Question 1

All of the following,except one,are typically macroeconomic topics.Which is the exception?

Accepted Answer

A)  Unemployment.
B)  Interest rates.
C)  Taxation policies.
D)  Marginal utility.
E)  National income. D

Question 2

Below are some production possibilities data for the mystical land of Ghandor.
 
-Refer to the information above to answer this question.Suppose that Ghandor is currently producing combination B How many Viners could be produced if the production of Arrows increased by 2?

Accepted Answer

A)  3 units of Viners.
B)  4 units of Viners.
C)  8 units of Viners.
D)  14 units of Viners. C

Question 3

Below are some production possibilities data for the mystical land of Ghandor.
 
-Refer to the information above to answer this question.Suppose that Ghandor is currently producing combination D What is the opportunity cost of producing an additional 10 units of Viners?

Accepted Answer

A)  1 unit of Arrows.
B)  2 units of Arrows.
C)  10 units of Arrows.
D)  18 units of Arrows. D

Question 4

Below is a production possibilities curve involving tea and videos.
 
-Refer to the graph above to answer this question.What is indicated by the shape of both the PPI and the PPII curves?

Accepted Answer

A)  Constant costs.
B)  Alternative costs.
C)  Increasing costs.
D)  Decreasing costs.

Question 5

The following table shows the production possibilities for the country of Erewhon:
 
-Refer to the table above to answer this question.If Erewhon is producing 23 units of cheese,approximately how many units of wine can it produce?

Accepted Answer

A)  5 units of wine
B)  9 units of wine
C)  14 units of wine
D)  19 units of wine

Question 6

What is true about an economic model?

Accepted Answer

A)  It is built on a series of assumptions.
B)  It establishes cause and effect between variables.
C)  It can make predictions that can be tested with empirical data.
D)  It could also be called an economic theory.
E)  It is built on a series of assumptions,it establishes cause and effect between variables,it can make predictions that can be tested with empirical data,and it could also be called an economic theory.

Question 7

Below is a production possibilities curve involving tea and videos.
 
-Refer to the graph above to answer this question.Assume that the economy is producing on PPI at point A After the shift from PPI to PPII,what does point B represent?

Accepted Answer

A)  An increase in the production of videos but not of tea.
B)  An increase in the production of tea but not of videos.
C)  A decrease in the production of tea but not of videos.
D)  An increase in the production of both goods.

Question 8

Technological improvement can be illustrated graphically by a rightward shift in the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 9

Opportunity cost is the value of the next-best alternative that is given up as a result of making a particular choice.

Accepted Answer

A) True 
 B)False

Question 10

_____________ efficiency refers to 'getting the most for the least'.

Accepted Answer

A)  Technical
B)  Economic
C)  Allocative
D)  Productive

Question 11

1.unemployment in Nova Scotia
2.interest rates
3.wages for farm workers
4.inflation rates
5.government's farm price supports
6.monopoly practices in Canada
-Refer to the above information to answer this question.Which of the above are macroeconomic concepts?

Accepted Answer

A)  2,4 and 6.
B)  1,2 and 4.
C)  2,3 and 6.
D)  2,3 and 5.
E)  1,3 and 4.

Question 12

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.
 
-Refer to Figure 1.13 to answer this question.If Mendork's production is currently that indicated by point a,what is the cost of producing four more guns?

Accepted Answer

A)  1 tonne of butter.
B)  2 tonnes of butter.
C)  6 tonnes of butter.
D)  10 tonnes of butter.

Question 13

Below is a production possibilities curve involving tea and videos.
 
-Refer to the graph above to answer this question.What could have caused the shift from PPI to PPII?

Accepted Answer

A)  A decrease in the price of videos.
B)  Capital accumulation in the tea industry.
C)  A decrease in the opportunity cost of tea.
D)  Technological change in the video industry.

Question 14

All of the following statements,except one,are normative statements.Which is the exception?

Accepted Answer

A)  The government should decrease spending.
B)  Government spending is a topic in macroeconomics.
C)  Cuts to government spending in Canada have had enormous social costs.
D)  Increasing taxes is better than cutting government spending.

