Which one the following industries is the best example of an oligopoly?
A) the market for wheat
B) the fast-food industry
C) the automobile industry
D) the clothing industry
E) the restaurant industry
At price P1 in Figure 3.4.1,
A) producers can sell all they plan to sell.
B) consumers can buy all they want.
C) producers are unwilling to sell any goods.
D) a surplus exists.
E) both sides of the market are able to carry out their desired transactions.
If the marginal propensity to consume is 0.85, what change in consumption expenditure
would you expect if disposable income increases by $200 million?
A) $20 million
B) $170 million
C) $180 million
D) $1,800 million
E) $18 million
The market for strawberries is perfectly competitive. Joe and Haley are consuming the
same amount of strawberries, but Joe’s demand is much more elastic than Haley’s.
Which statement is true?
A) Joe’s consumer surplus exceeds Haley’s.
B) Haley’s consumer surplus equals Joe’s.
C) Haley’s consumer surplus exceeds Joe’s.
D) In comparing consumer surpluses, no statement can be made.
E) Any comparison of consumer surplus depends on the price of strawberries.
Which of the following industries in Canada has the lowest four-firm concentration
ratio?
A) tires
B) soft drinks and ice
C) textiles
D) sugar
E) wooden windows and doors
Suppose the multiplier is 2 and the short-run aggregate supply curve is positively
sloped. Investment increases by $10 billion. In the short run, equilibrium real GDP
A) increases by $20 billion.
B) increases by more than $20 billion.
C) decreases by less than $20 billion.
D) does not change.
E) increases by less than $20 billion.
A tractor is an example of which of the following factors of production?
A) capital
B) labour
C) land
D) entrepreneurship
E) energy
Which of the following issues is a concern that critics express about the use of an
inflation-control target?
A) The policy control rests in the hands of civil servants rather than in the hands of
elected officials.
B) The policy control rests in the hands of elected officials rather than in the hands of
civil servants.
C) It encourages a focus on real GDP growth at the expense of employment and of
inflation.
D) It encourages a focus on inflation at the expense of employment and real GDP
growth.
E) Monetary policy tends to be sensitive to the state of employment while focusing on
inflation control targets.
Normal profit is the ________. Normal profit ________ part of a firm’s opportunity
cost.
A) return that an entrepreneur can expect to receive on the average; is
B) profit used by the Canada Revenue Agency to calculate tax owing; is
C) profit used by the Canada Revenue Agency to calculate tax owing; is not
D) return that an entrepreneur can expect to receive on the average; is not
E) difference between total revenue and total cost; is
Use the information below to answer the following question.
Fact 15.4.1
Apple conspired with five publishers to undercut Amazon’s 90 percent share of the
e-book market, which caused e-book prices to rise to $12.99 or $14.99 from the $9.99
that Amazon charged.
Refer to Fact 15.4.1. This conspiracy to raise prices violates the anti-combine law
because
A) Apple is merging with the five publishers.
B) Apple is telling the publishers the price at which they must sell e-books.
C) Apple is refusing to deal with Amazon.
D) it substantially lessens competition in the e-book market.
E) it is creating a monopoly.
On the average in Canada, the inflation rate and the money growth rate minus real GDP
growth rate
A) move in opposite directions.
B) are not related.
C) rise and fall together.
D) are always rising.
E) are always equal.
Choose the statement that is incorrect.
A) Stocks, bonds, short-term securities, and loans are financial assets.
B) The interest rate on a financial asset is the interest received expressed as a
percentage of the price of the asset.
C) If the asset price rises, other things remaining the same, the interest rate falls.
D) Insolvency can arise from a previously unexpected large rise in the interest rate.
E) The price of an asset is determined first, then the interest rate is determined.
Use the figure below to answer the following questions.
Figure 9.2.3
Refer to Figure 9.2.3. Rashid buys only books and albums. The figure shows his
preferences. When Rashid chooses the consumption point of 3 books and 2 albums, his
marginal rate of substitution is
A) 1 book per album.
B) zero.
C) 3/2 books per album.
D) 2/3 books per album.
E) 0.5 books per album.
The four-firm concentration ratio for men’s clothing makers is 27 and for electric lamp
makers it is 89. The HHI for men’s clothing makers is 362 and for electric lamp makers
it is 2,850. The men’s clothing market ________ an example of monopolistic
competition. The electric lamp market ________ an example of monopolistic
competition.
A) is; is
B) is not; is
C) is; is not
D) is not; is not
E) sometimes is and sometimes is not; sometimes is and sometimes is not
A consumer choosing between apples and oranges is at her best affordable point. Then
the price of apples decreases. If both apples and oranges are normal goods, which one
of the following statements is true about her new best affordable point?
A) She will consume more apples and more oranges.
B) She will consume more apples and fewer oranges.
C) She will consume fewer apples and more oranges.
D) She will consume fewer apples and fewer oranges.
E) She will consume more apples, and we do not know whether she will consume more
or less oranges.
