The outcome from a voucher scheme is efficient when the government makes the value
of the voucher equal to
A) marginal external cost.
B) marginal external benefit.
C) private external cost.
D) private external benefit.
E) marginal social cost.
Consider the cartel of Trick and Gear. The game is repeated indefinitely and each firm
employs a tit-for-tat strategy. The equilibrium is
A) both firms cheat on the agreement.
B) both firms comply with the agreement.
C) Trick cheats and Gear complies with the agreement.
D) Gear cheats and Trick complies with the agreement.
E) one of the firms exits the market.
Which one of the following would not be considered a depository institution?
A) The Bank of Canada.
B) a credit union
C) a caisse populaire
D) a trust and mortgage loan company
E) The Bank of Montreal
In a market with an effective production quota,
A) marginal social benefit exceeds marginal social cost.
B) marginal social benefit equals marginal social cost.
C) marginal social cost exceeds marginal social benefit.
D) marginal social cost is greater than the equilibrium price.
E) marginal social benefit is less than the equilibrium price.
When the Bank of Canada lowers the overnight loans rate, the Canadian interest rate
differential ________ and the Canadian dollar ________ on the foreign exchange
market.
A) rises; appreciates
B) rises; depreciates
C) falls; appreciates
D) falls; depreciates
E) falls; changes to equal the value of the U.S. dollar
Refer to Table 6.1.1, which gives the demand schedule and the supply schedule for the
apartment market in Anytown, Alberta. If a rent ceiling of $600 is imposed in the
apartment market, then
A) there is a shortage of 80 apartments.
B) there is a surplus of 80 apartments.
C) the supply of apartments will increase.
D) the supply of apartments will decrease.
E) the quantity of apartments supplied is 60 units.
Which one of the following is not money?
A) a chequable deposit
B) Canadian currency
C) a credit card
D) a non-chequable deposit
E) a fixed term deposit
Refer to Table 11.3.1, which gives Tania’s total cost schedule. When output increases
from 4 to 9 teapots, the marginal cost of one of the 5 teapots is
A) $4.25.
B) $4.
C) $25.
D) $6.25.
E) $5.
Use the information below to answer the following question.
Figure 5.2.3
Consider the demand and supply curves in Figure 5.2.3. If the market is at the
competitive equilibrium, which area in the diagram indicates the cost of producing the
quantity sold?
A) ABC
B) AEC
C) EBC
D) 0BCD
E) 0ECD
Choose the statement that is incorrect.
A) An economy experiences deflation when it has a persistently falling price level.
B) During a period of deflation, the inflation rate is negative.
C) A one-time fall in the price level is not deflation.
D) The price level falls if aggregate supply increases at a persistently slower rate than
aggregate demand.
E) Deflation can end if the central bank ensures that the quantity of money grows at the
target inflation rate plus the growth rate of potential GDP minus the growth rate of the
velocity of circulation.
An increase in supply is shown by
A) a movement down along the supply curve.
B) a movement up along the supply curve.
C) a rightward shift of the supply curve.
D) a leftward shift of the supply curve.
E) an initial movement up and then down along the same supply curve.
Which of the following does Statistics Canada use to provide measures of economic
inequality?
A) market income only
B) market income and after-tax income only
C) after-tax income only
D) total market and after-tax income only
E) market income, total income, and after-tax income
An oil painting has an opportunity cost of $1,000. The painting was purchased for
$1,500. How much consumer surplus did the buyer obtain?
A) $1,500
B) $1,000
C) $500
D) zero
E) cannot be determined from the information given
If an increase in the supply of good A decreases the demand for good B, then
A) the demands for A and B are independent.
B) the elasticity of supply for good A is greater than 1.
C) A and B are complements.
D) A and B are substitutes.
E) the demand for A is price elastic.
When producing at a point of production efficiency,
A) our choice of goods to produce can be either on or inside the production possibilities
frontier.
B) we can satisfy all our wants.
C) the opportunity cost of producing goods other than those measured on the axes of the
production possibilities frontier is zero.
D) we face a tradeoff and incur an opportunity cost.
E) resources are either unused or misallocated.
A tariff is imposed on a good. This ________ producer surplus and ________ total
surplus in importing country.
A) increases; does not change
B) increases; increases
C) decreases; increases
D) decreases; decreases
E) increases; decreases
If a 10 percent increase in price results in a 9 percent increase in quantity supplied,
A) the good is a normal good.
B) the good is an inferior good.
C) supply is unit elastic.
D) supply is inelastic.
E) supply is elastic.
The income elasticity of demand is largest for
A) food.
B) clothing.
C) shelter.
D) used cars.
E) luxury cars.
Aggregate demand is the relationship between
A) real aggregate expenditure and real GDP.
B) real income and real GDP.
C) real prices and real GDP.
D) the price level and the quantity of real GDP demanded.
E) the price level and nominal GDP.
Who of the following would be counted as unemployed in Canada?
A) Caitlin, who is 14 years old and looking for a babysitting job.
B) James, who is a full-time student looking for a part-time job.
C) Youngmin, who is a part-time hamburger flipper looking for a full-time job.
D) Emmanuel, who lost his job at the steel plant when an automated assembly line was
introduced six months ago, and has been job searching every day.
E) Vik, who has been staying at home watching reruns of “Hockey Night in Canada”
and not searching since he was laid off at the flour mill.
An illegal market in which the equilibrium price exceeds the price ceiling is
A) a rental market.
B) a capital market.
C) a black market.
D) an efficient market.
E) a housing market.
Use the table below to answer the following questions.
Table 20.2.2
Refer to Table 20.2.2. Gross domestic product equals
A) $3,050.
B) $3,150.
C) $3,400.
D) $5,600.
E) $5,050.
An increase in the quantity of money leads to
A) an increase in short-run aggregate supply.
B) a decrease in net exports.
C) a decrease in real GDP.
D) a decrease in the price level.
E) an increase in aggregate demand.
A change in the price of the good measured on the horizontal axis changes ________ of
the budget line.
A) the slope and y-intercept
B) the slope and x-intercept
C) the x– and y-intercepts but not the slope
D) only the slope
E) only the y-intercept
Refer to Table 27.1.3. The marginal propensity to consume is
A) 0.35.
B) 0.65.
C) 1.15.
D) 1.65.
E) 1.54.
Use the figure below to answer the following questions.
Figure 27.2.2
The economy depicted does not engage in international trade and has no government.
Planned aggregate expenditure (AE) is equal to the sum of consumption expenditure (C)
and investment (I).
Refer to Figure 27.2.2. Investment is
A) $50 billion.
B) $25 billion.
C) $75 billion.
D) $100 billion.
E) increasing as real GDP increases.
Suppose that the world price of eggs is $1 a dozen, Canada does not trade
internationally, and the equilibrium price of eggs in Canada is $3 a dozen. Then Canada
begins to trade internationally. The price of eggs in Canada ________. Canadian
consumers buy ________ eggs.
A) rises; more
B) rises; less
C) falls; more
D) falls; less
E) rises; the same quantity of
The aggregate production function is graphed as
A) a downward-sloping curve.
B) an upward-sloping straight line.
C) an upward-sloping line that becomes flatter as the quantity of labour increases.
D) an upward-sloping line that becomes steeper as the quantity of labour increases.
E) a production possibilities frontier.
Suppose that Canada’s demand for imports decreases. All other things equal,
A) the demand for Canadian dollars decreases and the supply of Canadian dollars
increases.
B) the demand for Canadian dollars increases.
C) both the supply of and demand for Canadian dollars decreases.
D) the supply of Canadian dollars decreases.
E) the supply of Canadian dollars decreases and demand for Canadian dollars increases.
In Figure 1A.3.3 the relationship between x and y as x increases is
A) positive with decreasing slope.
B) negative with decreasing slope.
C) negative with increasing slope.
D) positive with increasing slope.
E) positive with slope first increasing then decreasing.