Question 1

If equilibrium exists:

Accepted Answer

A)  all individuals must have an equal amount of income. 
B)  the price in that market will not fluctuate by more than 5%. 
C)  there will be no remaining opportunities for individuals to make themselves better off. 
D)  the number of buyers will equal the number of sellers. 
A)  all individuals must have an equal amount of income. 
B)  the price in that market will not fluctuate by more than 5%. 
C)  there will be no remaining opportunities for individuals to make themselves better off. 
D)  the number of buyers will equal the number of sellers.

Question 2

Which book illustrates the advantages of specialization using an eighteenth-century pin factory as an example?

Accepted Answer

A)  Free to Choose,by Milton Friedman 
B)  The Wealth of Nations,by Adam Smith 
C)  Das Kapital,by Karl Marx 
D)  The General Theory,by John Maynard Keynes 
A)  Free to Choose,by Milton Friedman 
B)  The Wealth of Nations,by Adam Smith 
C)  Das Kapital,by Karl Marx 
D)  The General Theory,by John Maynard Keynes

Question 3

If the provincial government allocates additional spending on education programmes,the opportunity cost is:

Accepted Answer

A)  zero. 
B)  the dollar amount of the additional spending. 
C)  considered only if taxes have to be raised to fund the spending. 
D)  measured in terms of the best alternative uses for that money. 
A)  zero. 
B)  the dollar amount of the additional spending. 
C)  considered only if taxes have to be raised to fund the spending. 
D)  measured in terms of the best alternative uses for that money.

Question 4

Mr.Freezee operates a fleet of ice cream trucks that drive around neighbourhoods selling ice cream.He is trying to decide whether he should buy another ice cream truck to add to his fleet.He determines that one more truck will add $750 to his revenue but that the truck will also increase his costs by $1 000.Based on marginal analysis,Mr.Freezee decides:

Accepted Answer

A)  that he should not purchase the truck since the costs outweigh the benefits. 
B)  that he should purchase the truck since the benefits outweigh the costs. 
C)  that he should purchase the truck since his profits will rise by $250. 
D)  to purchase several trucks with the same costs and benefits. 
A)  that he should not purchase the truck since the costs outweigh the benefits. 
B)  that he should purchase the truck since the benefits outweigh the costs. 
C)  that he should purchase the truck since his profits will rise by $250. 
D)  to purchase several trucks with the same costs and benefits.

Question 5

Specialization and trade should NOT lead to:

Accepted Answer

A)  individuals learning specific skills and earning a salary. 
B)  a decrease in total economic output. 
C)  higher living standards. 
D)  the exchange of goods and services in markets. 
A)  individuals learning specific skills and earning a salary. 
B)  a decrease in total economic output. 
C)  higher living standards. 
D)  the exchange of goods and services in markets.

Question 6

How people choose among the alternatives available to them is:

Accepted Answer

A)  not part of the study of economics. 
B)  impossible to describe. 
C)  the study of microeconomics. 
D)  not important in the study of microeconomics. 
A)  not part of the study of economics. 
B)  impossible to describe. 
C)  the study of microeconomics. 
D)  not important in the study of microeconomics.

Question 7

A choice made _____ is a choice whether to do a little more or a little less of an activity.

Accepted Answer

A)  at the front end 
B)  in the beginning 
C)  at the margin 
D)  ceteris paribus 
A)  at the front end 
B)  in the beginning 
C)  at the margin 
D)  ceteris paribus

Question 8

Suppose the Ontario government offered cash bonuses to students who complete their degree in the minimum 4 years.The cash bonuses are motivated by which economic principle?

Accepted Answer

A)  Choices are necessary because resources are scarce. 
B)  The true cost of something is its opportunity cost. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
A)  Choices are necessary because resources are scarce. 
B)  The true cost of something is its opportunity cost. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives,exploiting opportunities to make themselves better off.

Question 9

If a market is in disequilibrium:

Accepted Answer

A)  it will continue unless there is government intervention. 
B)  no individual will be better off doing something different. 
C)  there are opportunities for some people to make themselves better off. 
D)  it must be because the government has intervened in the market,resulting in the market's failure to reach equilibrium. 
A)  it will continue unless there is government intervention. 
B)  no individual will be better off doing something different. 
C)  there are opportunities for some people to make themselves better off. 
D)  it must be because the government has intervened in the market,resulting in the market's failure to reach equilibrium.

