Use the figure below to answer the following questions.
Figure 13.4.2
Refer to Figure 13.4.2. Assume this monopolist practises perfect price discrimination.
This means that
A) the monopoly’s behaviour is illegal.
B) one price is charged to young people and a different price to older people.
C) a different price can be charged to each buyer.
D) price will rise as the number of buyers increases.
E) the quantity sold will be less compared to the case of no price discrimination.
If there is an unplanned decrease in inventories, aggregate planned expenditure is
A) greater than real GDP, and firms increase production.
B) greater than real GDP, and firms decrease production.
C) less than real GDP, and firms increase production.
D) less than real GDP, and firms decrease production.
E) greater than real GDP, and firms increase investment.
A correctly anticipated increase in the quantity of money, in an economy with an
unchanging long-run aggregate supply, will result in
A) a rise in the price level and an increase in real GDP.
B) a rise in the price level and a decrease in real GDP.
C) a proportional rise in the price level and no change in real GDP.
D) no change in the price level and an increase in real GDP.
E) no change in the price level and no change in real GDP.
When individuals make decisions about how much schooling to obtain, they
A) do not consider the personal benefits that education creates.
B) overvalue the personal benefits that education creates.
C) overvalue the external benefits that education creates.
D) do not consider the external benefits that education creates.
E) set marginal social benefit equal to tuition.
Use the table below to answer the following question.
Table 5.2.4
Table 5.2.4 shows the demand schedules for pizza for Abby and Barry who are the only
buyers in the market. What is the marginal social benefit from the 45th slice of pizza?
A) $3.50
B) $4.00
C) $2.50
D) $5.00
E) $4.50
A perfectly competitive firm is producing at the point at which marginal cost equals
marginal revenue.
If the firm increases production, total revenue ________ and economic profit
________.
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases
E) increases; remains unchanged
A normative statement is
A) about what ought to be.
B) about what is.
C) always true.
D) always false.
E) capable of evaluation, as true or false, by observation and measurement.
If a 12 percent fall in price results in an 8 percent increase in quantity demanded, the
price elasticity of demand equals
A) 0.96.
B) 0.12.
C) 0.67.
D) 1.5.
E) 0.8.
Use the table below to answer the following questions.
Table 20.2.1
Data From Eastland
Refer to Table 20.2.1. From the information given in the table, the value of gross
domestic product is
A) $1,280.
B) $1,290.
C) $1,360.
D) $1,120.
E) $1,100.
Refer to the figure below to answer the following questions.
Figure 7.2.1
The figure shows the market for shirts in Canada, where D is the domestic demand
curve and S is the domestic supply curve. The world price is $20 per shirt.
In Figure 7.2.1, with international trade, Canadians buy ________ million shirts per
year.
A) 48
B) 32
C) 16
D) 24
E) 56
If a large percentage drop in the price level results in a small percentage increase in the
quantity demanded,
A) demand is inelastic.
B) demand is elastic.
C) demand is unit elastic.
D) the price elasticity of demand is close to infinity.
E) the price elasticity of demand is zero.
If the number of suppliers of good Y increases, then
A) a movement up along the supply curve of good Y will occur.
B) a movement down along the supply curve of good Y will occur.
C) the supply curve of good Y shifts rightward.
D) the supply curve of good Y shifts leftward.
E) the supply curve of good Y will remain unchanged.
To lower interest rates, the Bank of Canada can
A) increase the treasury bill rate.
B) raise the exchange rate.
C) buy government securities.
D) decrease bank reserves.
E) raise the bank rate.
We observe an increase in the price level and an increase in real GDP. Which of the
following is a possible explanation?
A) a decrease in the quantity of money
B) a decrease in expected future income
C) an increase in factor prices
D) an increase in the quantity of capital
E) an increase in expected future profits
If the price of a good increases, everything else remaining the same, then the
consumer’s total utility
A) decreases.
B) increases.
C) decreases if the good has no substitutes and remains the same if the good has at least
one substitute.
D) increases if the good has no substitutes and remains the same if the good has at least
one substitute.
E) remains the same.
To graph a relationship among more than two variables, what assumption is necessary?
A) normative
B) positive
C) linear
D) independence of variables
E) ceteris paribus
Use the information below to answer the following question.
Fact 15.1.2 Sparks Fly for Energizer
Energizer is gaining market share against competitor Duracell and its profit is rising
despite the sharp rise in the price of zinc, a key battery ingredient.
Refer to Fact 15.1.2. The market for batteries is
A) an oligopoly with a small number of interdependent firms.
B) a monopolistic competition with many firms that have no incentive to collude.
C) perfectly competitive with no barriers to entry.
D) a monopoly.
E) an oligopoly with no barriers to entry.
