If the desire for leisure increased, the wage rate would
A) rise and employment would fall.
B) rise and employment would rise.
C) fall and employment would fall.
D) fall and employment would rise.
E) fall and employment would rise or fall.
Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are
available on the world market for $7. Canadian widget producers convince the
government to protect the domestic industry from cheap imports. If the Canadian
government sets an import quota of 8 million widgets, the resulting price of a widget in
Canada will be ________, and domestic production will be ________.
A) $6; 40 million
B) $7; 36 million
C) $8; 32 million
D) $9; 28 million
E) $10; 32 million
To increase the demand for union labour, unions do all of the following except
A) support increases in the minimum wage.
B) support increases in import restrictions.
C) encourage people to buy goods made by unionized workers.
D) support an increase in the supply of foreign workers.
E) support training schemes and apprenticeship programs.
Which one of the following statements is false?
A) An effective minimum wage sets the wage rate above the equilibrium wage rate.
B) An effective rent ceiling sets the rent below the equilibrium rent.
C) An effective rent ceiling leads to a housing shortage.
D) An effective minimum wage is inefficient.
E) A minimum wage is a price ceiling in the labour market.
Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve,
the labour supply curve, and the marginal cost of labour curve. If this labour market is
controlled by a monopsony, the wage rate is
A) $7 an hour.
B) $6 an hour.
C) $3 an hour.
D) $5 an hour.
E) zero, because the market would shut down.
The Coase theorem will apply only when
A) an individual who is not affected by the externality can negotiate a settlement
between the parties imposing the externality and the parties that are harmed by the
externality.
B) transactions cost are low.
C) the market is perfectly competitive.
D) the courts can be used to determine the amount of compensation that must be made
to the damaged party.
E) the amount of compensation that must be made to the damaged party is small.
When an additional unit of output is produced, the extra cost to society is the
A) average total cost.
B) marginal social cost.
C) marginal private cost.
D) marginal external cost.
E) marginal damage.
Refer to Table 3.5.2. Professor Hyper publishes a new study, showing that coffee raises
the test performance of students. Students double their demand for coffee and the
quantity of coffee demanded at each price doubles. The new equilibrium price is
$________, and the new equilibrium quantity is ________ cups a day.
A) 1.20; 1,000
B) 1.30; 1,200
C) 1.50; 1,600
D) 1.40; 1,400
E) 2.20; 800
Refer to Figure 26.1.1. Which graph illustrates what happens when factor prices rise?
A) (a)
B) (b)
C) (c)
D) (d)
E) (a) and (b)
As Canada experiences increasing wealth and increasing expected future income,
A) there is a movement down along the consumption function.
B) the consumption function shifts steadily upward and autonomous consumption
increases.
C) the consumption function shifts steadily upward with no change in autonomous
consumption.
D) the consumption function shifts steadily upward and autonomous consumption
decreases.
E) there is a movement down along the saving function.
Everything else remaining the same, if Canadians expect future disposable income to
rise, then
A) Canada’s consumption function shifts downward.
B) Canada’s consumption function shifts upward.
C) a movement occurs up along Canada’s consumption function.
D) a movement occurs down along Canada’s consumption function.
E) Canada’s saving function shifts upward.
Use the table below to answer the following question.
Table 21.3.2
Data from Southton
Refer to Table 21.3.2. From the data in Table 21.3.2, what is Southton’s consumer price
index for the current year?
A) 112
B) 105.6
C) 100.5
D) 100
E) 94.7
The price of good A falls by 10 percent and quantity of good A demanded does not
change. We conclude that the demand for good A is
A) perfectly elastic.
B) inelastic.
C) perfectly inelastic.
D) elastic.
E) unit elastic.
A forecast that is based on all the relevant information available is
A) usually no better than a random guess given that the future bears many uncertainties.
B) usually accurate.
C) called a rational expectation.
D) useful only in the prediction of cost-push inflation.
E) useful only in the prediction of demand-pull inflation.
The slope of a straight line
A) is the same at every point.
B) increases as the variable on the x-axis increases if the slope is positive.
C) decreases as the variable on the x-axis increases if the slope is negative.
D) is the same at every point only if the line is horizontal.
E) depends on where you measure the slope.
On September 15, 2014, the OECD predicted that global growth would continue at a
moderate rate and that Canada’s economic growth will strengthen. If the OECD
forecasts turn out to be correct, and Canada is in a below full-employment equilibrium
in 2014 (but close to full employment), then in 2015 and 2016 the output gap will
________ and unemployment will ________.
A) increase; decrease
B) decrease or even reverse; increase
C) decrease or even reverse; decrease
D) increase; increase
E) decrease; not change
Refer to Figure 13.2.3. Assume this firm is a single-price monopoly. How many tickets
does this monopolist sell to maximize economic profit?
A) 20 tickets
B) 30 tickets
C) 50 tickets
D) 60 tickets
E) 100 tickets
Use the table below to answer the following questions.