Question 10

Zoe's grandparents are excited about finally paying off their mortgage because,as they say,"Our cost of housing is now zero." Zoe should explain to them the economic concept of:

Accepted Answer

A)  marginal analysis: if the additional cost of housing is zero,then their additional benefit is also zero. 
B)  opportunity cost: by living in the house,they are giving up the opportunity to sell the house,buy a smaller one,and pocket the difference. 
C)  efficiency: If their cost of housing is now zero,they should let Zoe move in without charging her any rent.Zoe is better off,and her grandparents aren't hurt. 
D)  equity: it is unfair that some people are still paying off their mortgage. 
A)  marginal analysis: if the additional cost of housing is zero,then their additional benefit is also zero. 
B)  opportunity cost: by living in the house,they are giving up the opportunity to sell the house,buy a smaller one,and pocket the difference. 
C)  efficiency: If their cost of housing is now zero,they should let Zoe move in without charging her any rent.Zoe is better off,and her grandparents aren't hurt. 
D)  equity: it is unfair that some people are still paying off their mortgage.

Question 11

Scarcity exists when:

Accepted Answer

A)  making choices among two or more alternatives is not necessary. 
B)  individuals can have more of any good without giving up anything. 
C)  individuals can have more of one good but only by giving up something else. 
D)  resources are unlimited. 
A)  making choices among two or more alternatives is not necessary. 
B)  individuals can have more of any good without giving up anything. 
C)  individuals can have more of one good but only by giving up something else. 
D)  resources are unlimited.

Question 12

When the Calgary city manager faces a complaint that the city council chamber podium is not accessible to individuals with disabilities,he responds that the $1 million improvement will not happen because "that money could be spent building 70 curb ramps." Which economic principle does this statement BEST represent?

Accepted Answer

A)  Markets move toward equilibrium. 
B)  The true cost of something is its opportunity cost. 
C)  "How much" is a decision at the margin. 
D)  When markets don't achieve efficiency,government intervention can improve society's welfare. 
A)  Markets move toward equilibrium. 
B)  The true cost of something is its opportunity cost. 
C)  "How much" is a decision at the margin. 
D)  When markets don't achieve efficiency,government intervention can improve society's welfare.

Question 13

Which statement is NOT one of the four principles that underlie individual choice?

Accepted Answer

A)  Choices are necessary because resources are scarce. 
B)  Overall spending sometimes gets out of line with the economy's productive capacity. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
A)  Choices are necessary because resources are scarce. 
B)  Overall spending sometimes gets out of line with the economy's productive capacity. 
C)  "How much" is a decision at the margin. 
D)  People usually respond to incentives,exploiting opportunities to make themselves better off.

Question 14

Which decision is an example of marginal analysis?

Accepted Answer

A)  ordering a pizza,rather than eating leftover meatloaf 
B)  deciding whether to eat one more slice of pizza 
C)  using a coupon to save $2 on a pizza 
D)  writing a check to pay for the pizza,rather than using a credit card 
A)  ordering a pizza,rather than eating leftover meatloaf 
B)  deciding whether to eat one more slice of pizza 
C)  using a coupon to save $2 on a pizza 
D)  writing a check to pay for the pizza,rather than using a credit card

Question 15

You notice that when a new yoga class is offered at the student recreation centre at a highly desirable time,some students from the other yoga classes go to the new class instead.Which economic principle does this statement BEST represent?

Accepted Answer

A)  Choices are necessary because resources are scarce. 
B)  The true cost of something is its opportunity cost. 
C)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
D)  "How much" is a decision at the margin. 
A)  Choices are necessary because resources are scarce. 
B)  The true cost of something is its opportunity cost. 
C)  People usually respond to incentives,exploiting opportunities to make themselves better off. 
D)  "How much" is a decision at the margin.

Question 16

Katherine has a physics exam tomorrow.However,a free lecture by one of her favorite authors is taking place this evening.Katherine decides to attend the lecture instead of studying for her exam.Katherine's opportunity cost of attending the lecture is:

Accepted Answer

A)  the time spent listening to the lecture. 
B)  not relevant since no money is involved. 
C)  the transportation and time cost of getting to the lecture itself plus the reduction in her physics exam grade as a result of not studying tonight. 
D)  the time spent getting to the lecture. 
A)  the time spent listening to the lecture. 
B)  not relevant since no money is involved. 
C)  the transportation and time cost of getting to the lecture itself plus the reduction in her physics exam grade as a result of not studying tonight. 
D)  the time spent getting to the lecture.