If the economy is operating at full employment, then
A) everyone who wants a job has one.
B) the entire labour force is employed.
C) the unemployment rate is approximately 3 percent.
D) the unemployment rate is zero.
E) the unemployment rate is equal to the frictional unemployment rate plus the
structural unemployment rate.
A public good is
A) nonrival and nonexcludable.
B) produced by monopolies.
C) rival and excludable.
D) rival and nonexcludable.
E) nonrival and excludable.
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. If Canada did
not trade with the rest of the world, then the equilibrium price of lumber would be
________ in Canada than the rest of the world, and the equilibrium price of wine would
be ________ in Canada than the rest of the world.
A) lower; higher
B) higher; lower
C) higher; higher
D) lower; lower
E) sometimes higher and sometimes lower; always higher
If a factor of production can be used to produce either good A or good B, then A and B
are
A) substitutes in production.
B) complements in production.
C) substitutes.
D) complements.
E) normal goods.
Reducing a tariff ________ the domestic production of the good and ________ the total
domestic consumption of the good.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) does not change; increases
All points on the PPF are points of ________ efficiency. When we produce at the point
on the PPF that we prefer above all other points we achieve ________ efficiency.
A) production; allocative
B) allocative; allocative
C) allocative; production
D) unattainable; attainable
E) productive; prominent
Anti-combine law
A) can work in the public interest to maximize total surplus or in the self-interest of
producers to maximize producer surpluses.
B) always works in the self-interest of producers to maximize producer surpluses.
C) always works in the public interest to maximize total surplus.
D) encourages oligopolies to exhibit more monopolistic behaviours.
E) is always prosecuted in Canada’s criminal courts.
The marginal rate of substitution
A) is the amount of good Y substituted for good X as a consumer moves along his
budget line.
B) is the rate at which a person gives up the good measured on the y-axis to get an
additional unit of the good measured on the x-axis while remaining on the same
indifference curve.
C) increases as a consumer consumes more of the good measured on the x-axis.
D) is greater than the magnitude of the slope of the budget line.
E) is equal to the slope of the budget line.
Use the table below to answer the following question.
Table 15.2.3
Refer to Table 15.2.3. Store X and Store Y must decide whether or not to lower their
prices. The table gives the economic profit made by Store X and Store Y. Which one of
the following observations is correct?
A) Both Store X and Store Y have a dominant strategy of raising their prices.
B) If Store X lowers its prices and Store Y does not, Store X will earn a $20 profit.
C) If Store Y lowers its prices, Store X will be better off not lowering its prices.
D) Both Store X and Store Y would be better off if they could collude and agree to not
lower prices.
E) Both Store X and Store Y have a dominant strategy of lowering their prices.
If new capital increases labour productivity, the supply of labour ________ and the
demand for labour ________.
A) stays the same; increases
B) increases; increases
C) increases; decreases
D) decreases; stays the same
E) increases; stays the same
The economy illustrated by the data in Table 2.1.1 exhibits
A) decreasing opportunity cost.
B) constant opportunity cost in the production of X.
C) constant opportunity cost in the production of Y.
D) increasing opportunity cost.
E) initially increasing, then decreasing opportunity cost.
Suppose that Simon Fraser University decides to raise tuition fees to increase the total
revenue it receives from students. This policy works only if the demand for a Simon
Fraser University education is
A) unit elastic.
B) inelastic.
C) elastic.
D) greater than the demand for a University of Western Ontario education.
E) perfectly elastic.
Given Fact 2.4.1, Andy and Rolfe
A) can gain from trade if Andy specializes in butter production and Rolfe specializes in
bread production.
B) can gain from trade if Andy specializes in bread production and Rolfe specializes in
butter production.
C) cannot gain from trade.
D) can trade, but only Rolfe will gain.
E) can trade, but only Andy will gain.
Use the table below to answer the following questions.
Table 3.5.3
Demand and supply schedules for designer sport t-shirts at CoolU
Refer to Table 3.5.3. The equilibrium price is $________ and the equilibrium quantity
is ________ t-shirts per month.
A) 6; 200
B) 7; 220
C) 8; 180
D) 8; 220
E) 8; 200
The price elasticity of demand is a units-free measure of the responsiveness of the
________ when all other influences on buying plans remain the same.
A) quantity demanded to a change in the price of a substitute or complement
B) quantity demanded to a change in income
C) quantity demanded of a good to a change in its price
D) price to a change in quantity demanded
E) quantity demanded of a good to a change in supply
A decrease in the quantity supplied of a good is shown by
A) a movement down along the supply curve.
B) a leftward shift of the supply curve.
C) a movement up along the supply curve.
D) a rightward shift of the supply curve.
E) an initial rightward shift and then leftward shift of the supply curve.