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1 | |
The economic problem can be summarized as: |
| | A) | the existence of extreme poverty in many parts of the world. |
| | B) | having limited resources and unlimited wants. |
| | C) | the need to limit economic wants given the abundance of resources. |
| | D) | the hardship associated with high unemployment. |
| | E) | the hardship associated with high inflation. |
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2 | |
Which of the following is not an economic resource? |
| | A) | land used to build a shopping mall |
| | B) | a combine harvester purchased by a wheat farmer |
| | C) | a computer bought by a family for home use |
| | D) | the services of a corporate lawyer |
| | E) | an inventor's effort in developing a new product |
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3 | |
Identify the topic considered part of microeconomics. |
| | A) | keeping track of unemployment in Canada |
| | B) | analyzing the reasons for fluctuations in the price of oil |
| | C) | calculating changes in Canada's total output |
| | D) | providing suggestions to reduce Canadian inflation |
| | E) | assessing Canada's balance of international payments |
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4 | |
When studying the relationship between the size of Canada's population and the quantity of TVs sold in Canada: |
| | A) | population is the independent variable, the quantity of TVs is the dependent variable, and their relationship is direct. |
| | B) | population is the dependent variable, the quantity of TVs is the independent variable, and their relationship is inverse. |
| | C) | population is the dependent variable, the quantity of TVs is the independent variable, and their relationship is direct. |
| | D) | population is the independent variable, the quantity of TVs is the dependent variable, and their relationship is inverse. |
| | E) | both population and the quantity of TVs are independent variables, and there is no relationship between them. |
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5 | |
Identify which of the following is a normative statement. |
| | A) | Inflation and unemployment are inversely related. |
| | B) | An increase in the price of butter will reduce the quantity of butter sold. |
| | C) | Cutting the inequality of incomes is more important than reducing inflation. |
| | D) | If unemployment is reduced, there will be an increase in the rate of economic growth. |
| | E) | Income inequality in Canada has increased in recent years. |
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6 | |
The opportunity cost of a particular product is: |
| | A) | the price of all economic resources used to make the product. |
| | B) | the sum of all monetary costs associated with the product. |
| | C) | independent of the preferences of the consumer who buys the product. |
| | D) | the utility that could have been gained by choosing the product's best alternative. |
| | E) | the price that the product sells for. |
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7 | |
Which of the following is not an assumption of the production possibilities model? |
| | A) | The economy makes only one product. |
| | B) | There is a set of amount of economic resources in the economy. |
| | C) | The state of technology is fixed. |
| | D) | All economic resources are employed. |
| | E) | All economic resources are used to their full capacity. |
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8 | |
A country's production possibilities curve shows: |
| | A) | all possible output combinations that a country can produce. |
| | B) | which economic resources a country can use in production. |
| | C) | all possible combinations of economic resources needed to produce a certain output. |
| | D) | the possible output combinations a country's citizens wish to produce. |
| | E) | the possible input combinations a country's citizens wish to employ. |
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9 | |
Points outside the production possibilities curve: |
| | A) | are attainable only if all resources are fully employed and used to their greatest capacity. |
| | B) | mean that some economic resources are unemployed. |
| | C) | mean that some economic resources are being used at less than full capacity. |
| | D) | are not presently attainable. |
| | E) | are attainable. |
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10 | |
The law of increasing opportunity cost: |
| | A) | depends on the fact that economic resources shift perfectly from one item to another. |
| | B) | states that as more of one item is produced, extra units of the item have a higher opportunity cost. |
| | C) | applies only at points inside the production possibilities curve. |
| | D) | applies only at points outside the production possibilities curve. |
| | E) | states that as less of one item is produced, the item's opportunity cost increases. |
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11 | |
Which of the following is one of the basic economic questions? |
| | A) | Who should produce? |
| | B) | Where to produce? |
| | C) | What to produce? |
| | D) | Why produce? |
| | E) | When to produce? |
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12 | |
Which type of economic system provides consumers with the most sovereignty? |
| | A) | a traditional economy |
| | B) | a market economy |
| | C) | a command economy |
| | D) | a modern mixed economy |
| | E) | a traditional mixed economy |
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13 | |
Which of the following is not considered to be an economic goal by most Canadians? |
| | A) | full employment |
| | B) | price stability |
| | C) | economic growth |
| | D) | perfectly equal incomes |
| | E) | economic efficiency |
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14 | |
Which of the following economic goals is often in conflict with economic growth? |
| | A) | Environmental sustainability |
| | B) | economic efficiency |
| | C) | a viable balance of payments |
| | D) | full employment |
| | E) | none of the above |
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15 | |
Adam Smith argued that: |
| | A) | the invisible hand of competition ensures that producers' interests are maximized. |
| | B) | the invisible hand of competition is applicable to governments just as much as to competitive markets. |
| | C) | the invisible hand of competition ensures that consumers' interests are maximized. |
| | D) | governments should be significantly involved in the production and distribution of economic output. |
| | E) | the invisible hand of competition applies to monopolies as well as competitive markets. |
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