Question 1

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 2

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 3

The existence of government intervention often suggests that:

Accepted Answer

A)  markets may not be able to provide for efficient results all of the time. 
B)  individual actions have no side effects. 
C)  an equitable outcome will necessarily be achieved through this intervention. 
D)  markets can efficiently manage the allocation of goods. 
A)  markets may not be able to provide for efficient results all of the time. 
B)  individual actions have no side effects. 
C)  an equitable outcome will necessarily be achieved through this intervention. 
D)  markets can efficiently manage the allocation of goods.

Question 4

Which statement is FALSE?

Accepted Answer

A)  Efficiency exists when an economy realizes the maximum possible gains from trade given the available resources. 
B)  If an economy is efficient,it is possible to make only a few people better off without reducing other individuals' economic welfare. 
C)  Economic efficiency exists when all opportunities to make people better off have been fully exploited. 
D)  Free markets usually lead to efficiency,but not necessarily equity. 
A)  Efficiency exists when an economy realizes the maximum possible gains from trade given the available resources. 
B)  If an economy is efficient,it is possible to make only a few people better off without reducing other individuals' economic welfare. 
C)  Economic efficiency exists when all opportunities to make people better off have been fully exploited. 
D)  Free markets usually lead to efficiency,but not necessarily equity.

Question 5

For which decision would marginal analysis be MOST relevant?

Accepted Answer

A)  Should George accept a job with Delta Airlines or with Greenpeace? 
B)  Should Mary go to graduate school after graduating from university? 
C)  Should Vivek emigrate to Canada or stay in India? 
D)  Should Hong work an additional hour or take a short nap? 
A)  Should George accept a job with Delta Airlines or with Greenpeace? 
B)  Should Mary go to graduate school after graduating from university? 
C)  Should Vivek emigrate to Canada or stay in India? 
D)  Should Hong work an additional hour or take a short nap?

Question 6

We are forced to make choices because of:

Accepted Answer

A)  exploitation. 
B)  efficiency. 
C)  scarcity. 
D)  the margin. 
A)  exploitation. 
B)  efficiency. 
C)  scarcity. 
D)  the margin.

Question 7

If an economy's resources are used efficiently,then it is guaranteed that the economy will also achieve equity.

Accepted Answer

A) True 
 B)False

Question 8

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco,a burrito,or nachos.You buy the taco and think that if you had not purchased the taco,you would have purchased the burrito.The opportunity cost of the taco is:

Accepted Answer

A)  $3. 
B)  your enjoyment of the burrito. 
C)  $3 and your enjoyment of the burrito. 
D)  $3,your enjoyment of the burrito,and your enjoyment of the nachos. 
A)  $3. 
B)  your enjoyment of the burrito. 
C)  $3 and your enjoyment of the burrito. 
D)  $3,your enjoyment of the burrito,and your enjoyment of the nachos.

Question 9

If resources are scarce,it means that they:

Accepted Answer

A)  are insufficient to provide enough goods and services to satisfy all human material wants and needs. 
B)  have no opportunity cost. 
C)  are probably not valued by consumers. 
D)  have an unlimited supply. 
A)  are insufficient to provide enough goods and services to satisfy all human material wants and needs. 
B)  have no opportunity cost. 
C)  are probably not valued by consumers. 
D)  have an unlimited supply.

Question 10

Manny is attending university and majoring in economics.By doing so,Manny is improving his:

Accepted Answer

A)  land. 
B)  labour. 
C)  capital. 
D)  human capital. 
A)  land. 
B)  labour. 
C)  capital. 
D)  human capital.

Question 11

In baseball,when one manager decides to send in a pinch hitter,the other manager often changes pitchers.This sometimes causes the first manager to send in a new pinch hitter.Once both managers decide that no more player substitutions will benefit their team,the situation has reached:

Accepted Answer

A)  efficiency. 
B)  equilibrium. 
C)  equity. 
D)  the market. 
A)  efficiency. 
B)  equilibrium. 
C)  equity. 
D)  the market.

Question 12

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 13

According to standard economic theory,markets usually lead to efficiency.

