Question 1

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the:

Accepted Answer

A)  marginal cost of waiting is less than the marginal benefit of being served. 
B)  marginal cost of waiting is greater than the marginal benefit of being served. 
C)  management is exhibiting irrational behaviour by not maximizing profits. 
D)  management is making an assumption that other things are equal. 
A)  marginal cost of waiting is less than the marginal benefit of being served. 
B)  marginal cost of waiting is greater than the marginal benefit of being served. 
C)  management is exhibiting irrational behaviour by not maximizing profits. 
D)  management is making an assumption that other things are equal.

Question 2

-Refer to the above diagram. Which line(s) show(s) a positive vertical intercept?

Accepted Answer

A)  A and D only 
B)  B and C only 
C)  A, D, and E 
D)  A, D, and B 
A)  A and D only 
B)  B and C only 
C)  A, D, and E 
D)  A, D, and B

Question 3

If a positive relationship exists between x and y:

Accepted Answer

A)  an increase in x will cause y to decrease. 
B)  a decrease in x will cause y to increase. 
C)  the relationship will graph as an upsloping line. 
D)  the vertical intercept must be positive. 
A)  an increase in x will cause y to decrease. 
B)  a decrease in x will cause y to increase. 
C)  the relationship will graph as an upsloping line. 
D)  the vertical intercept must be positive.

Question 4

-Refer to the above production possibilities curve. At the onset of World War II Canada had large amounts of idle human and property resources. Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Accepted Answer

A)  c to point b. 
B)  b to point c. 
C)  a to point b. 
D)  c to point d. 
A)  c to point b. 
B)  b to point c. 
C)  a to point b. 
D)  c to point d.

Question 5

A positive statement is one which is:

Accepted Answer

A)  derived by an abstract generalization. 
B)  suggestive of what should be done. 
C)  subjective and is based on a value judgment. 
D)  objective and is based on facts. 
A)  derived by an abstract generalization. 
B)  suggestive of what should be done. 
C)  subjective and is based on a value judgment. 
D)  objective and is based on facts.

Question 6

The assertion that "There is no free lunch" means:

Accepted Answer

A)  there are always tradeoffs between economic goals. 
B)  all production involves the use of scarce resources and thus the sacrifice of alternative goods. 
C)  marginal analysis is not used in economic reasoning. 
D)  choices do not need be made if behaviour is rational. 
A)  there are always tradeoffs between economic goals. 
B)  all production involves the use of scarce resources and thus the sacrifice of alternative goods. 
C)  marginal analysis is not used in economic reasoning. 
D)  choices do not need be made if behaviour is rational.

Question 7

-Refer to the above diagram for athletic shoes. If the current output of shoes is Q1, then:

Accepted Answer

A)  society would consider additional units of shoes to be more valuable than alternative products. 
B)  society would consider additional units of shoes to be less valuable than alternative products. 
C)  society would experience a net loss by producing more shoes. 
D)  resources are being allocated efficiently to the production of shoes. 
A)  society would consider additional units of shoes to be more valuable than alternative products. 
B)  society would consider additional units of shoes to be less valuable than alternative products. 
C)  society would experience a net loss by producing more shoes. 
D)  resources are being allocated efficiently to the production of shoes.

Question 8

The production possibilities curve illustrates the basic principle that:

Accepted Answer

A)  the production of more of any one good will in time require smaller and smaller sacrifices of other goods. 
B)  an economy will automatically seek that level of output at which all of its resources are employed. 
C)  if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. 
D)  an economy's capacity to produce increases in proportion to its population size. 
A)  the production of more of any one good will in time require smaller and smaller sacrifices of other goods. 
B)  an economy will automatically seek that level of output at which all of its resources are employed. 
C)  if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. 
D)  an economy's capacity to produce increases in proportion to its population size.

Question 9

In every economic system, choices must be made because resources are:

Accepted Answer

A)  infinite, but economic wants are finite. 
B)  finite, but economic wants are insatiable. 
C)  unlimited, but economic wants are limited. 
D)  limited, and so are economic wants. 
A)  infinite, but economic wants are finite. 
B)  finite, but economic wants are insatiable. 
C)  unlimited, but economic wants are limited. 
D)  limited, and so are economic wants.

Question 10

Which of the following is not correct? A typical production possibilities curve:

Accepted Answer

A)  indicates how much of two products a society can produce. 
B)  reveals how much each additional unit of one product will cost in terms of the other product. 
C)  specifies how much of each product society should produce. 
D)  indicates that to produce more of one product society must give up larger and larger amounts of the other product. 
A)  indicates how much of two products a society can produce. 
B)  reveals how much each additional unit of one product will cost in terms of the other product. 
C)  specifies how much of each product society should produce. 
D)  indicates that to produce more of one product society must give up larger and larger amounts of the other product.

Question 11

-Refer to the diagram below. This production possibilities curve is constructed such that:

Accepted Answer

A)  resources are presumed to be perfectly shiftable between bread and tractors. 
B)  the opportunity cost of bread diminishes as more bread is produced. 
C)  the opportunity cost of tractors diminishes as more bread is produced. 
D)  the opportunity cost of both bread and tractors in terms of each other increases as more of each is produced. 
A)  resources are presumed to be perfectly shiftable between bread and tractors. 
B)  the opportunity cost of bread diminishes as more bread is produced. 
C)  the opportunity cost of tractors diminishes as more bread is produced. 
D)  the opportunity cost of both bread and tractors in terms of each other increases as more of each is produced.

