Archives: Quiz

Refer to Table 21.3.1. The reference base period is 2014. The CPI in 2002 is A) 100. B) 157. C) 129. D) 63. E) 152. Refer to Figure 16.2.1. The figure shows the marginal private cost curve, the marginal social […]

For a single-price monopoly, the demand curve is A) below the marginal revenue curve. B) the same as the marginal revenue curve. C) above the marginal revenue curve. D) the same as the total revenue curve. E) below the average […]

The time spent looking for someone with whom to do business is called A) elasticity of time. B) market time. C) search activity. D) opportunity time. E) development time. When rent is not permitted to allocate scarce housing, what other […]

Which one of the following must be true if demand is income elastic? A) A large percentage increase in income will result in a small percentage increase in quantity demanded. B) A small percentage increase in income will result in […]

One of the reasons why real GDP grows is that A) prices increase. B) governments collect more taxes. C) capital grows as a result of investment. D) imports increase. E) people have more income. The shape of a person’s indifference […]

Refer to Figure 19.1.1. The richest 20 percent of households receive what share of total income? A) 10 percent B) 30 percent C) 40 percent D) 60 percent E) 100 percent Choose the statement that is incorrect. A) A financial […]

Refer to Figure 16.2.1. The figure shows the marginal private cost curve, the marginal social cost curve and the market demand curve. If a constant per unit tax is imposed that generates an efficient allocation of resources, then consumers pay […]

Refer to Figure 12.1.1. The firm competes in a perfectly competitive market. Curve A is a straight line because the firm A) is a price taker. B) faces constant returns to scale. C) wants to maximize profits. D) has perfect […]

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 […]

Firms in monopolistic competition have rivals that A) will always match their price increases. B) will always match their price decreases but not their price increases. C) all agree on a common price. D) set their price where the demand […]

The maximum level of real GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurial ability that would bring rising inflation is A) real GDP. B) nominal GDP. C) actual GDP. D) potential GDP. E) productive […]

In Figure 2.2.1, when 4,000 bicycles are produced each month, A) the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. B) more bicycles must be produced to reach the efficient level of output. C) […]

Refer to Figure 13.4.5. What is the redistribution of surplus from consumers to the producer with a perfect price-discriminating monopoly, as compared to a perfectly competitive market? A) EADH B) EABH C) ABD D) ACD E) KHD Table 15.2.2 gives […]

When firms reduce their target level of inventories, equilibrium expenditure ________ and real GDP ________. A) increases; decreases B) decreases; increases C) decreases; decreases D) increases; increases E) decreases; does not change In real business cycle theory, ________ are the […]

Whenever actual reserves exceed desired reserves, the bank A) can make new loans. B) will go out of business. C) needs to call in loans. D) will borrow funds from another bank. E) will raise the interest rate on its […]

The ratio of currency to deposits is the A) currency drain ratio. B) excess reserve ratio. C) monetary reserve ratio. D) reserve ratio. E) currency ratio. Dumping occurs when a foreign firm A) pollutes international waters. B) disposes of waste […]

Refer to Figure 13.3.1. The efficient quantity is A) 20 units. B) 40 units. C) 60 units. D) 80 units. E) zero units. Refer to Figure 12.4.1, which shows the cost curves and marginal revenue curve of a firm in […]

A tax on interest income A) decreases the demand for loanable funds but does not change the real interest rate. B) increases the demand for loanable funds and raises the real interest rate. C) increases the supply of loanable funds […]

Economists who have compared the incomes of never-married men and never-married women have found that with equal amounts of human capital A) men earn significantly more than women. B) women earn significantly more than men. C) the wages of the […]

Full employment A) occurs when all unemployment is cyclical and structural. B) occurs when all unemployment is frictional and discouraged. C) occurs when there is zero unemployment. D) occurs when there is zero frictional unemployment. E) occurs when there is […]

Refer to Figure 3.5.2, which represents the market for tacos. A new scientific study reveals that tacos cause bad breath. Simultaneously, the cost of producing tacos decreases. What is the new equilibrium, ceteris paribus? A) 2 B) 3 C) 9 […]

In the circular flow diagram, aggregate expenditure includes A) consumption expenditure, saving, investment and government expenditure. B) saving, investment, and taxes. C) consumption expenditure, investment, government expenditure, and taxes. D) consumption expenditure, investment, government expenditure and net exports. E) government […]

R1 is A) long-term unemployment. B) the official unemployment rate. C) comparable to the official U.S. rate. D) short-term unemployment. E) the unemployment rate that adds discouraged searchers to the official rate. Which one of the following is false? A) […]

According to a behavioural economist, a person who is unwilling to sell the last kilogram of rice he purchased for the same price that he paid for it is displaying A) the endowment effect. B) bounded rationality. C) bounded self-interest. […]

