Question 1

Individuals gain from trade because:

Accepted Answer

A)  of specialization in production. 
B)  they can sell at a lower price than they can buy at. 
C)  self-sufficiency is efficient. 
D)  of the principle of absolute advantage. 
A)  of specialization in production. 
B)  they can sell at a lower price than they can buy at. 
C)  self-sufficiency is efficient. 
D)  of the principle of absolute advantage.

Question 2

Specialization and trade usually lead to:

Accepted Answer

A)  lower economic growth. 
B)  the exchange of goods and services in markets. 
C)  lower living standards. 
D)  higher prices. 
A)  lower economic growth. 
B)  the exchange of goods and services in markets. 
C)  lower living standards. 
D)  higher prices.

Question 3

In 2013,the federal government passed a tax cut.The country did NOT incur any opportunity cost from this decision.

Accepted Answer

A) True 
 B)False

Question 4

Because of the opportunity cost,if Canada spends $87 billion in the rebuilding of Haiti after a Hurricane,it has to forgo the opportunity to spend $87 billion on some other programme.

Accepted Answer

A) True 
 B)False

Question 5

The study of economics arises because of the necessity of choice,and the necessity of choice arises because of the fundamental problem of scarcity of resources.

Accepted Answer

A) True 
 B)False

Question 6

The problem of determining what goods and services society should produce:

Accepted Answer

A)  exists because we can produce more than we need or want. 
B)  exists because there are not enough resources to provide all of the goods and services that people want. 
C)  would not exist if all goods and services were scarce. 
D)  would not exist if government owned all of the resources. 
A)  exists because we can produce more than we need or want. 
B)  exists because there are not enough resources to provide all of the goods and services that people want. 
C)  would not exist if all goods and services were scarce. 
D)  would not exist if government owned all of the resources.

Question 7

If all of the opportunities to make someone better off (without making someone else worse off)have been exploited,an economy is:

Accepted Answer

A)  equitable. 
B)  inefficient. 
C)  marginally optimal. 
D)  efficient. 
A)  equitable. 
B)  inefficient. 
C)  marginally optimal. 
D)  efficient.

Question 8

All children have to be immunized against polio,measles,mumps,and other diseases.This,however,is not true of the chicken pox vaccine.If you don't have enough money to pay for the vaccination from your pediatrician,they will be provided free at the local hospital.Which economic principle does this statement BEST represent?

Accepted Answer

A)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
B)  Resources should be used efficiently to achieve society's goals. 
C)  When markets don't achieve efficiency,government intervention can improve society's welfare. 
D)  Government policies can change spending. 
A)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
B)  Resources should be used efficiently to achieve society's goals. 
C)  When markets don't achieve efficiency,government intervention can improve society's welfare. 
D)  Government policies can change spending.

Question 9

The student centre on campus has burritos,bagels,or burgers for lunch,and they all cost the same.You love burgers and bagels,but you decide to have a burger today.If they were out of burgers,you would have bought a bagel.Which economic principle does this statement BEST represent?

Accepted Answer

A)  The true cost of something is its opportunity cost. 
B)  "How much" is a decision at the margin. 
C)  One person's spending is another person's income. 
D)  There are gains from trade. 
A)  The true cost of something is its opportunity cost. 
B)  "How much" is a decision at the margin. 
C)  One person's spending is another person's income. 
D)  There are gains from trade.

Question 10

Which factor can BEST be considered to be a resource used in the production of computers?

Accepted Answer

A)  money from investors 
B)  wages of computer engineers 
C)  computer engineers 
D)  taxes on the profits from the sale of the computers 
A)  money from investors 
B)  wages of computer engineers 
C)  computer engineers 
D)  taxes on the profits from the sale of the computers

Question 11

The problem of scarcity is confronted by:

Accepted Answer

A)  industrialized societies only. 
B)  preindustrial societies only. 
C)  societies governed by communist philosophies only. 
D)  all societies. 
A)  industrialized societies only. 
B)  preindustrial societies only. 
C)  societies governed by communist philosophies only. 
D)  all societies.

