For a single-price monopoly, the demand curve is
A) below the marginal revenue curve.
B) the same as the marginal revenue curve.
C) above the marginal revenue curve.
D) the same as the total revenue curve.
E) below the average total cost curve.
Use the figure below to answer the following questions.
Figure 14.2.2
Refer to Figure 14.2.2. To maximize economic profit, this firm in monopolistic
competition will charge a price of
A) $15 a unit.
B) $25 a unit.
C) $20 a unit.
D) $32 a unit.
E) $35 a unit.
Which one of the following statements is true?
A) All technologically efficient methods are also economically efficient.
B) All economically efficient methods are also technologically efficient.
C) Technological efficiency changes with changes in relative input prices.
D) Technologically efficient firms will be more likely to survive than economically
efficient firms.
E) Technological efficiency is more important than economical efficiency.
In Figure 31.1.1, with international trade Canada ________ million shirts per year.
A) imports 32
B) imports 48
C) exports 16
D) exports 32
E) imports 16
In 2012, a severe drought led to an increase in the price of corn. Farmer Lyle was not
affected by the drought. Comparing 2012 to the previous year in which there was no
drought, Farmer Lyle’s
A) consumer surplus increased.
B) producer surplus increased.
C) producer surplus increased and his consumer surplus increased.
D) consumer surplus decreased and his producer surplus increased.
E) supply of corn became perfectly elastic.
Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of
a perfectly competitive firm. The marginal cost of increasing production from 4 units to
5 units is
A) $16.
B) $128.
C) $100.
D) $116.
E) $30.
The four parts of the business cycle occur in the following order:
A) recession, trough, peak, expansion.
B) expansion, trough, peak, recession.
C) recession, trough, expansion, peak.
D) expansion, trough, recession, peak.
E) trough, peak, expansion, recession.
Refer to Figure 19.3.5. This figure shows the labour supply curves and the value of
marginal product curves for high-skilled and low-skilled workers. The equilibrium
wage rate for high-skilled workers is
A) $5 an hour.
B) $4 an hour.
C) $6 an hour.
D) $8 an hour.
E) $7 an hour.
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 a union and the
monopsonist in Figure 18.3.1 are equally strong, the outcome will be an hourly wage
A) of $7.
B) between $5 and $6.
C) between $5 and $7.
D) between $6 and $7.
E) of $6
The law of diminishing marginal returns states:
A) As the size of a plant increases, marginal product eventually decreases.
B) As the size of a firm’s plant increases, average cost eventually decreases.
C) As a firm uses more of a variable factor of production, with a given quantity of the
fixed factor of production, the marginal product of the variable factor eventually
diminishes.
D) As a firm uses more of a variable factor of production, its average cost eventually
decreases.
E) As a firm uses more of a variable factor or production, total product eventually
decreases.
As more of a good is consumed, its
A) marginal utility increases.
B) marginal utility decreases.
C) marginal utility remains unchanged.
D) total utility decreases.
E) total utility increases at an increasing rate.
Which of the following shifts the supply curve for good X leftward?
A) a situation in which the quantity demanded of X exceeds the quantity supplied of X
B) an increase in the cost of the machinery used to produce X
C) a technological advance in the production of X
D) a decrease in the wages of workers employed to produce X
E) a situation in which the quantity supplied of X exceeds the quantity demanded of X
Use the figure below to answer the following question.
Figure 1A.4.2
Given the data in the following table, which one of the graphs in Figure 1A.4.2
correctly represents the relationship among x, y, and z?
A) (a)
B) (b)
C) (c)
D) (d)
E) (a) and (d)
In Figure 31.1.1, with international trade ________ million shirts per year are produced
in Canada.
A) 48
B) 32
C) 20
D) 56
E) 16
When the Bank of Canada lowers the overnight loans rate, there is a ________ shift of
the ________ curve.
A) rightward; AD
B) leftward; AD
C) rightward; SAS
D) leftward; SAS
E) rightward; LAS
Competitors who make themselves identical to appeal to the maximum number of
voters illustrate the
A) principle of maximum differentiation.
B) principle of minimum differentiation.
C) principle of rational ignorance.
D) principle of nonrivalry.
E) principle of excludability.
All of the following statements are true except
A) China’s exchange rate policy increases exports in the long run.
B) China’s exchange rate policy is mainly an attempt to control inflation.
C) China’s exchange rate policy results in a yuan that has a lower foreign exchange rate
against the U.S. dollar than it would otherwise have.
D) China’s exchange rate policy does not impact the real exchange rate in the long run.
E) All of the above are true.
Suppose the Bank of Canada follows a fixed exchange rate of $1 U.S. per Canadian
dollar. If the demand for Canadian dollars temporarily increases, to maintain the target
exchange rate, the Bank can
A) sell Canadian dollars.
B) buy Canadian dollars.
C) violate interest rate parity.
D) violate purchasing power parity.
E) enforce interest rate parity.
If energy (E) is the only input used to produce output (Q) , what is the formula for
marginal product of energy?
