Chapter 1 MCQ Flashcards
You can’t get everything you want because you are limited by
A time.
B money.
C energy.
D all of the above.
d) We all have limited time, energy, and money.
Scarcity is
A not a challenge for governments.
B not a challenge for celebrities.
C not a challenge for people who win the lottery.
D a challenge for everyone.
d) Even Bill Gates faces the problem of scarcity.
Economics does not focus on
A individuals.
B animals.
C businesses.
D government.
b) Economics is about people (also in businesses and government) making choices.
Opportunity cost includes
A time you give up.
B energy you spend.
C money you spend.
D all of the above.
d) All are scarce.
In deciding whether to study or sleep for the next hour, you should consider all of the following except
A how much tuition you paid.
B how tired you are.
C how productive you will be in that hour.
D how much value you place on sleeping in that hour.
a) Paid tuition is the same for either choice.
IT IS A SUNK COST
If the resource-rich sector of Alberta’s economy slows down,
A opportunity costs of upgrading to a college diploma increase.
B opportunity costs of upgrading to a college diploma decrease.
C incentives to drop out of college increase.
D all of the above.
b) Going to college means giving up fewer good jobs. With fewer good jobs in a weaker economy, the opportunity cost of going to school decreases.
Mutually beneficial gains from trade come from
A absolute advantage.
B comparative advantage.
C self-sufficiency.
D China.
b) Differences in opportunity costs key to gains from trade.
The easiest way to calculate opportunity cost is
A Give up/Get
B Get/give up
C give up – get
D get – give up
A) Give up / GET
in one hour, Chloe can bake 24 cookies or 12 muffins. Zabeen can bake 6 cookies or 2 muffins. For mutually beneficial trade, Chloe should
A bake cookies because she has a comparative advantage.
B bake cookies because she has an absolute advantage.
C bake muffins because she has a comparative advantage.
D bake muffins because she has an absolute advantage.
c) Chloe’s opportunity cost of muffins (2 cookies per muffin) lower than Zabeen’s (3 cookies per muffin).
Which of the following statements is normative?
A Economists should not make normative statements.
B Warts are caused by handling toads.
C As smartphone prices fall, people will buy more of them.
D As test dates get closer, students study more hours.
a) Notice the word should.
In the circular-flow model,
A households ultimately own all inputs of an economy.
B governments set the rules of the game.
C businesses are sellers and households are buyers in output markets.
D all of the above.
D all of the above
Which of the following is not a microeconomic choice for businesses?
A what interest rate to set
B what products to supply
C what quantity of output to produce
D how many workers to hire
a) Macroeconomic choice by government.
Which of the following is not a microeconomic choice for governments?
A increasing tuition rates
B taxing automobile emissions
C increasing the exchange rate of the Canadian dollar
D increasing the number of taxi licences
c) International exchange rates are a macroeconomic topic.
All of the following should be considered when making smart choices, except
A external costs and benefits.
B past costs and benefits.
C implicit costs.
D additional costs and additional benefits.
b) The past is the same no matter what choice you make now.
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