Question 1

From the perspective of economists, which term provides the highest degree of confidence for explaining economic behaviour?

Accepted Answer

A)  an economic principle or a law
B)  a fact
C)  a hypothesis
D)  an assumptionE) A) and B)
F) A) and C)

Question 2

If the equation y = 15 - 4x was plotted, the:

Accepted Answer

A)  vertical intercept would be -4.
B)  vertical intercept would be +4.
C)  vertical intercept would be +9.
D)  slope would be -4.E) B) and D)
F) B) and C)

Question 3

Which of the following is not correct? A typical production possibilities curve:

Accepted Answer

A)  indicates how much of two products a society can produce.
B)  reveals how much each additional unit of one product will cost in terms of the other product.
C)  specifies how much of each product society should produce.
D)  indicates that to produce more of one product society must give up larger and larger amounts of the other product.E) B) and D)
F) B) and C)

Question 4

The budget line shift from cd to ab in the below figure is consistent with:

Accepted Answer

A)  decreases in the prices of both M and N.
B)  an increase in the price of M and a decrease in the price of N.
C)  a decrease in money income.
D)  an increase in money income.E) A) and B)
F) C) and D)

Question 5

(The following economy produces two products.)  Production Possibilities Table
  Refer to the above table.A change from possibility B to C means that:

Accepted Answer

A)  10 units of wheat are given up to get one more unit of steel.
B)  15 units of wheat are given up to get one more unit of steel.
C)  15 units of wheat are equal to one unit of steel.
D)  75 units of wheat are equal to one unit of steel.E) A) and B)
F) C) and D)

Question 6

You should decide to go to a movie:

Accepted Answer

A)  if the marginal cost of the movie exceeds its marginal benefit.
B)  if the marginal benefit of the movie exceeds its marginal cost.
C)  if your income will allow you to buy a ticket
D)  because movies are inherently good products.E) A) and D)
F) A) and B)

Question 7

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) A) and B)
F) A) and C)

Question 8

Through specialization and international trade a nation:

Accepted Answer

A)  can achieve some combination of goods lying outside its production possibilities curve.
B)  can move from a high consumption-low investment to a high investment-low consumption point on its production possibilities curve.
C)  will achieve some combination of goods lying within its production possibilities curve.
D)  will cause its production possibilities curve to shift leftward.E) B) and C)
F) B) and D)

Question 9

Answer on the basis of the relationships shown in the above four figures.The amount of Y is unrelated to the amount of X in:

Accepted Answer

A)  both 2 and 4.
B)  3 only.
C)  2 only.
D)  1E) A) and B)
F) A) and C)

Question 10

1/3x. B) y = 3 + 3/4x. C) y = 4 - 3/4x. D) y = 4 + 11/3x." class="answers-bank-image d-inline" rel="preload" > In the above diagram the equation for this line is:

Accepted Answer

A)  y = 4 - 11/3x.
B)  y = 3 + 3/4x.
C)  y = 4 - 3/4x.
D)  y = 4 + 11/3x.E) A) and B)
F) B) and C)

Question 11

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Accepted Answer

A)  the concavity of the production possibilities curves of such nations has increased.
B)  the production possibilities curves of such nations have shifted inward.
C)  the production possibilities curves of such nations have shifted outward.
D)  these nations are operating at some point outside of their production possibilities curves.E) All of the above
F) A) and B)

Question 12

The slope of a straight line can be determined by:

Accepted Answer

A)  comparing the absolute horizontal change to the absolute vertical change between two points on the line.
B)  comparing the absolute vertical change to the absolute horizontal change between two points on the line.
C)  taking the reciprocal of the vertical intercept.
D)  comparing the percentage vertical change to the percentage horizontal change between two points on the line.E) B) and C)
F) A) and D)

Question 13

The slope of the typical production possibilities curve:

Accepted Answer

A)  is positive.
B)  increases as one moves southeast along the curve.
C)  is constant as one moves down the curve.
D)  decreases as one moves southeast along the curve.E) B) and D)
F) All of the above

Question 14

The vertical intercept of line (2)  on the above graph is:

Accepted Answer

A)  8
B)  12
C)  16
D)  24E) B) and D)
F) All of the above

Question 15

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

Accepted Answer

A)  is unattainable, given currently available resources and technology.
B)  is attainable, but entails economic inefficiency.
C)  is irrelevant because it is inconsistent with consumer preferences.
D)  suggests that opportunity costs are constant.E) A) and C)
F) B) and C)

Question 16

Refer to the above diagram.Which line(s)  show(s)  a negative vertical intercept?

Accepted Answer

A)  C only
B)  both C and E
C)  B, C, and E
D)  both B and CE) B) and C)
F) A) and B)

Question 17

Consumers might leave a fast-food restaurant without being served because:

Accepted Answer

A)  they are misinformed about the marginal cost and marginal benefits of the food being served.
B)  they conclude that the marginal cost (monetary plus time costs)  exceeds the marginal benefit.
C)  the environment is not conducive to a rational choice.
D)  the lines waiting for service are not of equal length.E) A) and B)
F) C) and D)

Question 18

Refer to the above diagram.Starting at point A, the opportunity cost of producing each successive unit of tractors is:

Accepted Answer

A)  a constant 2 units of bread.
B)  2, 4, 6, and 8 units of bread.
C)  8, 6, 4, and 2 units of bread.
D)  the reciprocal of the output of tractors.E) A) and B)
F) All of the above

Question 19

A leftward shift of a consumer's budget line to a position parallel with the original one could indicate that the:

Accepted Answer

A)  price of one product has decreased in relation to the other.
B)  prices of both products have decreased in the same proportion.
C)  marginal utilities derived from both products have decreased.
D)  consumer's money income has increased but the prices of both products have increased proportionately more.E) B) and C)
F) A) and D)

Question 20

Production possibilities (alternatives)   Refer to the above table.A total output of 3 units of capital goods and 4 units of consumer goods:

Accepted Answer

A)  is irrelevant because the economy is capable of producing a larger total output.
B)  will result in the maximum rate of growth available to this economy.
C)  would involve an inefficient use of the economy's scarce resources.
D)  is unobtainable in this economy.E) All of the above
F) A) and B)

Exam 1: Part B: Limits, Alternatives, and Choices

You should decide to go to a movie:

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The vertical intercept of line (2) on the above graph is:

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Which of the following is not correct? A typical production possibilities curve:

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The slope of a straight line can be determined by:

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Production possibilities (alternatives) Refer to the above table.A total output of 3 units of capital goods and 4 units of consumer goods:

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Refer to the above diagram.Starting at point A, the opportunity cost of producing each successive unit of tractors is:

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If the equation y = 15 - 4x was plotted, the:

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The problems of aggregate inflation and unemployment are:

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Refer to the above diagram.Which line(s) show(s) a negative vertical intercept?

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From the perspective of economists, which term provides the highest degree of confidence for explaining economic behaviour?

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Consumers might leave a fast-food restaurant without being served because:

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Through specialization and international trade a nation:

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In the above diagram the equation for this line is:

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The slope of the typical production possibilities curve:

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Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

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(The following economy produces two products.) Production Possibilities Table Refer to the above table.A change from possibility B to C means that:

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The budget line shift from cd to ab in the below figure is consistent with:

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

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Answer on the basis of the relationships shown in the above four figures.The amount of Y is unrelated to the amount of X in:

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A leftward shift of a consumer's budget line to a position parallel with the original one could indicate that the:

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