Question 1

Economics is the study of how fairly goods and services are distributed within society.

Accepted Answer

A) True 
 B)False

Question 2

What is almost always the cause of large or persistent inflation?

Accepted Answer

A)   an increase in demand for domestic production
B)   growth in the quantity of money
C)   foreign competition
D)   higher worker productivityE) A) and B)
F) A) and C)

Question 3

Have countdown signals at crosswalks made people safer?

Accepted Answer

A)   yes, because drivers' attention is now more focused on the crosswalks and they are more aware of people crossing the road
B)   yes, because everyone is better informed of the changing lights
C)   no, because people are being more aggressive with the additional information
D)   no, because drivers must take more time processing the information and are not focusing on drivingE) All of the above
F) A) and D)

Question 4

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Accepted Answer

A) True 
 B)False

Question 5

What is one component necessary for markets to work?

Accepted Answer

A)   government intervention
B)   a non-profit sector of society
C)   property rights
D)   abundant resourcesE) A) and C)
F) All of the above

Question 6

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

Accepted Answer

A)   if the marginal cost of teaching increased
B)   if the marginal benefit of teaching increased
C)   if the marginal cost of teaching decreased
D)   if the marginal cost of a corporate job increasedE) B) and C)
F) All of the above

Question 7

What is the primary determinant of a country's standard of living?

Accepted Answer

A)   the ability to reduce foreign competition
B)   the ability to produce goods and services
C)   the total supply of money in the economy
D)   the average age of the country's labour forceE) B) and C)
F) C) and D)

Question 8

What would happen to the study of economics if scarcity disappeared?

Accepted Answer

Since economics is the study of how soci...

Question 9

What would happen if the world's resources were to suddenly double?

Accepted Answer

A)   The scarcity principle would still apply.
B)   The scarcity principle would not be relevant.
C)   Everyone's wants would be met.
D)   No tradeoffs would be needed.E) C) and D)
F) A) and D)

Question 10

What is likely to occur when the government implements programs such as progressive income tax rates?

Accepted Answer

A)   Equity and efficiency are increased.
B)   Equity is increased and efficiency is decreased.
C)   Equity is decreased, and efficiency is increased.
D)   Equity is decreased, and efficiency is decreased.E) A) and B)
F) B) and C)

Question 11

In each of the following decision situations, show what tradeoffs are involved.
a) You are driving and need to decide how fast to drive.
b) You meet a young lady at a party and you are considering whether to ask her out.
c) You like a co-worker whom you have known for a couple of years, and you need to decide whether to go on a date with him.
d) You ponder moving back with your parents.
e) You need to decide whether to buy a used or a new car.
f) You are thinking about opening a computer services business in your basement.
g) You are a consultant for the City of Toronto. The city council asks you to analyze the implications of a new high-rise office building in downtown.

Accepted Answer

a) Driving faster gets you earlier to yo...

Question 12

What causes almost all variation in living standards in different countries?

Accepted Answer

A)   population growth rates
B)   endowments of natural resources
C)   proximity to foreign markets
D)   productivityE) All of the above
F) C) and D)

Question 13

Which activity will most likely result in an external benefit?

Accepted Answer

A)   a student buys a used car so they can deliver pizzas at night
B)   a group of children clean up a local neighbourhood park
C)   a teenager purchases a book to read on the weekend
D)   a parent buys their child a new snow suitE) B) and D)
F) All of the above

Question 14

What does inflation cause?

Accepted Answer

A)   incomes to fall
B)   productivity to increase
C)   the government to lower taxes
D)   the value of money to fallE) A) and D)
F) All of the above

Question 15

What will be the probable outcome if Honduras chooses to engage in trade?

Accepted Answer

A)   It will only benefit if it trades with countries that produce goods it cannot produce.
B)   It cannot benefit if it trades with less developed countries.
C)   It will only benefit if it trades with countries that are geographically close to Honduras.
D)   It can benefit by trading with any other country.E) All of the above
F) B) and C)

Question 16

If Canada decides to trade with Brazil, what do we know about the probable outcome?

Accepted Answer

A)   Brazil will be better off, but trade with a less developed country will not help Canada.
B)   It will not benefit Brazil because workers in Canada are more productive.
C)   It will benefit Brazil because workers in Canada are more productive.
D)   Brazil and Canada can both be better off.E) None of the above
F) C) and D)

Question 17

What is a marginal change?

Accepted Answer

A)   a long-term trend
B)   a large, significant adjustment
C)   a change for the worse, and so is usually short term
D)   a small incremental adjustmentE) B) and C)
F) None of the above

Question 18

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Accepted Answer

A)   Productivity is higher in Norway than in Belize.
B)   Norway has a more industrial economy than Belize.
C)   There is more competition in Norway than in Belize.
D)   Labour unions are more aggressive in Norway than in Belize.E) A) and B)
F) None of the above

Question 19

What do we know about college-age athletes who drop out of college to play professional sports?

Accepted Answer

A)   They are not rational decision makers.
B)   They are well aware that their opportunity cost of attending college is very high.
C)   They are concerned more about present circumstances than their future.
D)   They underestimate the value of a college education.E) C) and D)
F) B) and D)

Question 20

Trade with any nation can be mutually beneficial.

Accepted Answer

A) True 
 B)False

Exam 1: Ten Principles of Economics

What would happen if the world's resources were to suddenly double?

Correct Answer
verified

What is the primary determinant of a country's standard of living?

Correct Answer
verified

Which activity will most likely result in an external benefit?

Correct Answer
verified

What does inflation cause?

Correct Answer
verified

What is one component necessary for markets to work?

Correct Answer
verified

What is almost always the cause of large or persistent inflation?

Correct Answer
verified

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Correct Answer
verified

Have countdown signals at crosswalks made people safer?

Correct Answer
verified

Economics is the study of how fairly goods and services are distributed within society.

Correct Answer
verified

What would happen to the study of economics if scarcity disappeared?

Correct Answer
verified
Since economics is the study of how soci...
View Answer

What is likely to occur when the government implements programs such as progressive income tax rates?

Correct Answer
verified

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Correct Answer
verified

What will be the probable outcome if Honduras chooses to engage in trade?

Correct Answer
verified

If Canada decides to trade with Brazil, what do we know about the probable outcome?

Correct Answer
verified

Trade with any nation can be mutually beneficial.

Correct Answer
verified

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

Correct Answer
verified

What do we know about college-age athletes who drop out of college to play professional sports?

Correct Answer
verified

What causes almost all variation in living standards in different countries?

Correct Answer
verified

What is a marginal change?

Correct Answer
verified

Correct Answer
verified
a) Driving faster gets you earlier to yo...
View Answer

Exam 1: Ten Principles of Economics

What would happen if the world's resources were to suddenly double?

Correct AnswerverifiedShow Answer

What is the primary determinant of a country's standard of living?

Correct AnswerverifiedShow Answer

Which activity will most likely result in an external benefit?

Correct AnswerverifiedShow Answer

What does inflation cause?

Correct AnswerverifiedShow Answer

What is one component necessary for markets to work?

Correct AnswerverifiedShow Answer

What is almost always the cause of large or persistent inflation?

Correct AnswerverifiedShow Answer

If the average income of a Norwegian is higher than the average income of a Belizean, what is the most likely reason?

Correct AnswerverifiedShow Answer

Have countdown signals at crosswalks made people safer?

Correct AnswerverifiedShow Answer

Economics is the study of how fairly goods and services are distributed within society.

Correct AnswerverifiedShow Answer

What would happen to the study of economics if scarcity disappeared?

Correct AnswerverifiedSince economics is the study of how soci...View AnswerShow Answer

What is likely to occur when the government implements programs such as progressive income tax rates?

Correct AnswerverifiedShow Answer

Trade allows each person to specialize in the activities he or she does best, thus increasing each individual's productivity.

Correct AnswerverifiedShow Answer

What will be the probable outcome if Honduras chooses to engage in trade?

Correct AnswerverifiedShow Answer

If Canada decides to trade with Brazil, what do we know about the probable outcome?

Correct AnswerverifiedShow Answer

Trade with any nation can be mutually beneficial.

Correct AnswerverifiedShow Answer

Your professor loves her work teaching economics. She has been offered other positions in the corporate world making 25 percent more but has decided to stay in teaching. What might change her decision?

Correct AnswerverifiedShow Answer

What do we know about college-age athletes who drop out of college to play professional sports?

Correct AnswerverifiedShow Answer

What causes almost all variation in living standards in different countries?

Correct AnswerverifiedShow Answer

What is a marginal change?

Correct AnswerverifiedShow Answer

Correct Answerverifieda) Driving faster gets you earlier to yo...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Since economics is the study of how soci...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a) Driving faster gets you earlier to yo...
View Answer