Question 12

Economists tend to believe that to change people's behaviour,you must:

Accepted Answer

A)  appeal to their concern for society. 
B)  change their incentives. 
C)  legislate the change. 
D)  appeal to their religious values. 
A)  appeal to their concern for society. 
B)  change their incentives. 
C)  legislate the change. 
D)  appeal to their religious values.

Question 13

Economists use the term equilibrium to describe situation when:

Accepted Answer

A)  individuals are equal. 
B)  goods are distributed equitably. 
C)  there are equal number of buyers and sellers. 
D)  no individual would be better off taking a different action or no individual has an incentive to change his or her behaviour. 
A)  individuals are equal. 
B)  goods are distributed equitably. 
C)  there are equal number of buyers and sellers. 
D)  no individual would be better off taking a different action or no individual has an incentive to change his or her behaviour.

Question 14

When markets don't achieve efficiency:

Accepted Answer

A)  they must achieve equity. 
B)  the government must be participating in the market. 
C)  the government may intervene to improve society's welfare. 
D)  they should be closed. 
A)  they must achieve equity. 
B)  the government must be participating in the market. 
C)  the government may intervene to improve society's welfare. 
D)  they should be closed.

Question 15

The phrase gains from trade refers to the:

Accepted Answer

A)  profits obtained from sales of a good or service. 
B)  increase in total output that is realized when individuals specialize in particular tasks and trade with each other. 
C)  gains that one obtains by taking advantage of an uninformed buyer and selling at a higher than average price. 
D)  gains that one obtains by taking advantage of a temporary discount,or sale price. 
A)  profits obtained from sales of a good or service. 
B)  increase in total output that is realized when individuals specialize in particular tasks and trade with each other. 
C)  gains that one obtains by taking advantage of an uninformed buyer and selling at a higher than average price. 
D)  gains that one obtains by taking advantage of a temporary discount,or sale price.

Question 16

Beth promises to do Alice's taxes,and in exchange,Alice will set up several spreadsheets for Beth's household budget.This trade will MOST likely:

Accepted Answer

A)  be beneficial to both individuals. 
B)  hurt both individuals. 
C)  help Beth but hurt Alice. 
D)  help Alice but hurt Beth. 
A)  be beneficial to both individuals. 
B)  hurt both individuals. 
C)  help Beth but hurt Alice. 
D)  help Alice but hurt Beth.

Question 17

When the nations that constitute the Organization of the Petroleum Exporting Countries (OPEC)restrict the supply of oil to increase their profits,the oil market:

Accepted Answer

A)  achieves an efficient outcome because profits increase. 
B)  achieves an equitable outcome because the nations with oil resources receive the profits commensurate with that resource. 
C)  fails because there is no longer an efficient allocation of resources. 
D)  fails because there is no longer an equitable allocation of resources. 
A)  achieves an efficient outcome because profits increase. 
B)  achieves an equitable outcome because the nations with oil resources receive the profits commensurate with that resource. 
C)  fails because there is no longer an efficient allocation of resources. 
D)  fails because there is no longer an equitable allocation of resources.

Question 18

A new startup airline is offering a free round-trip ticket to Hawaii to the first 600 people who enter the airline's main office on the airline's first day of business.You arrive 24 hours before it is scheduled to open to be sure to get the free ticket,and you buy food from vendors while waiting in line.You successfully obtain the ticket.What would be the cost to you for obtaining the ticket?

Accepted Answer

A)  zero 
B)  the cost of food while you wait in line 
C)  the cost of food while you wait in line and the opportunity cost of your time spent in line 
D)  the actual value of the ticket 
A)  zero 
B)  the cost of food while you wait in line 
C)  the cost of food while you wait in line and the opportunity cost of your time spent in line 
D)  the actual value of the ticket

Question 19

Lena and Jess are roommates.Lena hates to clean the bathroom.Jess will agree to clean the bathroom only if Lena vacuums the living room.Which economic concept does this statement BEST represent?