If a quota is set at the same quantity of imports that results from a tariff in Country A, A) the quantity consumed in Country A is less under the quota than under the tariff. B) the quantity consumed in […]

Federal Express enters into contracts with independent truck operators who offer FedEx service and who are rewarded by the volume (cubic feet) of packages they carry. FedEx does not hire more independent drivers because A) it is concerned about a […]

The demand for a good will be more price inelastic, A) the higher is its price. B) the larger is the percentage of income spent on it. C) the longer is the passage of time since a price change. D) […]

A firm’s efficient scale is the quantity at which ________ is a minimum. A firm has excess capacity if it produces ________ its efficient scale. A) average total cost; below B) marginal cost; above C) average total cost; above D) […]

Refer to Figure 28.2.2. The vertical distance between SAS0 and SAS1 represents the A) actual inflation rate. B) expected increase in real GDP. C) actual decrease in real GDP. D) expected inflation rate. E) expected decrease in the real wage […]

Which of the following statements concerning tariffs is NOT true? A) A tariff results in a deadweight loss. B) A tariff creates revenue for the government. C) A tariff decreases international trade. D) A tariff leaves the price of imports […]

If the demand curve for a good is a horizontal line, then the good has A) zero income elasticity. B) price elasticity of demand equal to zero. C) infinite price elasticity of demand. D) a price elasticity of demand that […]

For a cartel to succeed, A) it does not need the cooperation of a majority of firms in the industry. B) there must be free entry of rival firms. C) consumers must have alternative products available to satisfy the same […]

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) […]

If the price of a burger is $2.90 Canadian in Toronto and $3 U.S. in New York, and if purchasing power parity holds, then the exchange rate is A) $1 U.S. per Canadian dollar. B) $3 U.S. per Canadian dollar. […]

Refer to Fact 14.1.1. The market for batteries is ________ and the market for jewellery is ________. A) monopolistic competition; an oligopoly B) a monopoly; monopolistic competition C) a monopoly; perfectly competitive D) an oligopoly; monopolistic competition E) an oligopoly; […]

The absence of incentives to prevent the overuse of a common resource that arises when its users have no incentive to conserve it and use it sustainably is referred to as A) unsustainable production. B) sustainable production. C) the tragedy […]

Use the figure below to answer the following questions. Figure 12.3.1 Refer to Figure 12.3.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry. In the short run, if the market price […]

The supply of loanable funds is the relationship between the quantity of loanable funds supplied and ________, other things remaining the same. A) real GDP B) the price level C) the real interest rate D) the inflation rate E) the […]

Which of the following is a characteristic of a single-price monopoly? A) Many substitutes for the firm’s product exist. B) Price exceeds marginal revenue. C) Demand is perfectly elastic. D) The firm is a price taker. E) Marginal revenue is […]

The monetary base consists of the sum of A) Bank of Canada notes held within the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks. B) Bank of Canada notes held outside the Bank […]

Which of the following is not considered money in Canada today? A) deposits at credit unions B) bank of Canada notes C) deposits at banks D) coins E) debit cards What is a distinguishing characteristic of goods that are perfect […]

To decrease aggregate demand, the Bank of Canada can A) raise the overnight loans rate, which decreases the quantity of money. B) lower the overnight loans rate, which increases the quantity of money. C) lower the overnight loans rate, which […]

Suppose the Nunavut government decides to repair Iqaluit roads. One way to generate sufficient funds for this plan is to increase taxes on gasoline. The government will be able to raise total revenue from gasoline sales only if the demand […]

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 […]

If the money wage rate falls, then A) the AD curve shifts rightward. B) firms hire less labour. C) the LAS curve shifts rightward. D) the SAS curve shifts rightward. E) the LAS curve and the SAS curve shift rightward. […]

Real money is equal to A) nominal income divided by the velocity of circulation. B) nominal income divided by the price level. C) nominal money divided by the price level. D) the price level divided by nominal money. E) nominal […]

Refer to Figure 1A.1.5. Which graph or graphs indicates a positive relationship between x and y? A) (a) B) (b) C) (c) D) (d) E) (a) and (d) Which one of the following statements is false? A) If the indifference […]

Economic efficiency and economic equity have what relationship? A) Redistribution of income reduces economic equality while it increases economic efficiency. B) Income is equitably distributed in free market systems without intervention by government. C) There is a no tradeoff between […]

Use the information below to answer the following question. Fact 10.2.2 A Medical Sensation Hospitals are buying da Vinci surgical robots. Surgeons, sitting comfortably at a da Vinci console, can use various robotic attachments to perform even the most complex […]

Business cycles are A) irregular, with some having two recessions and no expansion. B) predictable, with a recession following a trough. C) unpredictable, but always have two phases and two turning points. D) unpredictable, and don’t always have two phases […]