Accepted Answer

A) True 
 B)False

Question 14

Economists define an efficient use of resources as a situation in which:

Accepted Answer

A)  one person can be made better off but only by making another person worse off. 
B)  all persons can be made better off without making anyone worse off. 
C)  all persons receive an equal share of the resources. 
D)  all persons are made worse off when one person is made better off. 
A)  one person can be made better off but only by making another person worse off. 
B)  all persons can be made better off without making anyone worse off. 
C)  all persons receive an equal share of the resources. 
D)  all persons are made worse off when one person is made better off.

Question 15

A central and fundamental theme in economics is that:

Accepted Answer

A)  wants are limited. 
B)  Canada is a rich country,but we are simply not aware of it. 
C)  people have unlimited wants but limited means to satisfy them. 
D)  resources are unlimited. 
A)  wants are limited. 
B)  Canada is a rich country,but we are simply not aware of it. 
C)  people have unlimited wants but limited means to satisfy them. 
D)  resources are unlimited.

Question 16

Who wrote The Wealth of Nations,a book that many credit with establishing economics as a discipline?

Accepted Answer

A)  Karl Marx 
B)  David Ricardo 
C)  Adam Smith 
D)  John Maynard Keynes 
A)  Karl Marx 
B)  David Ricardo 
C)  Adam Smith 
D)  John Maynard Keynes

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

The basic concern of microeconomics is to:

Accepted Answer

A)  keep business firms from losing money. 
B)  prove that capitalism is better than socialism. 
C)  study the choices people make. 
D)  use unlimited resources to produce goods and services to satisfy limited wants. 
A)  keep business firms from losing money. 
B)  prove that capitalism is better than socialism. 
C)  study the choices people make. 
D)  use unlimited resources to produce goods and services to satisfy limited wants.

Economists use the term equilibrium to describe situation when:

The economic way of thinking entails:

The existence of government intervention often suggests that:

Which statement is FALSE?

For which decision would marginal analysis be MOST relevant?

We are forced to make choices because of:

If an economy's resources are used efficiently,then it is guaranteed that the economy will also achieve equity.

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco,a burrito,or nachos.You buy the taco and think that if you had not purchased the taco,you would have purchased the burrito.The opportunity cost of the taco is:

If resources are scarce,it means that they:

Manny is attending university and majoring in economics.By doing so,Manny is improving his:

In baseball,when one manager decides to send in a pinch hitter,the other manager often changes pitchers.This sometimes causes the first manager to send in a new pinch hitter.Once both managers decide that no more player substitutions will benefit their team,the situation has reached:

According to standard economic theory,markets usually lead to efficiency.

Economists define an efficient use of resources as a situation in which:

A central and fundamental theme in economics is that:

Who wrote The Wealth of Nations,a book that many credit with establishing economics as a discipline?

Whenever a choice is made:

The basic concern of microeconomics is to:

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

Exam 1: First Principles

Economists use the term equilibrium to describe situation when:

The economic way of thinking entails:

The existence of government intervention often suggests that:

Which statement is FALSE?

For which decision would marginal analysis be MOST relevant?

We are forced to make choices because of:

If an economy's resources are used efficiently,then it is guaranteed that the economy will also achieve equity.

The Taco Hut charges the same price for everything on its menu: $3 will buy a taco,a burrito,or nachos.You buy the taco and think that if you had not purchased the taco,you would have purchased the burrito.The opportunity cost of the taco is:

If resources are scarce,it means that they:

Manny is attending university and majoring in economics.By doing so,Manny is improving his:

In baseball,when one manager decides to send in a pinch hitter,the other manager often changes pitchers.This sometimes causes the first manager to send in a new pinch hitter.Once both managers decide that no more player substitutions will benefit their team,the situation has reached:

According to standard economic theory,markets usually lead to efficiency.

Economists define an efficient use of resources as a situation in which:

A central and fundamental theme in economics is that:

Who wrote The Wealth of Nations,a book that many credit with establishing economics as a discipline?

Whenever a choice is made:

The basic concern of microeconomics is to:

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters