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| 1 | |
According to economists, the problem of scarcity exists because: |
| | A) | most people don't understand economics. |
| | B) | productive resources are limited. |
| | C) | human beings are inherently insecure. |
| | D) | people make irrational decisions. |
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| 2 | |
Comparing the additional benefits gained from a new machine and the extra cost involved is called |
| | A) | marginal analysis |
| | B) | the scientific method |
| | C) | opportunity cost |
| | D) | macroeconomics |
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| 3 | |
Jason notices that there are more car accidents in the summertime; he concludes that warm weather makes drivers careless. This is an example of |
| | A) | the fallacy of composition |
| | B) | marginal utility |
| | C) | correlation but not causation |
| | D) | scientific reasoning |
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| 4 | |
The lower the price of a product, the greater the quantity consumers will want to purchase. An underlying assumption of this principle is that |
| | A) | the whole is not greater than the sum of the parts |
| | B) | economic goals are complementary and not conflicting |
| | C) | economic analysis is normative |
| | D) | all variables except those being examined are held constant |
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| 5 | |
If we study the total rate of unemployment in Canada, our analysis would be classified as |
| | A) | macroeconomics |
| | B) | microeconomics |
| | C) | positive economics |
| | D) | normative economics |
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| 6 | |
Sandra states "there is a high correlation between consumption and income". Vijay replies that the correlation occurs because "people consume too much of their income and don't save enough". |
| | A) | both Sandra's and Vijay's statements are positive. |
| | B) | both Sandra's and Vijay's statements are normative. |
| | C) | Sandra's statement is positive and Vijay's statement is normative. |
| | D) | Sandra's statement is normative and Vijay's statement is positive. |
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| 7 | |
Which of the following is an example of a trade-off? |
| | A) | the more hours you work, as a student, the less study time you have. |
| | B) | spending more money on textbooks means you have less to take a friend out to a movie. |
| | C) | the Bank of Canada raises interest rates to lower inflation, but the unemployment rate rises in the process. |
| | D) | all of the above |
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| 8 | |
If a farmer grows a larger crop one year, he/she will likely receive more income. To reason further that if all farmers grew larger crops one year they will likely receive more income is an example of |
| | A) | the after this, therefore because of this fallacy |
| | B) | the fallacy of composition |
| | C) | bias |
| | D) | loaded terminology |
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| 9 | |
Economists |
| | A) | use both the economic perspective and the scientific method. |
| | B) | use the economic perspective but not the scientific method. |
| | C) | make positive economic statements, but not normative economic statements. |
| | D) | reject theorizing as being impractical. |
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| 10 | |
The large increase in the number of employed women since the 1960s illustrates a shift in which factor of production? |
| | A) | capital |
| | B) | labour |
| | C) | social values |
| | D) | incomes |
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| 11 | |
To an economist, the term "land" means |
| | A) | all commercial and residential real estate available for sale. |
| | B) | all productive resources. |
| | C) | all natural resources used to produce goods and services. |
| | D) | all publicly and privately owned land in a given country. |
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| 12 | |
A faster, cheaper method of producing aluminum would make society's production possibilities curve |
| | A) | shift out (up and to the right). |
| | B) | shift in (down and to the left). |
| | C) | stay the same. |
| | D) | change, but we cannot predict how. |
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| 13 | |
On a graph, a point within a production possibilities curve is |
| | A) | an indication of full employment. |
| | B) | unattainable. |
| | C) | the maximum amount that can be produced. |
| | D) | inefficient. |
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| 14 | |
The difference between capital goods and consumer goods is that |
| | A) | capital goods are used up more slowly than consumer goods. |
| | B) | consumer goods satisfy human wants directly, while capital goods do not. |
| | C) | consumer goods are bought by individuals, while capital goods are bought by businesses. |
| | D) | capital goods satisfy human wants directly, while consumer goods do not. |
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| 15 | |
The opportunity cost of a new public stadium is the |
| | A) | operating cost of running the new stadium |
| | B) | cost of constructing the new stadium in the future |
| | C) | change in the real estate tax rate to pay off the new stadium |
| | D) | cost of other goods and services that must be sacrificed to construct the new stadium |
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