Suppose a firm is trying to decide whether or not to temporarily shut down to minimize
total loss. If price equals average variable cost, then
A) total revenue equals total fixed cost, and the loss equals total variable cost.
B) total revenue equals total variable cost, and the loss equals total fixed cost.
C) total fixed cost is zero.
D) total variable cost equals total fixed cost.
E) total cost equals total variable cost.
A tariff on watches which are imported by Atlantis ________ the price of watches in
Atlantis and ________.
A) lowers; imports of watches increase
B) raises; watch production in Atlantis increases
C) raises; watch production in Atlantis decreases
D) lowers; watch production in Atlantis increases
E) lowers; watch production in Atlantis decreases
Refer to Table 20.2.1. From the data in the table, what additional data are needed to
compute net domestic income at market prices?
A) statistical discrepancy
B) transfer payments
C) subsidies
D) depreciation
E) net taxes
When a textile firm decides to produce more silk fabric and less cotton fabric, it is
answering the ________ question.
A) “who”
B) “how”
C) “what”
D) “where”
E) “when”
In an oligopoly market, the Herfindahl-Hirschman Index is usually
A) below 2,500.
B) zero.
C) above 2,500.
D) equal to 10,000.
E) between 100 and 1,000.
The equilibrium real interest rate is determined by the
A) demand for loanable funds curve and the supply of loanable funds curve.
B) demand for loanable funds curve and real GDP.
C) supply of loanable funds curve and financial institutions.
D) government expenditure curve and the taxation curve.
E) banks and insurance companies.
Total revenue is more likely to rise when the price rises if
A) there are few substitutes for the good.
B) a high proportion of income is spent on the good.
C) some extended period of time passes.
D) all of the above
E) none of the above
Which of the following is least likely to display diminishing marginal benefit?
A) land
B) labour
C) capital
D) entrepreneurship
E) knowledge
Capital stock increases when
A) gross investment exceeds net investment.
B) net investment exceeds gross investment.
C) gross investment is negative.
D) net investment is positive.
E) net investment is zero.
Table 7.3.1 shows the Canadian supply of and demand for widgets. Widgets are
available on the world market for $7. Canadian widget producers convince the
government to protect the domestic industry from cheap imports. If the Canadian
government sets an import quota of 8 million widgets, the resulting price of a widget in
Canada will be ________, and domestic production will be ________.
A) $6; 40 million
B) $7; 36 million
C) $8; 32 million
D) $9; 28 million
E) $10; 32 million
In Figure 27.2.3, autonomous expenditure is
A) $10 billion.
B) $100 billion.
C) $150 billion.
D) $347 billion.
E) $375 billion.
Use the figure below to answer the following question.
Figure 1A.5.2
If the line in Figure 1A.5.2 were to continue down to the x-axis, what would the value
of x be when y is zero?
A) 0
B) 2
C) 2/3
D) -2/3
E) -3/2.
Use the table below to answer the following questions.
Table 11.3.1
Refer to Table 11.3.1, which gives Tania’s total cost schedule. The average fixed cost of
producing 9 teapots per day is
A) $2.22.
B) $1.25.
C) $10.00.
D) $1.11.
E) $1.54.
Refer to Table 12.2.2, which gives the total cost schedule for Chip’s Pizza Palace, a
perfectly competitive firm. If Chip shuts down in the short run, his total cost is
A) $0.
B) $10 an hour.
C) $12 an hour.
D) $22 an hour.
E) $40 an hour.
In January 2014, Tim’s Gyms, Inc. owned machines valued at $1 million. During the
year, the market value of the machines fell by 30 percent. During 2011, Tim spent
$200,000 on new machines. During 2014, Tim’s gross investment was
A) $1 million.
B) $300,000.
C) $200,000
D) $900,000.
E) $100,000.
Scarcity confronts
A) neither the poor nor the rich.
B) the rich but not the poor.
C) the poor but not the rich.
D) the rich and the poor.
E) families with incomes less than $25,000 a year.
Use the information below to answer the following questions.
Fact 2.4.1
In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of
butter. In an eight-hour day, Rolfe can produce either 8 loaves of bread or 8 kilograms
of butter.
Given Fact 2.4.1, the opportunity cost of producing 1 loaf of bread is
A) 20 minutes (1/3 hour) for Andy and 1 hour for Rolfe.
B) 1/3 kilogram of butter for Andy and 1 kilogram of butter for Rolfe.
C) 3 kilograms of butter for Andy and 1 kilogram of butter for Rolfe.
D) 8 kilograms of butter for both Andy and Rolfe.
E) not calculable from the given information.
Use the table below to answer the following question.
Table 2.1.4
Consider the following production possibilities for a student for the typical week:
Refer to Table 2.1.4. Complete the following sentence. The production possibilities
frontier in the table shows
A) increasing opportunity cost.
B) learning-by-doing.
C) constant opportunity cost.
D) under-utilization of resources.
E) decreasing opportunity cost.