Question 1

When an economist says that material wants are insatiable, this means that:

Accepted Answer

A)  economic resources are valuable only because they can be used to produce consumer goods.
B)  economic resources-land, labour, capital, and entrepreneurial ability-are scarce.
C)  these wants are virtually unlimited and therefore incapable of complete satisfaction.
D)  the structure of consumer demand varies from time to time and from country to country.E) A) and C)
F) All of the above C

Question 2

Refer to the diagram below.This production possibilities curve is constructed such that:

Accepted Answer

A)  resources are presumed to be perfectly shiftable between bread and tractors.
B)  the opportunity cost of bread diminishes as more bread is produced.
C)  the opportunity cost of tractors diminishes as more bread is produced.
D)  the opportunity cost of both bread and tractors in terms of each other increases as more of each is produced.E) All of the above
F) C) and D)

Question 3

Which of the following is associated with macroeconomics?

Accepted Answer

A)  an examination of the incomes of the University of Toronto Business School graduates
B)  an empirical investigation of the general price level and unemployment rates in the 2000s
C)  a study of the trend of pecan prices since World War II
D)  a case study of pricing and production in the textbook industryE) A) and D)
F) A) and C)

Question 4

Most of the disagreement among economists involves:

Accepted Answer

A)  facts.
B)  theories.
C)  positive statements.
D)  normative statements.E) B) and C)
F) A) and B)

Question 5

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

Accepted Answer

A)  positive, but incorrect.
B)  positive and correct.
C)  normative, but incorrect.
D)  normative and correct.E) None of the above
F) B) and C)

Question 6

Which of the following is a microeconomic statement?

Accepted Answer

A)  The real domestic output increased by 2.5 percent last year.
B)  Unemployment was 8.3 percent of the labour force last year.
C)  The price of personal computers declined last year.
D)  The general price level increased by 4 percent last year.E) A) and C)
F) None of the above

Question 7

The measured slope of a line:

Accepted Answer

A)  is independent of how the two variables are denominated.
B)  will be affected by how the two variables are denominated.
C)  necessarily diminishes as one moves rightward on the line.
D)  necessarily increases as one moves rightward on the line.E) B) and C)
F) A) and B)

Question 8

1. B) is Q2. C) is Q3. D) is greater than Q3." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram for athletic shoes.The optimal output of shoes:

Accepted Answer

A)  is Q1.
B)  is Q2.
C)  is Q3.
D)  is greater than Q3.E) C) and D)
F) A) and C)

Question 9

The problems of aggregate inflation and unemployment are:

Accepted Answer

A)  major topics of macroeconomics.
B)  not relevant to the Canadian economy.
C)  major topics of microeconomics.
D)  peculiar to socialistic economies.E) None of the above
F) A) and D)

Question 10

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A)  Facing trade-offs
B)  Opportunity cost
C)  Choosing a little more or a little less
D)  The influence of incentivesE) B) and C)
F) A) and B)

Question 11

Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

Accepted Answer

A)  cannot be realized because resources are fully employed.
B)  will cost 1 unit of computers.
C)  will cost 2 units of computers.
D)  will cause some resources to become unemployed.E) A) and B)
F) A) and C)

Question 12

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 30 degrees today.
D)  I enjoy summer evenings when it cools off.E) A) and D)
F) C) and D)

Question 13

Refer to the graph.The movement from line A to line A' represents a change in:

Accepted Answer

A)  the slope only.
B)  the intercept only.
C)  both the slope and the intercept.
D)  neither the slope nor the intercept.E) A) and C)
F) A) and B) B

Question 14

Individuals face an economic problem but society does not.

Accepted Answer

A) True 
 B)False  False

Question 15

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.  Refer to the above table.What is the total opportunity cost of producing two units of capital goods?

Accepted Answer

A)  4 units of consumer goods
B)  5 units of consumer goods
C)  9 units of consumer goods
D)  13 units of consumer goodsE) A) and C)
F) A) and B)

Question 16

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Accepted Answer

A)  attainable, but too costly.
B)  unattainable, given currently available resources and technology.
C)  attainable, but involves unemployment.
D)  irrelevant because it is inconsistent with consumer preferences.E) A) and C)
F) All of the above

Question 17

The production possibilities curve is bowed out from the origin because:

Accepted Answer

A)  marginal benefits are equal.
B)  marginal benefits decrease.
C)  marginal benefits are unpredictable.
D)  marginal benefits decrease and then increase in value.E) All of the above
F) A) and B)

Question 18

Products and services are scarce because resources are scarce.

Accepted Answer

A) True 
 B)False

Question 19

If price (P)  and quantity (Q)  are directly related, this means that:

Accepted Answer

A)  a change in Q will alter P, but a change in P will not alter Q.
B)  if P increases, Q will decrease.
C)  if P increases, Q will also increase.
D)  an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted.E) All of the above
F) A) and B)

Question 20

Recessions are typically characterised by points:

Accepted Answer

A)  inside the production possibilities curve.
B)  outside the production possibilities curve.
C)  on the production possibilities curve.
D)  that are not attainable on the production possibilities curve.E) B) and D)
F) A) and B)

Exam 1: B: Limits, Alternatives, and Choices

When an economist says that material wants are insatiable, this means that:

Correct AnswerverifiedC

Refer to the diagram below.This production possibilities curve is constructed such that:

Correct AnswerverifiedShow Answer

Which of the following is associated with macroeconomics?

Correct AnswerverifiedShow Answer

Most of the disagreement among economists involves:

Correct AnswerverifiedShow Answer

Economics is concerned with using scarce productive resources efficiently in attempting to satisfy society's material wants.This statement is:

Correct AnswerverifiedShow Answer

Which of the following is a microeconomic statement?

Correct AnswerverifiedShow Answer

The measured slope of a line:

Correct AnswerverifiedShow Answer

Refer to the above diagram for athletic shoes.The optimal output of shoes:

Correct AnswerverifiedShow Answer

The problems of aggregate inflation and unemployment are:

Correct AnswerverifiedShow Answer

The cost of the choice you make is what you give up for it, is which of the ten key concepts to retain for a lifetime?

Correct AnswerverifiedShow Answer

Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles:

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

Refer to the graph.The movement from line A to line A' represents a change in:

Correct AnswerverifiedB

Individuals face an economic problem but society does not.

Correct AnswerverifiedFalse

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the total opportunity cost of producing two units of capital goods?

Correct AnswerverifiedShow Answer

Refer to the above diagram.The combination of computers and bicycles shown by point G is:

Correct AnswerverifiedShow Answer

The production possibilities curve is bowed out from the origin because:

Correct AnswerverifiedShow Answer

Products and services are scarce because resources are scarce.

Correct AnswerverifiedShow Answer

If price (P) and quantity (Q) are directly related, this means that:

Correct AnswerverifiedShow Answer

Recessions are typically characterised by points:

Correct AnswerverifiedShow Answer

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C

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B

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False

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