Question 12

As used in economics, the notion of scarce resources means that:

Accepted Answer

A)  mineral deposits are only available in finite amounts. 
B)  resources are not so plentiful that all individuals' material wants can be fulfilled. 
C)  some resources are free while others have price tags on them. 
D)  the quantities available of some resources exceed the demand for them. 
A)  mineral deposits are only available in finite amounts. 
B)  resources are not so plentiful that all individuals' material wants can be fulfilled. 
C)  some resources are free while others have price tags on them. 
D)  the quantities available of some resources exceed the demand for them.

Question 13

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is inversely related to the amount of X in:

Accepted Answer

A)  2 only. 
B)  both 1 and 3. 
C)  3 only. 
D)  1 only. 
A)  2 only. 
B)  both 1 and 3. 
C)  3 only. 
D)  1 only.

Question 14

-Refer to the above table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must:

Accepted Answer

A)  achieve economic growth. 
B)  use its resources more efficiently than the data in the table now indicate. 
C)  allocate its available resources most efficiently among alternative uses. 
D)  achieve the full employment of available resources. 
A)  achieve economic growth. 
B)  use its resources more efficiently than the data in the table now indicate. 
C)  allocate its available resources most efficiently among alternative uses. 
D)  achieve the full employment of available resources.

Question 15

-The slope of line (2) on the above graph is:

Accepted Answer

A)  0. 
B)  .66. 
C)  .75. 
D)  1.50. 
A)  0. 
B)  .66. 
C)  .75. 
D)  1.50.

Question 16

The problems of aggregate inflation and unemployment are:

Accepted Answer

A)  major topics of macroeconomics. 
B)  not relevant to the Canadian economy. 
C)  major topics of microeconomics. 
D)  peculiar to socialistic economies. 
A)  major topics of macroeconomics. 
B)  not relevant to the Canadian economy. 
C)  major topics of microeconomics. 
D)  peculiar to socialistic economies.

Question 17

Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Tammie's trip to the concert is:

Accepted Answer

A)  $300. 
B)  $450. 
C)  $500. 
D)  $600. 
A)  $300. 
B)  $450. 
C)  $500. 
D)  $600.

Question 18

A production possibilities curve shows:

Accepted Answer

A)  that resources are unlimited. 
B)  that people prefer one of the goods more than the other. 
C)  the maximum amounts of two goods which can be produced assuming the full and efficient use of available resources. 
D)  combinations of capital and labour necessary to produce specific levels of output. 
A)  that resources are unlimited. 
B)  that people prefer one of the goods more than the other. 
C)  the maximum amounts of two goods which can be produced assuming the full and efficient use of available resources. 
D)  combinations of capital and labour necessary to produce specific levels of output.

Question 19

-The above data indicates that:

Accepted Answer

A)  consumers spend 80 percent of their after-tax incomes. 
B)  consumers spend 90 percent of their after-tax incomes. 
C)  a tax reduction will reduce consumption. 
D)  the relationship between consumption and after-tax income is random. 
A)  consumers spend 80 percent of their after-tax incomes. 
B)  consumers spend 90 percent of their after-tax incomes. 
C)  a tax reduction will reduce consumption. 
D)  the relationship between consumption and after-tax income is random.

Question 20

Which of the following will shift the production possibilities curve to the right?

Accepted Answer

A)  an increase in the unemployment rate from 6 to 8 percent 
B)  a decline in the efficiency with which the present labour force is allocated 
C)  a decrease in the unemployment rate from 8 to 6 percent 
D)  a technological advance which allows farmers to produce more output from given inputs 
A)  an increase in the unemployment rate from 6 to 8 percent 
B)  a decline in the efficiency with which the present labour force is allocated 
C)  a decrease in the unemployment rate from 8 to 6 percent 
D)  a technological advance which allows farmers to produce more output from given inputs

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the:

-Refer to the above diagram. Which line(s) show(s) a positive vertical intercept?

If a positive relationship exists between x and y:

-Refer to the above production possibilities curve. At the onset of World War II Canada had large amounts of idle human and property resources. Its economic adjustment from peacetime to wartime can best be described by the movement from point:

A positive statement is one which is:

The assertion that "There is no free lunch" means:

-Refer to the above diagram for athletic shoes. If the current output of shoes is Q₁, then:

The production possibilities curve illustrates the basic principle that:

In every economic system, choices must be made because resources are:

Which of the following is not correct? A typical production possibilities curve:

-Refer to the diagram below. This production possibilities curve is constructed such that:

As used in economics, the notion of scarce resources means that:

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is inversely related to the amount of X in:

-Refer to the above table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must:

-The slope of line (2) on the above graph is:

The problems of aggregate inflation and unemployment are:

A production possibilities curve shows:

-The above data indicates that:

Which of the following will shift the production possibilities curve to the right?

The Market System and the Circular Flow

Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Financial Economics

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 1: Limits, Alternatives, and Choices

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the:

-Refer to the above diagram. Which line(s) show(s) a positive vertical intercept?

If a positive relationship exists between x and y:

-Refer to the above production possibilities curve. At the onset of World War II Canada had large amounts of idle human and property resources. Its economic adjustment from peacetime to wartime can best be described by the movement from point:

A positive statement is one which is:

The assertion that "There is no free lunch" means:

-Refer to the above diagram for athletic shoes. If the current output of shoes is Q1, then:

The production possibilities curve illustrates the basic principle that:

In every economic system, choices must be made because resources are:

Which of the following is not correct? A typical production possibilities curve:

-Refer to the diagram below. This production possibilities curve is constructed such that:

As used in economics, the notion of scarce resources means that:

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is inversely related to the amount of X in:

-Refer to the above table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must:

-The slope of line (2) on the above graph is:

The problems of aggregate inflation and unemployment are:

A production possibilities curve shows:

-The above data indicates that:

Which of the following will shift the production possibilities curve to the right?

The Market System and the Circular Flow

Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Financial Economics

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

-Refer to the above diagram for athletic shoes. If the current output of shoes is Q₁, then: