Question 1

Suppose small business owners decide to spend less.How will this affect an economy?

Accepted Answer

A)  It will have no impact since this group makes up a small portion of any economy. 
B)  It will decrease the level of income of other people since one person's spending is someone else's income. 
C)  It will cause prices for many goods to increase. 
D)  It will increase the level of income in the economy since other groups will spend more. 
A)  It will have no impact since this group makes up a small portion of any economy. 
B)  It will decrease the level of income of other people since one person's spending is someone else's income. 
C)  It will cause prices for many goods to increase. 
D)  It will increase the level of income in the economy since other groups will spend more.

Question 2

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 3

If an economy has NOT achieved efficiency,there must be ways to:

Accepted Answer

A)  increase opportunity costs. 
B)  eliminate inequity. 
C)  make some people better off without making others worse off. 
D)  increase the incentives for its citizens to follow their own self-interest. 
A)  increase opportunity costs. 
B)  eliminate inequity. 
C)  make some people better off without making others worse off. 
D)  increase the incentives for its citizens to follow their own self-interest.

Question 4

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 5

Resources are being used efficiently when:

Accepted Answer

A)  scarcity is no longer an issue. 
B)  they are also used equitably. 
C)  every opportunity to make people better off without making others worse off has been seized. 
D)  gains from trade are still available. 
A)  scarcity is no longer an issue. 
B)  they are also used equitably. 
C)  every opportunity to make people better off without making others worse off has been seized. 
D)  gains from trade are still available.

Question 6

When someone says resources are scarce,this suggests that:

Accepted Answer

A)  lower-income individuals must be especially careful about the choices they make. 
B)  choices must be made to utilize resources in the best manner possible. 
C)  additional resources could be found if there were additional funds allocated to the effort. 
D)  we have enough resources to meet all of our needs and wants. 
A)  lower-income individuals must be especially careful about the choices they make. 
B)  choices must be made to utilize resources in the best manner possible. 
C)  additional resources could be found if there were additional funds allocated to the effort. 
D)  we have enough resources to meet all of our needs and wants.

Question 7

You like to read Vogue and Sports Illustrated.You have only $5 to spend,so you buy only Sports Illustrated.Which economic concept does this statement BEST represent?

Accepted Answer

A)  Scarcity 
B)  Equilibrium 
C)  Marginal analysis 
D)  Specialization 
A)  Scarcity 
B)  Equilibrium 
C)  Marginal analysis 
D)  Specialization

Question 8

An economy has achieved _____ if it _____ pass up any opportunities to make some people better off without making others worse off.

Accepted Answer

A)  efficiency;does not 
B)  equity;does 
C)  efficiency;does 
D)  equity;does not 
A)  efficiency;does not 
B)  equity;does 
C)  efficiency;does 
D)  equity;does not

Question 9

If Allison drives to a large city 100 kilometres from her small community to do her back-to-school shopping,this will:

Accepted Answer

A)  hurt Allison's community because Allison's spending will be income for people in the large city. 
B)  hurt the city because Allison will take the goods that she purchases back home to her small town. 
C)  help Allison's community because Allison's shopping in the big city leaves more goods for the other small-town residents to buy. 
D)  help the city because people from small towns usually buy things that people in big cities don't want. 
A)  hurt Allison's community because Allison's spending will be income for people in the large city. 
B)  hurt the city because Allison will take the goods that she purchases back home to her small town. 
C)  help Allison's community because Allison's shopping in the big city leaves more goods for the other small-town residents to buy. 
D)  help the city because people from small towns usually buy things that people in big cities don't want.

Question 10

It is cheaper to produce corn in Quebec,because corn needs a lot of water and moderate temperatures.Which economic concept does this statement BEST represent?

Accepted Answer

A)  Government policies can change spending. 
B)  Markets move toward equilibrium. 
C)  Resources should be used as efficiently as possible to achieve society's goals. 
D)  One person's spending is another person's income. 
A)  Government policies can change spending. 
B)  Markets move toward equilibrium. 
C)  Resources should be used as efficiently as possible to achieve society's goals. 
D)  One person's spending is another person's income.

Question 11

The concept of the margin decision deals with:

Accepted Answer

A)  making incremental choices. 
B)  choosing all or none of something. 
C)  engaging in unethical activities. 
D)  making difficult choices. 
A)  making incremental choices. 
B)  choosing all or none of something. 
C)  engaging in unethical activities. 
D)  making difficult choices.

