The exchange rate is volatile because
A) government policy promotes interest rate fluctuation.
B) the demand curve for foreign exchange is very flat.
C) the demand curve for foreign exchange is very steep.
D) the supply curve of dollars is vertical.
E) the supply of dollars and demand for dollars are influenced by similar events.
Use the table below to answer the following questions.
Table 12.2.5
Refer to Table 12.2.5. Archibald’s Tattoos is a perfectly competitive firm. The firm’s
total costs are shown in the table. If the price of a tattoo is $12.50, Archibald’s economic
profit is
A) -$10.00 an hour.
B) zero.
C) $12.50 an hour.
D) $10.00 an hour.
E) maximized.
Use the figure below to answer the following questions.
Figure 19.3.6
Refer to Figure 19.3.6. If this is the market for a group of workers who are
discriminated against by customers and point A represents the equilibrium without
discrimination, which point represents the equilibrium for the workers who are
discriminated against?
A) D
B) B
C) I
D) C
E) H
Use the table below to answer the following questions.
Table 25.4.1
Refer to Table 25.4.1. If Mengia’s official settlement balance was in balance every year,
for which year or years can you say for sure there was a current account surplus?
A) year 4 only
B) year 2 only
C) years 2 and 3
D) years 1 and 2
E) years 3 and 4
Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are
available on the world market for $7. If the Canadian government imposes a tariff of
$1, how many widgets will Canada import?
A) 32 million
B) 24 million
C) 16 million
D) 28 million
E) 40 million
Refer to Figure 14.2.3. Assume this firm faces demand curve D1. If the firm produced
the efficient quantity, it would produce
A) 100 units.
B) 220 units.
C) 200 units.
D) 250 units.
E) 140 units.
Refer to Figure 28.2.6. Starting at point A, the initial effect of a cost-push inflation is a
move to point ________. As a cost-push inflation spiral proceeds, it follows the path
________.
A) C; B, H, G, I
B) C; E, H, I
C) B; E, G, I
D) E; I
E) B; D, G, I
Tom and Don have different opportunity costs of producing two goods. If Tom and Don
specialize in producing the goods in which each has a comparative advantage and they
exchange goods, then
A) they each lose because they are no longer able to produce and consume both goods.
B) one of them will gain and one of them will lose.
C) each will gain because each can consume a combination of goods that is outside his
production possibility frontier.
D) each will produce a combination of goods that is outside his production possibilities
frontier.
E) each will produce a combination of goods that is inside his production possibilities
frontier.
The production possibilities frontier shows
A) the maximum possible rate of growth of output in an economy.
B) the maximum quantity of resources available at any given time.
C) the maximum level of production that can be attained.
D) combinations of goods and services that do not fully use available resources.
E) the effect of advancing technology on production possibilities.
Refer to Figure 31.3.1. The tariff ________ Canada’s imports of shirts by ________
million shirts per year.
A) decreases; 16
B) decreases; 8
C) increases; 8
D) increases; 4
E) increases; 16
Consider a market that sells some of its goods as exports. Who does NOT benefit?
A) domestic consumers
B) domestic producers
C) workers in the industry
D) foreign consumers
E) All of the above benefit.
Refer to Fact 19.4.1. This news clip implies that
A) in 2009, the highest quintile gave 15.5 percent of its income to the lowest quintile.
B) Canada should increase income redistribution.
C) income redistribution in 2009 leads to more income equality than in 1989.
D) income redistribution in 2009 leads to less income equality than in 1989.
E) income redistribution in 2009 leads to the same income equality in 1989.
The Laffer curve is the relationship between
A) government expenditure and potential GDP.
B) the tax rate and potential GDP.
C) tax revenue and potential GDP.
D) the tax rate and the amount of tax revenue.
E) government outlays and revenues.
Coal is an example of
A) a nonrenewable natural resource.
B) a renewable natural resource.
C) a public resource.
D) a common resource.
E) capital.
Which one of the following is not a reason why the wages of high-skilled workers
exceed the wages of low-skilled workers?
A) The market for high-skilled workers is more competitive than the market for
low-skilled labour.
B) The value of marginal product of high-skilled workers is greater than that of
low-skilled workers.
C) The cost of obtaining the human capital required for high-skilled workers is greater
than the cost of obtaining the human capital required for low-skilled workers.
D) High-skilled workers have acquired more human capital than low-skilled workers.
E) The demand curve for high-skilled workers lies to the right of the demand curve for
low-skilled workers.
