Chapter 1 The Economic Problem

Question 1

The highest-valued alternative that is given up or sacrificed when choosing to produce or consume one good over another is referred to as ______

Answer 1

an opportunity cost

Question 2

Calgary is 286 km from Edmonton” would be what king of statement.

Answer 2

Positive

Question 3

The factors of production include which of the following?

Answer 3

enterprise
capital
land (natural resources)
labor

Question 4

What is the definition of productive efficiency?

Multiple choice question.

Answer 4

The maximization of output from available inputs.

Question 5

Why does voluntary trade make all parties better off?

Answer 5

It permits all parties to acquire goods and services better suited to their needs and wants.

Question 6

“If prices are increased for a product, the quantity demanded will decrease” is an example of a hypothesis.

Answer 6

True

Question 7

What is a hypothesis?

Answer 7

An idea that can be tested.

Question 8

For economic growth, the opportunity cost of more capital goods is ______.

Answer 8

less consumer goods

Question 9

Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people”?

Answer 9

A billion people have gotten out of abject poverty due to globalization.

With more world trade there will be more benefits to those who trade.

Question 10

Productive efficiency is the ability to produce at the lowest per unit cost in relation to inputs.

Answer 10

True

Question 11

Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people?

Answer 11

With more world trade there will be more benefits to those who trade.
A billion people have gotten out of abject poverty due to globalization.

Question 12

Which of the following are issues most explored in microeconomics?

Answer 12

A firm’s decision to hire more workers.

The taxes placed on individuals.

Measuring the price of specific goods.

Measuring total revenues of a firm or household.

Question 13

Deciding what is produced and what is not produced infers that economics is sometimes called the science of ______.

Answer 13

Choice

Question 14

Which of the following would be considered the simple definition of “technology” by an economist?

Answer 14

A method of production

Question 15

Which of the following best describes allocative efficiency?

Answer 15

Producing goods the people want.

Question 16

______ economics considers the subjective desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.

Answer 16

Normative

Question 17

Canada produces both sweaters and shoes and suppose the technology used for the production of shoes improves. How will this be represented on a production possibilities curve diagram?

Answer 17

The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same.

Question 18

______ statements focus on facts that can be verified.

Answer 18

Positive

Question 19

What is the main reason one nation trades with another?

Answer 19

To exploit the mutual gains both countries can acquire.

Question 20

Which of the following are issues most explored in macroeconomics?

Answer 20

Unemployment and inflation rates.

Measuring the price of all goods using the Consumer
Price Index..

The Gross Domestic Product and economic growth

Question 21

The branch of economics that studies the economy as a whole or in the aggregate is known as ______.

Answer 21

macroeconomics

Question 22

What is economics primarily the study of?

Answer 22

How limited resources are allocated to satisfy unlimited wants.

Question 23

Due to scarce resources, every individual, whether rich or poor, faces a(n) (one word) cost when choosing to produce or consume more of one good over another.

Answer 23

Opportunity

Question 24

Which question is the most important to answer but also the most difficult.

Answer 24

Why

Question 25

________ studies the ways in which humans and societies attempt to satisfy seemingly unlimited human wants in the face of limited resources.

Answer 25

Economics

Question 26

What is economics most concerned with?

Answer 26

How people cope with unlimited wants but face limited resources.

Question 27

Why is there often disagreement between people when discussing various economic issues?

Answer 27

Economics is part science and part art. Peoples' set of values differ from person to person.

Question 28

A change in technology results in a pivot of the PPC curve (one axis moving more than the other).

Answer 28

True

Question 29

Which of the following will NOT shift the production possibilities curve outward?

Answer 29

A decrease in capacity utilization of existing factories.

Question 30

Which of the following correctly opposes the statement "economic growth is something that we should applaud and always strive to achieve"?

Answer 30

Growth puts emphasis on material goods instead of things like job satisfaction and a stronger sense of community. Economic growth can lead to environmental damage.

Question 31

Economics is called the science of choice because deciding what to make is a founding question.

Answer 31

True

Question 32

A country will experience more economic growth if it invests in more capital than consumer goods.

Answer 32

True

Question 33

When examining the change in a variable?

Answer 33

WHY is the hardest question to answer.

Question 34

Which of the following correctly opposes the statement "there should be an introduction of road pricing in congested Canadian cities to reduce traffic during peak times"?

Answer 34

Road pricing is a government tax grab. Road pricing put a disproportionate burden on low income drivers.

Question 35

_________ is the discipline of economics concerned with individual units such as a person, household, firm or industry. (Enter one word in each blank.)

Answer 35

Micro or Microeconomics

Question 36

Canada produces both sweaters and shoes and suppose the technology used for the production of both improves. How will this be represented on a production possibilities curve diagram?

Answer 36

The entire curve will shift out.

Question 37

if an economy is operating efficiently and the production possibilities curve shifts outwards, which of the following are possible outcomes?

Answer 37

Good B will increase but A will remain unchanged. Both goods A and B will increase. Good A will increase but B will remain unchanged.

Question 38

Which of the following correctly opposes the statement "Governments should use its income redistribution tools to channel more income from the rich to the poor"?

Answer 38

A larger economic pie is needed since richer countries already have more evenly distributed incomes. Higher taxes are a disincentive to work.

Question 39

Which of the following correctly supports the statement "Economic growth is something that we should applaud and always strive to achieve?

Answer 39

The economic well being of the average Canadian has doubled in the last two generations. