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1 | |
Property rights... |
| | A) | Are an important feature of the market system |
| | B) | Encourage investment, innovation and exchange so as to earn a profit |
| | C) | Extend to intellectual property through patents, copy-rights and trademarks |
| | D) | All of the other choices |
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2 | |
Fred wants to ask his boss for every second weekend off so he can go to visit his mom up north. His boss needs him to work these weekends because the restaurant is very busy at this time. Which characteristic of the market system is illustrated here? |
| | A) | Private property |
| | B) | Freedom of enterprise and choice |
| | C) | Self interest |
| | D) | Competition |
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3 | |
In competitive markets... |
| | A) | There are many buyers and sellers which can work together to influence market prices |
| | B) | There are few buyers and sellers both of which can influence the market price |
| | C) | There are many buyers and sellers neither of which has freedom to enter or exit the market |
| | D) | There are many buyers and sellers with the ability to enter and exit the market |
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4 | |
Canada sells its natural resources such as wheat to Japan. Japan sells Canada cars. The fact that Canada focuses on the production of a few goods is called... |
| | A) | Round-a-about production |
| | B) | Geographic specialization |
| | C) | Division of labour |
| | D) | None of the choices |
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5 | |
Which of the following is an example of division of labour |
| | A) | An auto plant which has different employees working on different parts of a car on an assembly line |
| | B) | A crafts person producing an elegant vase |
| | C) | The Province of Newfoundland focusing on the production of pulp and paper |
| | D) | A student who does all the chores in his/her household |
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6 | |
If I agree to do your homework and you agree to watch my dog over the weekend, then... |
| | A) | This is an example of specialization |
| | B) | This is an example of a monetary exchange |
| | C) | This is an example of division of labour |
| | D) | This is an example of barter |
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7 | |
What main advantage does monetary exchange have over barter? |
| | A) | Money is less bulky to carry around that traded goods |
| | B) | Almost anything can be money as long as it is accepted as a median of exchange |
| | C) | Money overcomes the problem of "coincidence of wants." |
| | D) | None of the above |
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8 | |
Which of the following mainly determines "what goods and services will be produced" in a market system? |
| | A) | Only those goods which continue to be demanded by consumers will be produced |
| | B) | Only those goods which are profitable to suppliers will be produced |
| | C) | The production of goods and services in a market system depends on the self interest of both producers and consumers |
| | D) | All of the other choices |
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9 | |
Which of the following is an example of derived demand? |
| | A) | The demand for personal computers by teenagers in Canada |
| | B) | The demand for forestry workers in a B.C. forest. |
| | C) | The demand for McDonald's hamburgers in Toronto. |
| | D) | The demand for internet services |
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10 | |
The ability to change consumer tastes to generate changes in demand, prices and producer supplies is called... |
| | A) | Price equilibrium |
| | B) | The guiding function of prices |
| | C) | The rationing function of prices |
| | D) | None of the above |
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11 | |
Which of the following statements best illustrates the concept of the "invisible hand." |
| | A) | Consumers will only purchase products that suit their best interest |
| | B) | Producers enter into an industry in response to increased profits as consumer demand for certain goods raises prices |
| | C) | By seeking their own self-interest, producers will inadvertently satisfy the self- interest of society as a whole. |
| | D) | None of the above |
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12 | |
Jamie currently works as a part-time teacher, but she wants to be a full-time teacher. As a result, she takes many teaching courses goes to seminars and tries to improve her computer skills to become a more productive teacher. Which of the following virtues of the market system are best illustrated here? |
| | A) | Efficiency |
| | B) | Incentives |
| | C) | Freedom |
| | D) | None of the other choices |
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13 | |
Recently, government authorities in Toronto, Canada passed a by-law making it illegal to smoke in public restaurants. This shows that smoking |
| | A) | Is a public good |
| | B) | Has some spillover benefits as a result of increased business for restaurant |
| | C) | Has a harmful effect on a restaurant's profits. |
| | D) | Is a spillover cost, since a cost is imposed without compensation on patrons by smokers |
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14 | |
Which of the following is an example of a "spillover benefit"? |
| | A) | A public flower garden |
| | B) | Education |
| | C) | Public health care |
| | D) | All of the above |
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15 | |
Governments will provide public goods if... |
| | A) | The additional benefits to society of consuming the good exceed the additional costs to society |
| | B) | The additional benefits to the market of producing the good exceed the additional costs to the market |
| | C) | The additional benefits to government of producing the good exceed the additional costs to government |
| | D) | None of the above |
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16 | |
Which of the following is not a characteristic of public goods? |
| | A) | They are indivisible |
| | B) | Consumers can be excluded from using them. |
| | C) | Consumers can receive benefits from them without paying |
| | D) | None of the above |
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17 | |
If I can get the benefits of publicly provided national defense without paying for it, I would be, according to an economist... |
| | A) | A thief |
| | B) | Increasing my marginal utility |
| | C) | A free rider |
| | D) | None of the above |
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18 | |
The main difference between public goods and private goods is... |
| | A) | Private goods are indivisible while public goods are not |
| | B) | Consumers can be excluded from consuming private goods but not public goods |
| | C) | Public goods must be purchased by private individuals before they can be enjoyed |
| | D) | None of the other choices |
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19 | |
A good from which consumers could be excluded, but government provides because of its large spillover effects is called... |
| | A) | An exclusive good |
| | B) | A semi-public good |
| | C) | A public good |
| | D) | A quasi-public good |
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20 | |
One role of government in a market system is to act as... |
| | A) | A decision-maker about which public goods are to be produced |
| | B) | An overseer of the market system |
| | C) | A collector of taxes from householders and business to finance public goods provision |
| | D) | All of the other choices |
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21 | |
Most services are found in the... |
| | A) | Primary sector |
| | B) | Secondary sector |
| | C) | Tertiary sector |
| | D) | None of the above |
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22 | |
Which of the following goods are non-exclusive? |
| | A) | Baseball tickets |
| | B) | A park bench |
| | C) | Music lessons |
| | D) | Private schools |
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23 | |
Which of the following would cause the market system to break down? |
| | A) | A lack of self- interest or profit motive. |
| | B) | A lack of property rights |
| | C) | The existence of only a few buyers and sellers who can control prices |
| | D) | All of the above |
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24 | |
Spillover costs... |
| | A) | Cause the costs to individuals to be higher than the costs of society |
| | B) | Result in too much of the good being produced or consumed |
| | C) | Result in an under allocation of resources to the production of the good |
| | D) | None of the above |
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25 | |
The term "dollar votes" means... |
| | A) | Consumer demands in dollars for various products will determine whether or not these products get produced in a market economy. |
| | B) | Consumers vote for their favourite products over the internet |
| | C) | Firms decide how much of a good to produce based on consumer surveys of the good |
| | D) | None of the above |
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2002 McGraw-Hill Higher Education