Question 17

Whenever a choice is made:

Accepted Answer

A)  the cost of that choice is the opportunity cost. 
B)  the cost is easy to measure in dollar terms. 
C)  efficiency is improved. 
D)  scarcity is not a problem. 
A)  the cost of that choice is the opportunity cost. 
B)  the cost is easy to measure in dollar terms. 
C)  efficiency is improved. 
D)  scarcity is not a problem.

Question 18

A new fast-food restaurant offered a prize-a free meal (valued at $5)each week for a year-to its first 100 customers.Ramona camped out for 48 hours before the opening to be one of the first 100 customers,and she successfully obtained the prize.The cost to Ramona of obtaining the "free meal a week for a year" prize was:

Accepted Answer

A)  zero. 
B)  $260. 
C)  whatever else she would have done with the 48 hours. 
D)  The cost is impossible to determine. 
A)  zero. 
B)  $260. 
C)  whatever else she would have done with the 48 hours. 
D)  The cost is impossible to determine.

Question 19

The economic way of thinking entails:

Accepted Answer

A)  the analysis of benefits but not costs. 
B)  the analysis of costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics. 
A)  the analysis of benefits but not costs. 
B)  the analysis of costs but not benefits. 
C)  making choices at the margin. 
D)  making the distinction between microeconomics and macroeconomics.

Question 20

Which topic is studied in macroeconomics?

Accepted Answer

A)  the change in automobile sales due to a change in the price of automobiles 
B)  the effect of a tax reduction on the profits of an individual business 
C)  recessions 
D)  the unemployment of workers displaced by technological change in the typesetting industry 
A)  the change in automobile sales due to a change in the price of automobiles 
B)  the effect of a tax reduction on the profits of an individual business 
C)  recessions 
D)  the unemployment of workers displaced by technological change in the typesetting industry

If equilibrium exists:

Which book illustrates the advantages of specialization using an eighteenth-century pin factory as an example?

If the provincial government allocates additional spending on education programmes,the opportunity cost is:

Specialization and trade should NOT lead to:

How people choose among the alternatives available to them is:

A choice made _____ is a choice whether to do a little more or a little less of an activity.

Suppose the Ontario government offered cash bonuses to students who complete their degree in the minimum 4 years.The cash bonuses are motivated by which economic principle?

If a market is in disequilibrium:

Zoe's grandparents are excited about finally paying off their mortgage because,as they say,"Our cost of housing is now zero." Zoe should explain to them the economic concept of:

Scarcity exists when:

Which statement is NOT one of the four principles that underlie individual choice?

Which decision is an example of marginal analysis?

You notice that when a new yoga class is offered at the student recreation centre at a highly desirable time,some students from the other yoga classes go to the new class instead.Which economic principle does this statement BEST represent?

Katherine has a physics exam tomorrow.However,a free lecture by one of her favorite authors is taking place this evening.Katherine decides to attend the lecture instead of studying for her exam.Katherine's opportunity cost of attending the lecture is:

Whenever a choice is made:

The economic way of thinking entails:

Which topic is studied in macroeconomics?

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

If equilibrium exists:

Which book illustrates the advantages of specialization using an eighteenth-century pin factory as an example?

If the provincial government allocates additional spending on education programmes,the opportunity cost is:

Specialization and trade should NOT lead to:

How people choose among the alternatives available to them is:

A choice made _____ is a choice whether to do a little more or a little less of an activity.

Suppose the Ontario government offered cash bonuses to students who complete their degree in the minimum 4 years.The cash bonuses are motivated by which economic principle?

If a market is in disequilibrium:

Zoe's grandparents are excited about finally paying off their mortgage because,as they say,"Our cost of housing is now zero." Zoe should explain to them the economic concept of:

Scarcity exists when:

Which statement is NOT one of the four principles that underlie individual choice?

Which decision is an example of marginal analysis?

You notice that when a new yoga class is offered at the student recreation centre at a highly desirable time,some students from the other yoga classes go to the new class instead.Which economic principle does this statement BEST represent?

Katherine has a physics exam tomorrow.However,a free lecture by one of her favorite authors is taking place this evening.Katherine decides to attend the lecture instead of studying for her exam.Katherine's opportunity cost of attending the lecture is:

Whenever a choice is made:

The economic way of thinking entails:

Which topic is studied in macroeconomics?

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