A) Q E∗
B) Q/E
C) ΔQ/ΔE
D) ΔE/ΔQ
E) E/Q
Refer to Table 24.5.1. The spreadsheet provides information about the demand for
money in Minland.
Column A is the nominal interest rate, r. Columns B and C show the quantity of money
demanded at two different levels of real GDP: Y0is $10 billion and Y1 is $20 billion.
The quantity of money is $3 billion. Real GDP is $20 billion.
If the interest rate is greater than 4 percent a year,
A) people buy bonds, the price of a bond rises, and the interest rate rises.
B) people buy bonds, the price of a bond rises, and the interest rate falls.
C) people sell bonds, the price of a bond falls, and the interest rate rises.
D) people sell bonds, the price of a bond falls, and the interest rate falls.
E) the demand for money decreases.
Use the figure below to answer the following questions.
Figure 13.2.2
For the single-price monopoly shown in Figure 13.2.2, when profit is maximized,
quantity is
A) 3 and price is $3.
B) 3 and price is $6.
C) 4 and price is $4.
D) 4 and price is $5.
E) 5 and price is $4.
Sally has to decide whether to study for her economics test or her accounting test. If she
chooses to study for accounting, her opportunity cost of studying accounting is
A) studying economics.
B) less than the value of studying economics.
C) not comparable to the value of studying economics.
D) equal to the value of studying economics.
E) the future lost wages that will occur if she fails her accounting exam.
Refer to the table below to answer the following questions.
Table 15.2.6
Refer to Table 15.2.6. Firms A and B can conduct research and development (R&D) or
not conduct it. R&D is costly but can increase the quality of the product and increase
sales. The payoff matrix is the economic profits of the two firms and is given above,
where the numbers are millions of dollars. A’s best strategy is to
A) conduct R&D regardless of what B does.
B) not conduct R&D regardless of what B does.
C) conduct R&D only if B conducts R&D.
D) conduct R&D only if B does not conduct R&D.
E) not conduct R&D only if B does not conduct R&D.
A tariff ________ the domestic price of the good and an import quota ________ the
domestic price of the good.
A) lowers; lowers
B) lowers; raises
C) raises; lowers
D) raises; raises
E) does not change; does not change
A good that is rival and nonexcludable is a
A) private good.
B) public good.
C) government good.
D) regulated good.
E) common resource.
A four-firm concentration ratio of less than 60 percent indicates
A) a monopoly.
B) a market that is dominated by a few firms.
C) a competitive market.
D) an oligopoly.
E) an absence of competition.
The working-age population can be divided into two groups:
A) those who are employed and those who are unemployed.
B) those in the labour force and discouraged workers.
C) those who work full time and those who work part time.
D) those in the labour force and those not in the labour force.
E) those who are over the age of 15 and those who are under the age of 15.
Which of the following is an asset of the Bank of Canada?
A) loans to depository institutions
B) Bank of Canada notes
C) depository institution deposits
D) deposits of private Canadian citizens
E) loans to private Canadian citizens
Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15
minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry specialize
and trade eggs and sandwiches with each other,
A) Tom benefits but Jerry does not.
B) Jerry benefits but Tom does not.
C) neither Tom nor Jerry benefit.
D) either Tom or Jerry benefit but we don’t have enough information to know which
one benefits.
E) both of them benefit.
In Table 17.2.1, which one of the proposals will have the least support?
A) Current income distribution
B) Proposal A
C) Proposal B
D) Proposal C
E) Proposal A or C
In an open market operation aimed at increasing expenditure, the Bank of Canada
A) sells government bonds, decreasing bank reserves, decreasing lending, decreasing
the overnight rate.
B) sells government bonds, decreasing bank reserves, decreasing lending, increasing the
overnight rate.
C) sells government bonds, decreasing bank reserves, increasing lending, increasing the
overnight rate.
D) buys government bonds, increasing bank reserves, increasing lending, decreasing the
overnight rate.
E) buys government bonds, increasing bank reserves, increasing lending, increasing the
overnight rate.
Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and
marginal social benefit curve for raising goats on a common pasture. A quota that
results in the common resource being used efficiently is set at
A) 0 goats.
B) 35 goats.
C) 50 goats.
D) 55 goats.
E) 40 goats.
The creation of a monopoly results in gains to
A) producers at no expense to consumers.
B) consumers at no expense to producers.
C) producers at the expense of consumers.
D) consumers at the expense of producers.
E) producers and consumers at the expense of the government.
Choose the statement below that is incorrect.
A) The Competition Act distinguishes between practices that are criminal and practices
that are noncriminal.
B) The Director of the Competition Bureau sends alleged violations of a noncriminal
nature to Parliament for examination.
C) The Competition Act of 1986 established a Competition Bureau.
D) The Competition Act of 1986 established a Competition Tribunal.
E) Canada’s anti-combine law dates from 1889.
Between 1972 and 2014, Canada’s inflation rate as measured by the CPI
A) rose in some years and fell in some years.
B) consistently rose every year.
C) consistently fell every year.
D) was always between 1 and 3 percent a year.
E) was always positive.