Question 1

Because of scarcity,the efficient use of resources is:

Accepted Answer

A)  an important economic goal in all economies
B)  an important economic goal only in command economies
C)  an important economic goal only in market economies
D)  not an important economic goal
E)  an important economic goal only in traditional economiesF) B) and D)
G) C) and D)

Question 2

The concept of opportunity cost:

Accepted Answer

A)  is irrelevant in command economies because of central planning
B)  suggests that resources are often unlimited in quantity
C)  is irrelevant if the production possibilities curve is shifting to the right
D)  suggests that inexhaustible wants can be fulfilled
E)  suggests that the use of resources in any particular line of production means that alternative outputs must be forgoneF) A) and D)
G) B) and D)

Question 3

The Kyoto Protocol:

Accepted Answer

A)  aimed to increase emissions of so-called greenhouse gases, in particular carbon dioxide
B)  was signed by over 170 countries, including Canada
C)  ensured that all countries in the world cut greenhouse gases until 2012
D)  requirements were met by Canada, but by few other countries
E)  imposed a global carbon taxF) D) and E)
G) B) and C)

Question 4

The notion of opportunity cost:

Accepted Answer

A)  applies to consumers, but not to businesses
B)  applies to businesses, but not to consumers
C)  is relevant to economies of all ideological persuasions
D)  would disappear if we were able to eliminate poverty
E)  does not apply to governmentsF) B) and C)
G) All of the above

Question 5

Consider the following table:   After-Tax Income  Consumption $1000$90020001800300027004000360050004500\begin{array} { | c | c | } \hline 	ext { After-Tax Income } & 	ext { Consumption } \\hline \$ 1000 & \$ 900 \\hline 2000 & 1800 \\hline 3000 & 2700 \\hline 4000 & 3600 \\hline 5000 & 4500 \\hline\end{array} After-Tax Income $10002000300040005000​ Consumption $9001800270036004500​​  These data suggest that:

Accepted Answer

A)  consumption varies inversely with after-tax incomes
B)  consumption varies directly with after-tax incomes
C)  consumption and after-tax income are unrelated
D)  a tax increase will increase consumption
E)  a tax decrease will decrease consumption F) B) and C)
G) B) and D)

Question 6

Production Possibilities  (alternatives)   A  B  C  D  E  F  TVs 543210 Stereos 059121415\begin{array} { | l | c | c | c | c | c | c | } \hline & { 	ext { Production Possibilities } } \&  { 	ext { (alternatives)  } } \\hline & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } & 	ext { F } \\hline 	ext { TVs } & 5 & 4 & 3 & 2 & 1 & 0 \\hline 	ext { Stereos } & 0 & 5 & 9 & 12 & 14 & 15 \\hline\end{array} TVs  Stereos ​ Production Possibilities  (alternatives)   A 50​ B 45​ C 39​ D 212​ E 114​ F 015​​ 
-To produce a total output of 3 TVs and 13 stereos,this economy must:

Accepted Answer

A)  undergo an outward shift in its production possibilities curve
B)  ignore the notion of opportunity cost
C)  distribute its available resources more efficiently among alternative uses
D)  achieve the full employment of available resources
E)  leave some of its available resources idle F) A) and B)
G) None of the above

Question 7

Any point inside the production possibilities curve indicates:

Accepted Answer

A)  that resources are imperfectly shiftable among alternative uses
B)  the presence of inflationary pressures
C)  that more output could be produced with available resources
D)  that the economy is saving a part of its income
E)  that some of an economy's potential output is not desired by consumersF) A) and E)
G) A) and B)

Question 8

The achievement of full employment frequently conflicts with the economic goal of:

Accepted Answer

A)  economic efficiency
B)  economic growth
C)  income equity
D)  a viable balance of payments
E)  price stabilityF) A) and C)
G) A) and E)

Question 9

The money payments made to owners of human resources are:

Accepted Answer

A)  wages, salaries, or interest
B)  wages, salaries, or rent
C)  interest or profit
D)  wages, salaries, or profit
E)  rent or profitF) B) and C)
G) B) and E)

Question 10

Suppose an economist says "Ceteris paribus,the lower the price of the breakfast cereal,Wheaties,the larger the amount of Wheaties purchased." This statement indicates that:

Accepted Answer

A)  the quantity of Wheaties purchased determines the price of Wheaties
B)  all factors other than the price of Wheaties (for example, consumer preferences and incomes)  are assumed to be constant
C)  economists can conduct controlled laboratory experiments
D)  one cannot generalize about the relationship between the price of Wheaties and quantity purchased
E)  the price and quantity demanded of Wheaties are directly relatedF) C) and D)
G) All of the above

Question 11

Which of the following is a positive statement?

Accepted Answer

A)  The humidity is too high today.
B)  It is too hot to jog today.
C)  The temperature is 22°C.
D)  I enjoy summer evenings when it cools off.
E)  I dislike humid nights.F) C) and E)
G) C) and D)

Question 12

The basic purpose of the ceteris paribus assumption is to:

Accepted Answer

A)  isolate the relationship between two variables by assuming all other factors remain constant
B)  allow one to focus upon micro variables by ignoring macro variables
C)  allow one to focus upon macro variables by ignoring micro variables
D)  determine whether x causes y or vice versa
E)  determine whether two variables are directly or inversely relatedF) A) and B)
G) None of the above

Question 13

The scarcity problem:

Accepted Answer

A)  persists only because countries have failed to achieve continual full employment
B)  persists because a society's consumer wants exceed its available economic resources
C)  has been eliminated in all industrialized nations
D)  has been eliminated in affluent societies such as Canada and the United States
E)  is eliminated when a nation has achieved full employmentF) C) and D)
G) All of the above

Question 14

Economics can best be described as the study of how:

Accepted Answer

A)  to profitably to invest one's income in stocks and bonds
B)  to manage household expenses
C)  government policies affect businesses and labour
D)  to manage business enterprises for profit
E)  to distribute limited resources among alternative endsF) A) and D)
G) B) and C)

Question 15

-Points A,B,C,D,and E show:

Accepted Answer

A)  that the opportunity cost of bicycles increases while that of computers is constant
B)  combinations of bicycles and computers that a society can produce by fully employing its resources
C)  that the opportunity cost of computers increases while that of bicycles is constant
D)  that the demand for computers is greater than the demand for bicycles
E)  that the opportunity cost of both bicycles and computers are constantF) A) and B)
G) A) and E)

Question 16

Which of the following expressions best states the idea of opportunity cost?

Accepted Answer

A)  "A penny saved is a penny earned."
B)  "He who hesitates is lost."
C)  "There is no such thing as a free lunch."
D)  "All that glitters is not gold."
E)  "Watch the pennies, and the pounds will look after themselves."F) None of the above
G) A) and B)

Question 17

Which of the following is a normative statement?

Accepted Answer

A)  The temperature is high today.
B)  The humidity is high today.
C)  It is too hot to play tennis today.
D)  It will cool off later this evening.
E)  I think it will be hot today.F) A) and E)
G) D) and E)

Question 18

The study of economics is carried out because:

Accepted Answer

A)  government interferes with the efficient distribution of scarce resources
B)  resources are scarce in relation to consumer wants
C)  the market system is an obstacle to the efficient use of plentiful resources to satisfy limited wants
D)  resources are overly abundant as compared with wants and, therefore, a distribution problem exists
E)  government aids in the efficient distribution of scarce resourcesF) A) and D)
G) D) and E)

Question 19

Economic models:

Accepted Answer

A)  are useless because they are not based upon laboratory experiments
B)  deal with a multitude of details
C)  are generalizations of economic reality
D)  are abstractions of reality and are, therefore, of no use to economists
E)  are more effective the more complex they areF) A) and C)
G) A) and B)

Question 20

The problem of economic scarcity forces every country to determine:

Accepted Answer

A)  the shape of its production possibilities curve
B)  the amount of economic resources that can be employed in production
C)  what, how, and for whom to produce
D)  the ways that individuals can pursue their own self-interest
E)  how to plan to overcome scarcityF) A) and D)
G) A) and E)

Exam 1: The Economic Problem

The basic purpose of the ceteris paribus assumption is to:

Correct Answer
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The study of economics is carried out because:

Correct Answer
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Consider the following table: $\begin{array} { | c | c | } \hline \text { After-Tax Income } & \text { Consumption } \\\hline \$ 1000 & \$ 900 \\\hline 2000 & 1800 \\\hline 3000 & 2700 \\\hline 4000 & 3600 \\\hline 5000 & 4500 \\\hline\end{array}$ These data suggest that:

Correct Answer
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The concept of opportunity cost:

Correct Answer
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-Points A,B,C,D,and E show:

Correct Answer
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Because of scarcity,the efficient use of resources is:

Correct Answer
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Economic models:

Correct Answer
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Which of the following expressions best states the idea of opportunity cost?

Correct Answer
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Economics can best be described as the study of how:

Correct Answer
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Any point inside the production possibilities curve indicates:

Correct Answer
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The notion of opportunity cost:

Correct Answer
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The Kyoto Protocol:

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Which of the following is a normative statement?

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The problem of economic scarcity forces every country to determine:

Correct Answer
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The money payments made to owners of human resources are:

Correct Answer
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Which of the following is a positive statement?

Correct Answer
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The achievement of full employment frequently conflicts with the economic goal of:

Correct Answer
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Suppose an economist says "Ceteris paribus,the lower the price of the breakfast cereal,Wheaties,the larger the amount of Wheaties purchased." This statement indicates that:

Correct Answer
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The scarcity problem:

Correct Answer
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Exam 1: The Economic Problem

The basic purpose of the ceteris paribus assumption is to:

Correct AnswerverifiedShow Answer

The study of economics is carried out because:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The concept of opportunity cost:

Correct AnswerverifiedShow Answer

-Points A,B,C,D,and E show:

Correct AnswerverifiedShow Answer

Because of scarcity,the efficient use of resources is:

Correct AnswerverifiedShow Answer

Economic models:

Correct AnswerverifiedShow Answer

Which of the following expressions best states the idea of opportunity cost?

Correct AnswerverifiedShow Answer

Economics can best be described as the study of how:

Correct AnswerverifiedShow Answer

Any point inside the production possibilities curve indicates:

Correct AnswerverifiedShow Answer

The notion of opportunity cost:

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The Kyoto Protocol:

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Which of the following is a normative statement?

Correct AnswerverifiedShow Answer

The problem of economic scarcity forces every country to determine:

Correct AnswerverifiedShow Answer

The money payments made to owners of human resources are:

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

The achievement of full employment frequently conflicts with the economic goal of:

Correct AnswerverifiedShow Answer

Suppose an economist says "Ceteris paribus,the lower the price of the breakfast cereal,Wheaties,the larger the amount of Wheaties purchased." This statement indicates that:

Correct AnswerverifiedShow Answer

The scarcity problem:

Correct AnswerverifiedShow Answer

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