Table 10.4.1
Refer to Table 10.4.1. The four-firm concentration ratio for taco stands is
A) 15 percent.
B) 100 percent.
C) 80 percent.
D) 33 percent.
E) 30 percent.
An open market operation
A) refers to the Bank of Canada’s sales and purchases of corporate stock.
B) can change bank deposits but cannot alter the quantity of money.
C) is the purchase or sale of government of Canada securities by the Bank of Canada
from or to a chartered bank or the public.
D) refers to loans made by the Bank of Canada to chartered banks.
E) refers to the purchase or sale of Canadian currency in exchange for foreign currency.
You are given the following information about the Canadian economy. Autonomous
consumption expenditure is $50 billion, investment is $200 billion, and government
expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are
$250 billion. Net taxes are assumed to be constant and not vary with income. Exports
are $500 billion and imports are $450 billion.
The equation of the AE curve in billions of dollars is ________. Equilibrium
expenditure is ________.
A) AE = 0.7 + 375Y; $1,250 billion
B) AE = 0.7Y + 300; $1,000 billion
C) AE = 0.7Y + 1,275; $4,250 billion
D) AE = 0.7Y + 375; $1,250 billion
E) AE = 0.7Y + 375; $536 billion
Refer to Fact 7.3.1. The quantity of Canadian exports to Mexico has ________, and the
Canadian government’s tariff revenue from trade with Mexico has ________.
A) not changed; not changed
B) decreased; increased
C) increased; increased
D) increased; decreased
E) increased; not changed
Lin’s fortune cookies are identical to the fortune cookies made by dozens of other firms,
and there is free entry in the fortune cookie market. Buyers and sellers are well
informed about prices. The price of a fortune cookie is determined by ________. The
marginal revenue of a fortune cookie equals ________.
A) market demand and market supply; price
B) the ingredients that Lin’s uses to produce his fortune cookies; average total cost
C) the number of cookies that Lin’s produces; average variable cost
D) the freshness of the fortune cookies; average fixed cost
E) market demand and market supply; the price elasticity of demand
If price falls below minimum average variable cost, the best a firm can do is
A) increase production and incur a loss equal to total variable cost.
B) increase production and incur a loss equal to total fixed cost.
C) stop production and incur a loss equal to total fixed cost.
D) stop production and incur a loss equal to total variable cost.
E) stay at the same production level and incur a loss equal to the difference between
total cost and total revenue.
The Brown’s Egg store in Lethbridge Alberta hires workers to paint eggs. The price of
an egg is $2.50. The value of marginal product of this store’s fifth worker is $25. The
marginal product of the fifth worker is
A) 62.5 eggs.
B) 25 eggs.
C) 2 eggs.
D) 10 eggs.
E) 0.1 eggs.
Utility is
A) the value of a good.
B) the additional satisfaction received from consuming another unit of a good.
C) the benefit or satisfaction from consuming goods and services.
D) the practical usefulness of a good.
E) equal to the price of a good.
Use the figure below to answer the following questions.
Figure 19.1.1
Refer to Figure 19.1.1. The poorest 20 percent of households receive what share of total
income?
A) 40 percent
B) 60 percent
C) 20 percent
D) 5 percent
E) 10 percent
The demand for labour is a derived demand because it is derived from
A) the demand for the output the labour produces.
B) the supply of labour.
C) union pressure.
D) natural law.
E) years of accumulated capital and technological advances.
If economic profit is equal to zero, then the entrepreneur is making
A) a normal profit.
B) zero profit as recorded by accountants.
C) negative profit as recorded by accountants.
D) zero taxable income.
E) an amount equal to the implicit rental rate.
The most anyone is willing to pay for another purse is $30. Currently the price of a
purse is $40, and the cost of producing another purse is $50. The marginal benefit from
a purse is
A) $40.
B) $50.
C) $10.
D) $20.
E) $30.
Use the figure below to answer the following questions.
Figure 11.3.2
Refer to Figure 11.3.2, which illustrates short-run average and marginal cost curves.
Which one of the following statements is false?
A) Average fixed cost decreases with output.
B) The vertical gap between curves B and C is equal to average variable cost.
C) Line B comes closer to line C as output increases because of a decrease in average
fixed cost.
D) Curve D is the marginal cost curve.
E) The vertical gap between curves B and C is equal to average fixed cost.
When the Bank of Canada sells government securities to a bank, how are the Bank of
Canada’s assets affected?
A) The bank’s reserves held at the Bank of Canada increase.
B) The bank’s reserves held at the Bank of Canada decrease.
C) Bank of Canada notes increase.
D) The amount of the Bank of Canada’s government securities increases.
E) The amount of the Bank of Canada’s government securities decreases.
Suppose that industry A consists of four firms who collectively control 96 percent of
total sales in the market. We can conclude that industry A is
A) perfectly competitive.
B) a duopoly.
C) monopolistically competitive.
D) an oligopoly.
E) a monopoly.