The y– axis intercept of the supply curve is 40 and the slope is 6. The equation of the
supply curve is
A) P = 3 + 40QS.
B) P = 40 + 6QS.
C) P = 40 – 6QS.
D) QS = 40 + 6P.
E) QS = 40 – 6P.
Since non-market exchanges are excluded from measures of GDP, the GDP measure
tends to
A) underestimate the total production of an economy.
B) overestimate the total production of an economy.
C) be of little significance in determining the total production of an economy.
D) be of little use to anyone but market economists.
E) place too much value on market transactions.
In a world characterized by scarcity
A) all goods are free.
B) opportunity cost is zero.
C) we are not limited by time.
D) individuals need not work to obtain goods.
E) people must make choices among alternatives.
From the following list, choose the item that would be included in a current measure of
GDP.
A) the purchase of a previously owned house that was built last year
B) a social security cheque for $500
C) the purchase of 10 litres of gasoline for your car
D) a $2,000 cheque from your Aunt Grace
E) income from the sale of your Canadian Snowfun stocks
Refer to Figure 27.2.1. When real GDP is equal to Ya, then aggregate planned
expenditure
A) exceeds real GDP, and real GDP increases.
B) is less than real GDP, and real GDP decreases.
C) exceeds real GDP, and real GDP decreases.
D) is equal to real GDP, and real GDP neither increases nor decreases.
E) is less than real GDP, and real GDP increases.
Refer to Table 15.2.4. The marketers of Budweiser Light beer and Miller Lite beer must
decide whether or not to offer new advertising campaigns promoting their products. The
payoffs in the table are the economic profit made by Bud and Miller. Which one of the
following observations is correct?
A) The equilibrium of the game is that both firms will conduct new advertising
campaigns.
B) The equilibrium of the game is that neither firm will conduct a new advertising
campaign.
C) The equilibrium solution has Bud conducting a new advertising campaign, but not
Miller.
D) The equilibrium solution has Miller conducting a new advertising campaign, but not
Bud.
E) There is no equilibrium to this gamethe industry will have alternating cycles of
advertising and no advertising.
Markets may not achieve an efficient allocation of resources when there are
A) public goods.
B) external benefits.
C) monopolies.
D) subsidies.
E) all of the above
Which one of the following statements is true?
A) The highest value of average product occurs where average product is greater than
marginal product.
B) When the average product curve is rising, marginal product is less than average
product.
C) When the average product curve is falling, marginal product is greater than average
product.
D) The maximum total product occurs at minimum marginal product.
E) The highest value of average product occurs where average product equals marginal
product.
The kitchen manager at an Italian restaurant is deciding what assignments he should
give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta
per hour and David can make 20 pizzas or 30 servings of pasta per hour. Which is the
manager’s best choice?
A) Fire David because he is not as productive as John. John will produce both pasta and
pizza.
B) David will make pizza because he has a comparative advantage in making pizza.
C) John and David will each spend half their time making pizza and half their time
making pasta.
D) John will make pizza because he has a comparative advantage in making pizza.
E) Increase David’s salary because with encouragement, he can increase his output.
Refer to Fact 20.1.1. Peter’s capital at the end of 2014 is
A) $7,000.
B) $9,600.
C) $4,400.
D) $7,600.
E) $4,000.
Use the table below to answer the following questions.
Table 15.2.4
Refer to Table 15.2.4 The marketers of Budweiser Light beer and Miller Lite beer must
decide whether or not to offer new advertising campaigns promoting their products. The
payoffs in the table are the economic profit made by Bud and Miller. Which one of the
following observations is correct?
A) This is not a game described as a prisoners’ dilemma.
B) If Bud offers a new advertising campaign and Miller does not, Bud will make a $200
profit.
C) Miller has a dominant strategy but Bud does not.
D) Both Bud and Miller would be better off if they could collude and both offer new
ads.
E) If Miller offers a new advertising campaign and Bud does not, Bud will make a $100
profit.
Consider the revenue and cost curves in Figure 13.3.3. What is the difference in
producer surplus between a single-price monopoly and a perfectly competitive market?
A) EADH
B) EABH
C) ABD
D) ACD
E) EABH – BCD
Use the figure below to answer the following questions.
Figure 17.3.2
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. The equilibrium in
an unregulated market is
A) 0 goats.
B) 40 goats.
C) 50 goats.
D) 55 goats.
E) 35 goats.
Use the figure below to answer the following questions.
Figure 1A.3.3
Figure 1A.3.3 illustrates two variables, x and y, which are
A) negatively related, with a decreasing slope as x increases.
B) negatively related, with an increasing slope as x increases.
C) positively related, with a decreasing slope as x increases.
D) positively related, with an increasing slope as x increases.
E) positively related, with slope first increasing then decreasing.
Everything else remaining the same, which one of the following would increase
equilibrium real GDP?
A) an increase in saving
B) an increase in exports
C) a decrease in investment
D) an increase in taxes
E) a decrease in exports
Which of the following is a Canadian service export?
A) A Canadian buys dinner while travelling in Switzerland.
B) A Swiss buys dinner while travelling in Canada.
C) A Canadian buys a clock made in Switzerland.
D) A Swiss buys a computer made in Canada.
E) A Canadian buys a Canadian computer in Switzerland.
When labour productivity decreases, the
A) demand for labour curve shifts leftward and the real wage rate falls.
B) supply of labour curve shifts rightward and the real wage rate fall.
C) supply of labour curve shifts leftward and the real wage rate rises.
D) demand for labour decreases and the supply of labour decreases, and the real wage
rate rises, falls, or remains unchanged.
E) demand for labour decreases and the supply of labour increases, and the real wage
rate falls.
For a single-price monopoly, marginal revenue is less than price because
A) the revenue gained from the last unit sold is offset by further gains in price on units
not sold at all.
B) total revenue always decreases as output increases.
C) the revenue gained from the last unit sold is offset by a revenue loss on the units that
previously had been sold at a higher price.
D) the price does not need to be lowered on all previous units sold.
E) demand is perfectly elastic.
At the best affordable point, which statement is true?
A) The slope of the indifference curve equals the slope of the budget line.
B) The marginal rate of substitution between two goods equals their absolute price.
C) The highest affordable indifference curve has the same intercept as the budget line.
D) Other points on the same indifference curve are affordable but not preferred.
E) Some income is not spent.
Use the figure below to answer the following questions.
Figure 19.3.1
Refer to Figure 19.3.1. For any given quantity of labour employed,
A) the elasticity of demand for high-skilled labourers is less than the elasticity of
demand for low-skilled labourers.
B) high-skilled labourers will receive a lower wage than low-skilled labourers.
C) high-skilled labourers will receive a greater wage than low-skilled labourers.
D) the vertical distance between the two demand curves is the compensation for the
cost of acquiring the skill.
E) the vertical distance between the two curves is the present value of human capital.
Which one of the following people is cyclically unemployed?
A) a Saskatchewan welder who lost her job when her company relocated to B. C. and is
currently looking for a job
B) a Nova Scotia fishery worker who is searching for a better job closer to home
C) a steel worker who is laid off but who expects to be called back soon
D) an office worker who has lost her job because of a general slowdown in economic
activity
E) a student who recently graduated and is looking for work
Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay
for one more slice of pizza.
A) market price
B) marginal cost
C) consumer surplus
D) marginal benefit
E) producer surplus
An import quota is a
A) tariff imposed on goods that are dumped in the country.
B) law that prevents ecologically damaging goods from being imported into a country.
C) market-imposed balancing factor that keeps prices of imports and exports in
equilibrium.
D) government-imposed restriction on the quantity of a specific good that can be
imported.
E) tax in an international market.
Refer to Table 3.5.3. A new store opens up on the edge of campus, Great Wild North
Sportswear, which has the capacity to do as much business as all the existing
businesses. The quantity of t-shirts supplied doubles at each price. This would be
represented as a
A) movement up along the demand curve.
B) rightward shift of the demand curve.
C) leftward shift of the demand curve.
D) rightward shift of the supply curve.
E) leftward shift of the supply curve.
Refer to Table 10.4.1. The four-firm concentration ratio for the pizza sellers is
A) 40 percent.
B) 100 percent.
C) 80 percent.
D) 33 percent.
E) 12.5 percent.
Consider an initial budget line labelled RS in Figure 9.3.3. If the budget line becomes
RT, the substitution effect is illustrated by the move from point
A) A to B.
B) A to C.
C) A to D.
D) B to D.
E) D to C.
Refer to Fact 27.5.1. What is equilibrium real GDP in this economy?
A) 36
B) 120
C) 130
D) 360
E) none of the above
Refer to Table 27.1.2. What is the value of the marginal propensity to save?
A) 0.27
B) 0.25
C) 0.67
D) 0.33
E) 1.33
Firm strategies for coping with the principal-agent problem are
A) ownership, incentive pay, and long-term contracts.
B) sole proprietorship, partnership, and the corporation.
C) economies of scale, scope, and team production.
D) technology, information, and the market.
E) ownership, scope, and the market.
Firms hire labour
A) to minimize the average cost of the employment of labour.
B) to exploit workers.
C) to maximize profit.
D) because capital is more expensive.
E) to minimize costs.