) depends on the 'going rate' of museum employees 
C) at least $80 000 
D) the value he attributes to the joy of working at a museum

Question 18

Even if the population declines,scarcity will still exist.

Accepted Answer

A) True 
 B)False

Question 19

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

Accepted Answer

A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic 
A) microeconomic 
B) macroeconomic 
C) positive economic 
D) normative economic

Question 20

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

Accepted Answer

A) True 
 B)False

Allocative efficiency best explains ,and productive efficiency best explains .

Explain the economic assumption that 'people are rational.'

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Consider the following economic agents: A.the government B.consumers C.producers Who,in a market economy,decides what goods and services will be produced with the scarce resources available in that economy?

Which of the following is a macroeconomics question?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2011.

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is false?

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Which of the following is a normative economic statement?

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Where do economic agents,such as individuals,firms and nations,interact with each other?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Economists reason that the optimal decision is to continue any activity up to the point where the

Markets promote

Trinh quits his $80 000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

Even if the population declines,scarcity will still exist.

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

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

Allocative efficiency best explains ________,and productive efficiency best explains ________.

Explain the economic assumption that 'people are rational.'

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200.Then,the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1200 or more.

Consider the following economic agents: A.the government B.consumers C.producers Who,in a market economy,decides what goods and services will be produced with the scarce resources available in that economy?

Which of the following is a macroeconomics question?

Figure 1-1 -Refer to Figure 1-1.Using the information in the figure above,calculate the percentage change in sales of alcoholic beverages between 2008 and 2011.

Figure 1-4 -Refer to Figure 1-4.Which of the following statements is false?

Voluntary exchange between buyers and sellers generates ________ in a market economy.

Which of the following is a normative economic statement?

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

Where do economic agents,such as individuals,firms and nations,interact with each other?

Why is it necessary for all economic systems to not only provide people with goods and services,but also restrict them from getting as much of these goods and services as they wish?

Economists reason that the optimal decision is to continue any activity up to the point where the

Markets promote

Trinh quits his $80 000-a-year job to become a full-time volunteer at a museum.What is the opportunity cost of his decision?

Even if the population declines,scarcity will still exist.

When Mr.Peabody decides on the companies to which he will donate his time and money,a ________ issue is being addressed.

A university must decide if it wants to offer more adult literacy classes.This decision involves answering the economic question of 'for whom to produce.'

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

Allocative efficiency best explains ,and productive efficiency best explains .