If the price level in Canada is 120, the price level in South Africa is 140, and the
exchange rate is 7 South African rands per dollar, then the real exchange rate is
A) 8.2.
B) 7.
C) 6.
D) 8.4.
E) 9.8.
When the 7th worker is hired, output increases from 100 units per week to 110 units per
week. When the 8th worker is hired, output increases from 110 units to 118 units. This
is an example of
A) diminishing marginal returns.
B) diminishing marginal cost.
C) decreasing returns to scale.
D) labour-intensive production.
E) increasing returns to scale.
When the price of a firm’s output increases,
A) the supply of labour increases.
B) the firm hires less labour.
C) the marginal product of labour increases.
D) the firm’s demand for labour curve shifts leftward.
E) the value of marginal product of labour increases.
The demand for a good is price elastic if
A) a rise in price results in an increase in total revenue.
B) a fall in price results in a decrease in total revenue.
C) a rise in price results in a decrease in total revenue.
D) the good is a necessity.
E) the demand for the good is very insensitive to changes in price.
Technological change
A) brings only temporary gains to producers.
B) brings only temporary gains to consumers.
C) brings permanent gains to producers.
D) decreases the number of firms in an industry.
E) decreases the number of consumers in a market.
A market in which the Herfindahl-Hirschman Index (HHI) lies between 1,000 and
1,800 is regarded as being
A) a monopoly.
B) an oligopoly.
C) a perfectly competitive market.
D) a moderately competitive market.
E) a potential matter of concern for regulators.
Use the table below to answer the following question.
Table 4.1.2
Refer to Table 4.1.2. The table shows two points on the demand curve for volleyballs.
What is the price elasticity of demand between these two points?
A) 2.5
B) 2.0
C) 0.5
D) 0.4
E) 5.0
A price elasticity of demand of 2 means that a 10 percent increase in price will result in
a
A) 2 percent decrease in quantity demanded.
B) 20 percent decrease in quantity demanded.
C) 5 percent decrease in quantity demanded.
D) 2 percent increase in quantity demanded.
E) 20 percent increase in quantity demanded.
Which of the following is an example of a positive statement?
A) Canada should cut back on its use of carbon-based fuels such as coal and oil.
B) Increasing the minimum wage results in more unemployment.
C) Every Canadian should have equal access to healthcare.
D) The Bank of Canada ought to cut the interest rate.
E) Canada should have lower tax rates for wealthier Canadians.
Use the figure below to answer the following questions.
Figure 28.2.2
Refer to Figure 28.2.2. The economy is in long-run equilibrium. If the short-run
aggregate supply curve shifts leftward from SAS0 to SAS1, ceteris paribus, then people
expect
A) a 10 percent inflation.
B) the price level to rise to 110.
C) the real wage rate to fall by 10 percent.
D) a real GDP decrease of $50 billion.
E) a 15 percent inflation.
Given the data in Table 1A.4.2, suppose family income decreases from $400 to $300
per week. Then the graph relating the price of strawberries, measured on the y-axis and
the number of boxes of strawberries purchased, measured on the x-axis will
A) become negatively sloped.
B) become positively sloped.
C) shift rightward.
D) shift leftward.
E) no longer exist.
If Wolfgang transfers $1,000 out of his chequable deposit account and places it in his
non-chequable deposit account,
A) M1 and M2 fall.
B) M1 falls and M2 rises.
C) M1 falls and M3 rises.
D) M1 falls and M2 remains the same.
E) M1 rises and M2 remains the same.
Refer to Fact 20.1.1. Peter’s net investment in 2014 is
A) $2,000.
B) $3,800.
C) $1,800.
D) $7,800.
E) $1,500.
A profit-maximizing firm will continue to hire labour until the
A) wage rate equals the last worker’s marginal product.
B) last worker’s value of marginal product is maximized.
C) last worker’s value of marginal product is negative.
D) wage rate equals the last worker’s value of marginal product.
E) last worker’s value of marginal product equals zero.
Everything else remaining the same, the short-run aggregate supply curve shifts
rightward if
A) the money wage rate increases.
B) aggregate demand increases.
C) the full-employment quantity of labour increases.
D) factor prices increase.
E) the quantity of capital decreases.
In 2011, the poorest 20 percent of households received what percentage of the nation’s
after-tax income?
A) 10.6 percent
B) 4.8 percent
C) 24.1 percent
D) 16.3 percent
E) 17.4 percent
According to John Rawls’ modified utilitarianism, income should be redistributed until
A) incomes are equal.
B) opportunities are equal.
C) the poorest person is as well off as possible.
D) the poorest person is as well off as possible, after incorporating the costs of income
transfers.
E) the big tradeoff is eliminated.
Use the table below to answer the following question.
Table 12.4.1
Refer to Table 12.4.1. The top table shows the market demand schedule for paper. The
market is perfectly competitive and there are 1,000 firms that produce paper. Each firm
has the costs shown in the bottom table when it uses its least-cost plant. The market
price in the long run is ________ a box and the equilibrium quantity produced in the
long run is ________ boxes a week.
A) $11.60; 250,000
B) $7.00; a little less than 400,000
C) $10.00; 300,000
D) $6.40; a little more than 400,000
E) $8.40; 350,000
Use the table below to answer the following questions.
Table 21.2.1
This table shows the answers given by interviewees to the Labour Force Survey.
In Table 21.2.1, which person is frictionally unemployed?
A) A
B) B
C) C
D) E
E) none of them
In Table 19.4.1, which tax plan is progressive?
A) Plan A
B) Plan B
C) Plan C
D) Plan D
E) impossible to calculate without additional information
Two monetary policy instruments that the Bank of Canada can use are
A) the federal government budget balance and the real interest rate.
B) the quantity of Canadian dollars held in Canadian banks and the quantity fo
Canadian dollars held by foreign central banks.
C) the monetary base and the short-term interest rate.
D) the foreign exchange rate and the government budget balance.
E) the current account balance and the capital and financial account balance.
In one year, Brazil exported more than 1.8 billion kilograms of coffee to the rest of the
world. We can conclude that
A) Brazil’s coffee producers lose from this trade.
B) coffee consumers in the rest of the world lose from this trade.
C) Brazil’s coffee consumers lose from this trade.
D) coffee producers in the rest of the world gain from this trade.
E) the deadweight loss in Brazil’s coffee market is large and growing.
If firms in a perfectly competitive market are incurring an economic loss, some firms
will exit. This exit shifts the market
A) demand curve leftward, and the market price falls.
B) demand curve rightward, and the market price rises.
C) supply curve leftward, and the market price rises.
D) supply curve rightward, and the market price falls.
E) supply curve leftward and the market demand curve rightward.
Refer to Table 27.1.2. Saving equals $100 when disposable income is
A) $475.
B) $550.
C) $525.
D) $575.
E) $625.
Adam earns $25,000 a year and Bob earns $45,000 a year, and they both have the same
marginal benefit curve. According to the utilitarian view, if a dollar is transferred from
Bob to Adam, then
A) the change in Adam’s marginal benefit plus the change in Bob’s marginal benefit
equals zero.
B) Adam’s marginal benefit decreases by more than bob’s marginal benefit increases.
C) Adam’s marginal benefit increases by more than Bob’s marginal benefit decreases.
D) the change in Adam’s marginal benefit plus the change in Bob’s marginal benefit is
negative.
E) Bob’s marginal benefit increases because he is being kind to Adam.
Public choice theory assumes those involved in the political process are motivated by
A) self-interest.
B) the desire to achieve efficiency.
C) dishonesty.
D) public spirit.
E) the desire for maximum profit.
Canada produces both lumber and wine. Canada exports lumber and imports wine. The
rest of the world imports Canadian lumber and exports wine to Canada. Canada has a
comparative advantage in producing ________. The rest of the world has a comparative
advantage in producing ________.
A) lumber; wine
B) wine; lumber
C) wine; wine
D) lumber; lumber
E) a good other than lumber or wine; wine
The demand for a factor of production is
A) a determined demand.
B) a derived demand.
C) a kinked demand.
D) an insatiable demand.
E) a desperate demand.
Which of the following ideas describes the concept of “utilitarianism”?
I. Utilitarianism was introduced in the 1930s.
II. Utilitarians believed that a society should strive to make as many people as happy as
possible.
III. Utilitarians claimed that taking money from rich people and giving it to poorer
people would not make an economy better off.
A) I only
B) II only
C) I and III
D) II and III
E) I, II, and III
Money is
A) equivalent to barter.
B) currency plus credit cards plus debit cards.
C) the same as gold.
D) a means of payment.
E) currency plus coins.
The settlement balances rate is the
A) proportion of outstanding loans from chartered banks that are resolved.
B) interest rate that the Bank of Canada charges the big banks on loans.
C) interest rate paid to chartered banks on their reserves held at the Bank of Canada.
D) ratio of the value securities sold by the Bank of Canada to securities outstanding.
E) proportion of overnight inter-bank loans that are resolved.
Refer to Figure 29.3.1, which shows the outlays and revenues for the government of
Pianoland. If real GDP equals $550 billion, the budget is
A) in balance.
B) a surplus of $60 billion.
C) a surplus of $40 billion.
D) a deficit of $60 billion.
E) a deficit of $40 billion.
When would the exchange rate fall the most?
A) The supply of and demand for dollars both increase.
B) The supply of dollars increases, and the demand for dollars decreases.
C) The supply of dollars decreases, and the demand for dollars increases.
D) The supply of and demand for dollars both decrease.
E) The Bank of Canada intervenes.