In Figure 2.2.1, when 4,000 bicycles are produced each month,
A) the marginal benefit from another bicycle is greater than the marginal cost of another
bicycle.
B) more bicycles must be produced to reach the efficient level of output.
C) fewer bicycles must be produced to reach the efficient level of output.
D) the economy is efficient at this level of production of bicycles.
E) both A and B.
Which of the following is a store of value?
A) a credit card
B) a cheque
C) a debit card
D) a fixed term deposit
E) fresh fruit and vegetables
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. When Canada
exports lumber to the rest of the world and the rest of the world exports wine to Canada,
________.
A) lumber producers in the rest of the world lose and wine producers in the rest of the
world gain
B) Canada’s lumber producers gain
C) Canada’s wine producers lose
D) all of the above
E) none of the above
Potential GDP is
A) the maximum amount of GDP that can be produced while avoiding shortages of
labour, capital, land, and entrepreneurship that would bring rising inflation.
B) the same as real GDP.
C) the same as nominal GDP.
D) equal to real GDP multiplied by the price level.
E) equal to nominal GDP multiplied by the price level.
The winners from a tariff on imports are
A) producers and government.
B) producers only.
C) consumers only.
D) consumers, producers, and government.
E) government only.
Use the table below to answer the following question.
Table 20.4.4
Refer to Table 20.4.4. The table provides data on the economy of Tropical Republic that
produces only bananas and coconuts.
Nominal GDP in 2013 is ________. Nominal GDP in 2014 is ________.
A) $7,500; $7,000
B) $7,472.50; $7,000
C) $7,000; $7,500
D) $7,472.50; $7,500
E) $1,500; $1,625
The equation of exchange is
A) MV = P.
B) MV = PY.
C) MP = VY.
D) PV = M.
E) Y = M.
Use the figure below to answer the following questions.
Figure 14.2.4
Refer to Figure 14.2.4. The figure represents a monopolistically competitive firm in
short-run equilibrium. What is the firm’s level of output?
A) Q1
B) Q2
C) Q3
D) Q4
E) zero
Use the table below to answer the following questions.
Table 8.2.2
Refer to Table 8.2.2. Henry is maximizing his utility by consuming 3 bags of popcorn
and 3 bottles of pop. What is the ratio of the price of popcorn to the price of pop?
A) 1/2
B) 1
C) 3/4
D) 4/3
E) 6/5
The essence of philosopher Robert Nozick’s proposal is that
A) fairness works on the basis of fair outcomes.
B) fairness must be based on fairness of rules.
C) involuntary exchange is fair.
D) all of the above
E) none of the above
The slope of the production possibilities frontier curve indicates
A) opportunity cost.
B) comparative advantage.
C) absolute advantage.
D) marginal benefit.
E) preferences.
Because consumers value product variety,
A) society must be more efficient with monopolistic competition than with perfect
competition.
B) the inefficiency of monopolistic competition is partially offset.
C) in the long run, monopolistic competition firms make economic profit.
D) monopolistically competitive industries are efficient.
E) no two goods of the same type will have equal prices.
Which of the following goods is best described as being sold in a monopolistically
competitive market?
A) batteries
B) wheat
C) fast food
D) postage stamps
E) the local newspaper
A ________ macroeconomist believes that business cycle fluctuations are the efficient
responses of a well-functioning market economy that is bombarded by shocks that arise
from the uneven pace of technological change. A ________ macroeconomist believes
that the short-run aggregate supply curve is horizontal at a fixed price level.
A) new classical; monetarist
B) classical; monetarist
C) Keynesian; new Keynesian
D) new classical; new Keynesian
E) monetarist; new classical
The quantity of real GDP demanded does not depend on decisions made by
A) foreigners.
B) households.
C) suppliers.
D) governments.
E) firms.
In April 2014, the money price of a litre of milk was $2.01 and the money price of a
litre of gasoline was $1.30. The real price of a litre of gasoline in terms of milk was
A) $0.65.
B) 0.65 litres of milk.
C) 2.61 litres of milk.
D) 1.54 litres of milk.
E) $0.71.
Given the data in Table 1A.4.2, holding income constant, the graph relating the price of
strawberries, measured on the y-axis and the purchases of strawberries, measured on the
x-axis
A) is a vertical line.
B) is a horizontal line.
C) is a positively sloped line.
D) is a negatively sloped line.
E) reaches a minimum.
Prime Pharmaceuticals has developed a new asthma inhaler, for which it has a patent.
An inhaler can be produced at a constant marginal cost of $2 per inhaler. The demand
curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are
shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new
inhaler. If prime Pharmaceuticals can perfectly price discriminate, producer surplus is
A) $16 million.
B) zero.
C) $32 million.
D) $64 million.
E) $24 million.
Refer to Figure 26.3.2. Consider statements (1) and (2) and select the correct answer.
(1) The economy of Mythlo is experiencing an above full-employment equilibrium.
(2) SAS will automatically shift rightward as the economy adjusts to long-run
equilibrium.
A) (1) is true; (2) is false.
B) (2) is true; (1) is false.
C) (1) and (2) are false.
D) (1) and (2) are true.
E) (1) is true; (2) is true only if the LAS curve shifts rightward at the same time.
Which of the following statements about depository institutions is false?
A) They create liquidity by borrowing long and lending short.
B) They keep reserves to meet cash withdrawals.
C) A credit union is an example of a depository institution.
D) They pool, and therefore reduce, risk.
E) They borrow at lower interest rates and lend at higher rates.
Incomes in China and India are a small fraction of incomes in Canada. But incomes in
China and India are growing at more than twice the rate of those in Canada. As a result,
the inequality in income between the people in China and India and people in Canada is
________ and the world Gini ratio is ________.
A) staying relatively constant; remaining constant
B) increasing in some years and decreasing in other years; remaining constant
C) decreasing; decreasing
D) increasing; increasing
E) decreasing; increasing
In 2011, the mode income received by 6.0 percent of households in Canada was
between
A) $18,500 and $21,999.
B) $15,000 and $19,999.
C) $30,000 and $34,999.
D) $16,000 and $22,500.
E) $18,000 and $24,999.
The principal-agent problem exists when
A) there is no command system in place.
B) firms operate as sole proprietorships.
C) agents do not act in the best interest of principals.
D) principals do not act in the best interest of agents.
E) the future value of money is more than its current value.
Rent seeking is best defined as
A) an attempt by landlords to get tenants.
B) the pursuit of wealth by capturing economic rent.
C) an attempt by individuals to avoid paying taxes.
D) owners of a monopoly selling the firm at the highest possible price.
E) a means of eliminating deadweight loss.
Refer to Figure 27.3.1. Autonomous expenditure equals
A) $100 billion.
B) $25 billion.
C) $50 billion.
D) $125 billion.
E) $200 billion.
Use the information below to answer the following question.
Fact 16.2.1 Global Solutions for Local Gridlock
Gridlock costs Toronto $6 billion a year, with average commutes of 80 minutes. By
2013, an additional 27 minutes will be added to the daily grind. Civic leaders are
looking at road tolls, a regional gas tax, and parking levies.
Refer to Figure 16.2.1. Toll roads, a regional gas tax, and parking levies ________
make Toronto streets less congested because ________.
A) will not; drivers will switch to using public transport only if TTC prices fall
B) will not; additional charges on Toronto’s motorists will not change driving habits
C) will; motorists will consider the external benefit from driving in Toronto
D) will; motorists will consider the external cost of driving in Toronto
E) will not; construction on Toronto’s streets always results in congestion
An income tax cut that provides a greater incentive to work than an alternative tax cut
will result in comparatively
A) higher long-run real GDP and a higher price level.
B) higher long-run real GDP and a lower price level.
C) the same level of long-run real GDP and price level.
D) the same level of long-run real GDP and a higher price level.
E) the same level of long-run real GDP and a lower price level.
Refer to Figure 26.3.3. Which one of the graphs illustrates a full-employment
equilibrium?
A) (a) only
B) (b) only
C) (c) only
D) (d) only
E) (c) and (d)
The labour force participation rate is
A) the percentage of the working-age population who are employed.
B) the percentage of the labour force who are unemployed or employed.
C) the percentage of the working-age population who are either unemployed or
employed.
D) the percentage of the labour force who are employed.
E) equal to the employment-to-population ratio plus the unemployment rate.
Consider a “prisoners’ dilemma” game consisting of two firms in collusion to maximize
profit. The game is repeated indefinitely and each player employs a tit-for-tat strategy.
The equilibrium when the two firms share the monopoly profit is called a
A) credible strategy equilibrium.
B) dominant player equilibrium.
C) duopoly equilibrium.
D) trigger strategy equilibrium.
E) cooperative equilibrium.
A shortage will exist if
A) the price is above the equilibrium price.
B) the price is below the equilibrium price.
C) there are not enough producers.
D) there are not enough consumers.
E) demand decreases.
A rise in the price of a fixed input shifts a firm’s
A) average variable cost curve upward.
B) average total cost curve upward.
C) average total cost curve downward.
D) marginal cost curve upward.
E) marginal cost curve downward.
The average variable cost curve will shift upward if
A) there is an increase in fixed cost.
B) there is a technological advance.
C) the price of the variable input decreases.
D) the price of the variable input increases.
E) the price of output increases.