Accepted Answer

A)  When markets don't achieve efficiency,government intervention can improve society's welfare. 
B)  "How much" is a decision at the margin. 
C)  One person's spending is another person's income. 
D)  There are gains from trade. 
A)  When markets don't achieve efficiency,government intervention can improve society's welfare. 
B)  "How much" is a decision at the margin. 
C)  One person's spending is another person's income. 
D)  There are gains from trade.

Question 20

Which method of encouraging recycling is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Accepted Answer

A)  appealing to consumers to be a good citizen 
B)  publicizing the advantages of recycling 
C)  imposing a tax per unit of garbage generated 
D)  advertising different ways of recycling 
A)  appealing to consumers to be a good citizen 
B)  publicizing the advantages of recycling 
C)  imposing a tax per unit of garbage generated 
D)  advertising different ways of recycling

Individuals gain from trade because:

Specialization and trade usually lead to:

In 2013,the federal government passed a tax cut.The country did NOT incur any opportunity cost from this decision.

Because of the opportunity cost,if Canada spends $87 billion in the rebuilding of Haiti after a Hurricane,it has to forgo the opportunity to spend $87 billion on some other programme.

The study of economics arises because of the necessity of choice,and the necessity of choice arises because of the fundamental problem of scarcity of resources.

The problem of determining what goods and services society should produce:

If all of the opportunities to make someone better off (without making someone else worse off)have been exploited,an economy is:

The student centre on campus has burritos,bagels,or burgers for lunch,and they all cost the same.You love burgers and bagels,but you decide to have a burger today.If they were out of burgers,you would have bought a bagel.Which economic principle does this statement BEST represent?

Which factor can BEST be considered to be a resource used in the production of computers?

The problem of scarcity is confronted by:

Economists tend to believe that to change people's behaviour,you must:

Economists use the term equilibrium to describe situation when:

When markets don't achieve efficiency:

The phrase gains from trade refers to the:

Beth promises to do Alice's taxes,and in exchange,Alice will set up several spreadsheets for Beth's household budget.This trade will MOST likely:

When the nations that constitute the Organization of the Petroleum Exporting Countries (OPEC)restrict the supply of oil to increase their profits,the oil market:

Lena and Jess are roommates.Lena hates to clean the bathroom.Jess will agree to clean the bathroom only if Lena vacuums the living room.Which economic concept does this statement BEST represent?

Which method of encouraging recycling is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Exam 1: First Principles

Individuals gain from trade because:

Specialization and trade usually lead to:

In 2013,the federal government passed a tax cut.The country did NOT incur any opportunity cost from this decision.

Because of the opportunity cost,if Canada spends $87 billion in the rebuilding of Haiti after a Hurricane,it has to forgo the opportunity to spend $87 billion on some other programme.

The study of economics arises because of the necessity of choice,and the necessity of choice arises because of the fundamental problem of scarcity of resources.

The problem of determining what goods and services society should produce:

If all of the opportunities to make someone better off (without making someone else worse off)have been exploited,an economy is:

The student centre on campus has burritos,bagels,or burgers for lunch,and they all cost the same.You love burgers and bagels,but you decide to have a burger today.If they were out of burgers,you would have bought a bagel.Which economic principle does this statement BEST represent?

Which factor can BEST be considered to be a resource used in the production of computers?

The problem of scarcity is confronted by:

Economists tend to believe that to change people's behaviour,you must:

Economists use the term equilibrium to describe situation when:

When markets don't achieve efficiency:

The phrase gains from trade refers to the:

Beth promises to do Alice's taxes,and in exchange,Alice will set up several spreadsheets for Beth's household budget.This trade will MOST likely:

When the nations that constitute the Organization of the Petroleum Exporting Countries (OPEC)restrict the supply of oil to increase their profits,the oil market:

Lena and Jess are roommates.Lena hates to clean the bathroom.Jess will agree to clean the bathroom only if Lena vacuums the living room.Which economic concept does this statement BEST represent?

Which method of encouraging recycling is likely to be MOST effective given that people usually exploit opportunities to make themselves better off?

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters