Which one of the following people would be counted as unemployed in Canada?
A) a part-time worker who repeatedly expresses a desire to become a full-time worker
B) a person who has been seeking a job for the last six months, but recently gave up
looking because he was discouraged by his job prospects
C) a person who will be starting a new job in 6 months
D) a person who expects to be laid off by the end of the month before next month’s
survey can be completed
E) a person who has been laid off for 10 weeks and is not looking for a job because he
is waiting to be called back to his old job
Which of the following is not relevant when calculating the budget line?
A) the price of good X
B) income
C) the price of good Y
D) preferences
E) the relative price of good X in terms of good Y
Use the figure below to answer the following questions.
Figure 13.3.1
Refer to Figure 13.3.1. If this market were perfectly competitive, the output level would
exceed the single-price monopoly output level by
A) 20 units.
B) 40 units.
C) 60 units.
D) 30 units.
E) zero. The perfectly competitive firm and the single-price monopoly produce the
same quantity because marginal cost is constant.
Refer to Table 25.4.1. The country Mengia came into existence at the beginning of year
1. Given the information, in year 4 Mengia is a
A) net lender and a creditor nation.
B) net lender and a debtor nation.
C) net borrower and a creditor nation.
D) net borrower and a debtor nation.
E) net lender and neither a creditor nor a debtor nation.
The demand for a good is perfectly elastic when the price elasticity of demand is
A) equal to infinity.
B) between infinity and 1.
C) equal to 1.
D) between 1 and zero.
E) equal to zero.
In a recession, typically
A) unemployment rises.
B) the employment-to-population ratio decreases.
C) the employment-to-population rate rises.
D) the labour force participation rate rises.
E) Both A and B are correct.
Which of the following would not be included in GDP for 2014?
A) a car produced in 2014 and held in inventory until 2015
B) a car produced in 2014 and sold in 2015
C) the value of all cars produced in 2015
D) a car produced in January of 2014 and sold in November of 2015
E) a car produced in 2013 and sold in 2014
Use the table below to answer the following questions.
Table 6.5.1
The Market for a Prohibited Good
Refer to Table 6.5.1. Which one of the following costs of breaking the law imposed on
the buyers of the good would reduce the quantity to zero?
A) $1
B) $2
C) $4
D) $6
E) $8
Consider Fact 18.5.1. If the rate of interest is 10 percent, how many ovens will the
Burning Belly Taco Stand buy?
A) zero
B) 1
C) 2
D) 3
E) insufficient information to answer
Refer to Figure 1A.2.1. When y increases from 5 to 6, x
A) increases from 5 to 6.
B) increases from 7 to 8.
C) increases from 7 to 9.
D) decreases from 9 to 7.
E) increases from 7 to 7 1/2.
If the price of a good is not affected by a tax, then
A) supply is perfectly elastic.
B) demand is perfectly elastic.
C) the elasticity of supply is greater than elasticity of demand.
D) demand is unit elastic.
E) supply is unit elastic.
Lotteries allocate resources to
A) those who work for the government.
B) those who come up lucky in a gaming system.
C) those who work for private firms.
D) people who are employed by gaming corporations.
E) those who are in command.
In a market that moves from a situation of no trade to a situation where a good is
exported, the price of the good ________ and the quantity produced by the domestic
industry ________.
A) rises; increases
B) falls; decreases
C) does not change; increases
D) does not change; decreases
E) rises; does not change
Refer to Figure 6.3.2. The seller’s share of the tax is
A) zero.
B) $0.50.
C) $1.00.
D) $1.50.
E) $2.00.
If revenues exceed outlays, the government’s budget balance is ________, and the
government has a budget ________.
A) negative; deficit
B) positive; surplus
C) positive; deficit
D) negative; surplus
E) zero; deficit
Which one of the following is a reason for the negative slope of the aggregate demand
curve?
A) the real wage effect
B) the substitution effect
C) the expected inflation effect
D) the nominal balance effect
E) the income effect
If the economy’s capital decreases over time,
A) net investment is positive.
B) depreciation is less than zero.
C) depreciation exceeds gross investment.
D) gross investment equals net investment.
E) gross investment is zero.
All of the following statements are true except
A) consumers allocate their budgets to get the most value possible.
B) we derive a consumer’s demand curve by finding how the best budget allocation
changes as the price of a good changes.
C) firms get the most value out of their resources at every point along a consumer’s
demand curve.
D) a competitive equilibrium achieves an efficient outcome.
E) when firms in perfect competition are away from the long-run equilibrium, the
market is still efficient.
Refer to Table 25.4.1. If Mengia’s official settlement balance was in deficit every year,
for which year or years can you say for sure there was a current account surplus?
A) year 1 only
B) year 2 only
C) years 2 and 3
D) years 1 and 2
E) years 3 and 4
Which one of the following is not an example of investment in the expenditure
approach to measuring GDP? General Motors
A) buys a new auto stamping machine.
B) adds 500 new cars to inventories.
C) buys shares in another company.
D) builds another assembly plant.
E) replaces some worn-out stamping machines.
Southton has investment of $100, private saving of $90, net taxes of $25, government
expenditure of $30, exports of $25 and imports of $10. What is national saving?
A) $85
B) $90
C) $95
D) $100
E) $105
Suppose that people decide to hold more money as cash. Which statement best
illustrates the impact of this action on the money multiplier? The money multiplier
A) decreases because of the decrease in the currency drain ratio.
B) increases because of the decrease in the currency drain ratio.
C) increases because of a decrease in deposits.
D) increases because of the increase in the currency drain ratio.
E) decreases because of the increase in the currency drain ratio.
Use the figure below to answer the following questions.
Figure 1A.4.5
Consider the following information on cola sales by number of cases for a typical
university residence floor:
Temp. Price (dollars per case)
(C) 10.00 12.50 15.00 17.50
15 50 40 30 20
20 60 50 40 30
25 70 60 50 40
30 80 70 60 50
35 90 80 70 60
Refer to Figure 1A.4.5. Which line shows the relationship of cola sales and its price
when the temperature is 30C?
A) A
B) B
C) C
D) D
E) E
If a government imposes a quota on imports of a popular doll, the price of the doll in
the country ________ and the quantity purchased in the country ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) rises; does not change
In poorer countries, free trade ________ the demand for labour in these countries and
________ the wages paid in these countries.
A) decreases; lowers
B) decreases; raises
C) increases; lowers
D) increases; raises
E) increases the supply and decreases; lowers
Refer to Figure 27.2.2. When real GDP is $100 billion,
A) real GDP is less than aggregate planned expenditure, and firms increase production.
B) aggregate planned expenditure is greater than real GDP, and firms decrease
production.
C) real GDP is greater than aggregate planned expenditure, and firms decrease
production.
D) aggregate planned expenditure equals real GDP, and the economy is in equilibrium.
E) aggregate planned expenditure is less than real GDP, and firms increase production.
Suppose that the economy is at full employment when government expenditure
increases by $10 billion. In the long run
A) the price level rises with no change in real GDP.
B) real GDP increases and the price level remains constant.
C) neither real GDP nor the price level change.
D) the price level falls with no change in real GDP.
E) real GDP increases by an unknown amount.
Use the table below to answer the following question.
Table 23.3.1
Data from Northland
Refer to Table 23.3.1. Table 23.3.1 shows the market for loanable funds in Northland.
The government budget is balanced. If the government moves from a balanced budget
to a surplus of $20 billion, the new equilibrium has a real interest rate of ________
percent and quantity of loanable funds traded equal to ________.
A) 6.5; $110 billion
B) 6.5; $90 billion
C) 5.5; $90 billion
D) 5.5; $110 billion
E) 6; $120 billion
Refer to Figure 22.3.2. The equilibrium quantity of labour is
A) 100 billion hours.
B) 150 billion hours.
C) 200 billion hours.
D) 50 billion hours.
E) 250 billion hours.
A Lorenz curve illustrates the distribution of income by graphing the
A) cumulative percentage of income received and the cumulative percentage of
households.
B) chance of a family earning a specific income.
C) wealth earned by a cumulative percentage of households.
D) cumulative frequency of specific incomes.
E) percentage change in income for a percentage change in population.
An individual transferable quota is a production limit that
A) has a price equal to marginal cost.
B) is assigned to every producer in the industry at a predetermined price.
C) is assigned to an individual who must transfer the quota to anyone the government
assigns.
D) is assigned to an individual who is free to transfer the quota to someone else.
E) has a price equal to marginal benefit.
When a scarce resource is allocated to someone who is the winner, the method of
resource allocation is
A) majority rule.
B) a contest.
C) first-come, first-served.
D) force.
E) personal characteristics.
Which of the following quotes best illustrates the idea of marginal product?
A) “If I have 10 workers on my assembly line, I can produce 13 tables a day.”
B) “If I add an 11th worker, I can produce 1 extra table a day.”
C) “Each worker produces 2 tables a day.”
D) “I find if I add an extra shift at night, table production only rises by 80 percent
because I need more maintenance time on the assembly line.”
E) “If I double workers and double the assembly line, I can make 120 percent more
tables.”
Minimum differentiation among the political parties suggests that
A) the parties will have few ideas in common on their platforms.
B) the parties will offer few ideas on minimizing the size and scope of government.
C) the platforms of the parties will tend to become similar as they try to appeal to a
majority of voters.
D) the platforms of the parties will tend to become dissimilar as they try to appeal to a
loyal majority of voters.
E) the platforms of the parties will tend to have few, if any, new ideas.