Question 15

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.
 
-Refer to Figure 1.13 to answer this question.What is the opportunity cost of producing the first 2 tonnes of butter?

Accepted Answer

A)  2 guns.
B)  18 guns.
C)  20 guns.
D)  The answer cannot be determined from the information given.

Question 16

Below is a production possibilities curve for a large tract of prairie farm land.
 
-Refer to the graph above to answer this question.Given the shape of the PP curve,which of the following statements is correct?

Accepted Answer

A)  The law of increasing costs doesn't apply.
B)  The resources being used to produce rye and wheat are very similar.
C)  The two goods being produced are very similar.
D)  Opportunity costs are constant.
E)  It is better for the economy to product rye.

Question 17

What is the distinction between a positive and a normative statement?

Accepted Answer

A)  Positive statements are assertions that can be tested with data,whereas normative statements are based on a value system of beliefs.
B)  Normative statements are assertions that can be tested with data,whereas positive statements are based on a value system of beliefs.
C)  The distinction depends on the context in which each statement is used.
D)  Positive statements are correct statements of fact,whereas normative statements are incorrect.

Question 18

Which of the following is true about economics?

Accepted Answer

A)  It is a pure science.
B)  It deals in generalities.
C)  It is more complex than reality.
D)  It ignores reality in developing models.

Question 19

The cost of getting a degree (tuition and textbooks)from a private school is $20,000 a year.Evaluate this statement.

Accepted Answer

The answer of The cost of getting a degree (tuition...

Question 20

Which of the following would best describe a policy of laissez-faire?

Accepted Answer

A)  More production of capital goods than consumer goods.
B)  More production of consumer goods than capital goods.
C)  An emphasis on the role of the market.
D)  An emphasis on the role of government.
E)  A reliance on custom.

Exam 1: The Economic Problem

All of the following,except one,are typically macroeconomic topics.Which is the exception?

Below are some production possibilities data for the mystical land of Ghandor. -Refer to the information above to answer this question.Suppose that Ghandor is currently producing combination B How many Viners could be produced if the production of Arrows increased by 2?

Below are some production possibilities data for the mystical land of Ghandor. -Refer to the information above to answer this question.Suppose that Ghandor is currently producing combination D What is the opportunity cost of producing an additional 10 units of Viners?

Below is a production possibilities curve involving tea and videos. -Refer to the graph above to answer this question.What is indicated by the shape of both the PPI and the PPII curves?

The following table shows the production possibilities for the country of Erewhon: -Refer to the table above to answer this question.If Erewhon is producing 23 units of cheese,approximately how many units of wine can it produce?

What is true about an economic model?

Below is a production possibilities curve involving tea and videos. -Refer to the graph above to answer this question.Assume that the economy is producing on PPI at point A After the shift from PPI to PPII,what does point B represent?

Technological improvement can be illustrated graphically by a rightward shift in the production possibilities curve.

Opportunity cost is the value of the next-best alternative that is given up as a result of making a particular choice.

_____________ efficiency refers to 'getting the most for the least'.

1.unemployment in Nova Scotia 2.interest rates 3.wages for farm workers 4.inflation rates 5.government's farm price supports 6.monopoly practices in Canada -Refer to the above information to answer this question.Which of the above are macroeconomic concepts?

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter. -Refer to Figure 1.13 to answer this question.If Mendork's production is currently that indicated by point a,what is the cost of producing four more guns?

Below is a production possibilities curve involving tea and videos. -Refer to the graph above to answer this question.What could have caused the shift from PPI to PPII?

All of the following statements,except one,are normative statements.Which is the exception?

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter. -Refer to Figure 1.13 to answer this question.What is the opportunity cost of producing the first 2 tonnes of butter?

Below is a production possibilities curve for a large tract of prairie farm land. -Refer to the graph above to answer this question.Given the shape of the PP curve,which of the following statements is correct?

What is the distinction between a positive and a normative statement?

Which of the following is true about economics?

The cost of getting a degree (tuition and textbooks)from a private school is $20,000 a year.Evaluate this statement.

Which of the following would best describe a policy of laissez-faire?