Suppose that the business cycle in Canada is best described by RBC theory. An advance
in technology increases productivity. The when-to-work decision depends on the real
interest rate. The ________ the real interest rate, other things remaining the same, the
________ is the supply of labour today. RBC theorists believe the when-to-work effect
is ________.
A) lower; smaller; small
B) higher; smaller; small
C) higher; larger; large
D) lower; larger; large
E) higher; larger; small
Use the figure below to answer the following questions.
Figure 13.2.3
Refer to Figure 13.2.3. Assume this firm is a single-price monopoly. What is the
profit-maximizing price to charge for the tickets?
A) $5.00
B) $4.00
C) $3.00
D) $2.00
E) $3.50
If the market for a nonrenewable natural resource is currently in equilibrium, the price
of the resource
A) is equal to the value of marginal product of the resource.
B) is expected to rise at a rate equal to the interest rate.
C) is expected to fall at a rate equal to the interest rate.
D) will actually rise at a rate equal to the interest rate.
E) will actually fall at a rate equal to the interest rate.
Which of the following is true?
A) When resources are allocated on the basis of personal characteristics, all people who
are willing and able to pay the price get the resource.
B) When the range of activities to be monitored is large and complex, a command
system allocates resources better than a market price.
C) When a market price allocates resources, some people who are willing and able to
pay that price don’t get the resource.
D) Force provides the state with an effective method of transferring wealth from the
rich to the poor.
E) When resources are allocated by force, people with the “right” characteristics get the
resources.
A labour union is
A) an illegal conspiracy of workers formed to strike against employers.
B) a legal organization of workers with a goal to overthrow the capitalist class.
C) an organized group of workers that attempts to increase wages and influence other
job conditions.
D) an organized group of crime syndicates.
E) a union with members working in the same industry, but in different jobs.
If a profit-maximizing firm in a perfectly competitive market is making an economic
profit, then it must be producing a level of output where
A) price is greater than marginal cost.
B) price is greater than marginal revenue.
C) marginal cost is greater than marginal revenue.
D) marginal cost is greater than average total cost.
E) average total cost is greater than marginal cost.
Suppose a minimum wage of $4 an hour is in force, resulting in unemployment of 10
million hours. Then the demand for labour increases such that supply and demand
curves intersect at a wage rate of $5 per hour. What will happen to the equilibrium wage
rate and employment?
A) The wage rate is $5 an hour and there will be no unemployment.
B) The wage rate is $5 an hour and there will be a surplus of labour.
C) The wage rate is $4 an hour and there will be a surplus of labour.
D) The wage rate is $4 an hour and there will be no unemployment.
E) The wage rate is $4 an hour and there will be unemployment.
A rise in the price of a good
A) decreases demand for the good.
B) creates a movement up along the supply curve.
C) creates a movement down along the demand curve.
D) increases the supply of the good.
E) increases preferences for the good.
A good economic model
A) does not include more than two variables.
B) includes only those features of the world that are needed for the purpose at hand.
C) describes all aspects of the economic world.
D) includes only features of the world that can be described numerically.
E) includes more than two variables but less than 10 variables.
A single-price monopolist’s demand curve
A) is its marginal revenue curve.
B) shows that demand for the good is perfectly elastic.
C) is the same as the market demand curve.
D) shows that demand for the good is perfectly inelastic.
E) is horizontal.
Sharing downloaded music
A) has a free-rider problem that cannot be eliminated because once music is
downloaded, it is nonexcludable.
B) has a free-rider problem that can be eliminated by charging people to download
music.
C) is a private good.
D) does not have a free-rider problem.
E) is a common resource.
If a perfectly competitive firm is producing an output at which price is equal to average
total cost, the firm
A) should shut down.
B) is breaking even.
C) is making an economic profit.
D) is incurring an economic loss.
E) is not producing its profit-maximizing quantity.
Refer to Figure 24.5.2. Which one of the following best describes the response to a rise
in the price level?
A) A movement from A to B
B) A movement from A to C
C) A movement from A to F
D) A movement from A to E
E) None of the above
The income distribution in Canada is
A) bell-shaped.
B) positively skewed.
C) negatively skewed.
D) uniform.
E) unfair.
Refer to Table 3.1.1. Between 2012 and 2013, the price of coffee relative to the price of
tea ________ while the price of coffee relative to the price of cola ________.
A) rose; rose
B) rose; fell
C) fell; rose
D) fell; fell
E) fell; stayed constant
Refer to Figure 3.5.2, which represents the market for beans. If the price of peas, a
substitute for beans and a substitute in production, rises, what is the new beans
equilibrium, ceteris paribus?
A) 2
B) 3
C) 9
D) 4
E) 7