Question 12

Which of the following questions would NOT involve marginal analysis:

Accepted Answer

A)  How many minutes should I exercise? 
B)  How many workers should I hire? 
C)  What is an acceptable rate of negative side effects from a new medicine? 
D)  Should I attend university? 
A)  How many minutes should I exercise? 
B)  How many workers should I hire? 
C)  What is an acceptable rate of negative side effects from a new medicine? 
D)  Should I attend university?

Question 13

A resource is anything that:

Accepted Answer

A)  can be used in production. 
B)  you pay for. 
C)  is in scarce supply. 
D)  can be consumed. 
A)  can be used in production. 
B)  you pay for. 
C)  is in scarce supply. 
D)  can be consumed.

Question 14

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

Question 15

Trade theoretically allows people to get more of what they want.

Accepted Answer

A) True 
 B)False

Question 16

An increase in efficiency means that an economy has:

Accepted Answer

A)  reduced its opportunity costs. 
B)  increased the equity of its distribution of goods and services. 
C)  made more people better off without making others worse off. 
D)  increased the incentives for its citizens to follow their own self-interest. 
A)  reduced its opportunity costs. 
B)  increased the equity of its distribution of goods and services. 
C)  made more people better off without making others worse off. 
D)  increased the incentives for its citizens to follow their own self-interest.

Question 17

Which statement demonstrates one of the three principles of economy-wide interactions?

Accepted Answer

A)  A student chooses to rent a movie with friends,rather than study for an economics quiz. 
B)  Your roommate offers to pay for the movie tickets if you drive to the theatre. 
C)  A city builds a new public park on the grounds of an abandoned warehouse. 
D)  In 2008,fearing a recession,the federal government approved a proposal to rebate some taxes for 2007. 
A)  A student chooses to rent a movie with friends,rather than study for an economics quiz. 
B)  Your roommate offers to pay for the movie tickets if you drive to the theatre. 
C)  A city builds a new public park on the grounds of an abandoned warehouse. 
D)  In 2008,fearing a recession,the federal government approved a proposal to rebate some taxes for 2007.

Question 18

When markets fail:

Accepted Answer

A)  government intervention may help. 
B)  the market realizes the maximum possible gains from trade given the available resources. 
C)  there may still be an efficient allocation of resources. 
D)  no goods and services are produced. 
A)  government intervention may help. 
B)  the market realizes the maximum possible gains from trade given the available resources. 
C)  there may still be an efficient allocation of resources. 
D)  no goods and services are produced.

Question 19

Overall,trade between Canada and the United States will:

Accepted Answer

A)  benefit the United States more than Canada. 
B)  benefit Canada more than the United States. 
C)  benefit both countries. 
D)  hurt both countries. 
A)  benefit the United States more than Canada. 
B)  benefit Canada more than the United States. 
C)  benefit both countries. 
D)  hurt both countries.

Question 20

Julie is getting ready for final exams.She has three exams during the first 3 days of the exam period.To prepare,she has outlined a schedule that includes reviewing for her first exam on 1 day,her next exam on the following day,and her third exam on the third day.On each day,she has also allocated some time when she can watch TV or basically do nothing.Which statement BEST explains why Julie provides some time for leisure?

Accepted Answer

A)  Julie is not that smart and cannot study that long. 
B)  Julie is slacking off and will most likely fail all of her finals. 
C)  Julie realizes that there are benefits to leisure time that outweigh the costs of constant studying. 
D)  Julie does not understand the importance of studying. 
A)  Julie is not that smart and cannot study that long. 
B)  Julie is slacking off and will most likely fail all of her finals. 
C)  Julie realizes that there are benefits to leisure time that outweigh the costs of constant studying. 
D)  Julie does not understand the importance of studying.

Exam 1: First Principles

Suppose small business owners decide to spend less.How will this affect an economy?

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

If an economy has NOT achieved efficiency,there must be ways to:

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

Resources are being used efficiently when:

When someone says resources are scarce,this suggests that:

You like to read Vogue and Sports Illustrated.You have only $5 to spend,so you buy only Sports Illustrated.Which economic concept does this statement BEST represent?

An economy has achieved _____ if it _____ pass up any opportunities to make some people better off without making others worse off.

If Allison drives to a large city 100 kilometres from her small community to do her back-to-school shopping,this will:

It is cheaper to produce corn in Quebec,because corn needs a lot of water and moderate temperatures.Which economic concept does this statement BEST represent?

The concept of the margin decision deals with:

Which of the following questions would NOT involve marginal analysis:

A resource is anything that:

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

Trade theoretically allows people to get more of what they want.

An increase in efficiency means that an economy has:

Which statement demonstrates one of the three principles of economy-wide interactions?

When markets fail:

Overall,trade between Canada and the United States will:

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

An economy has achieved _ if it _ pass up any opportunities to make some people better off without making others worse off.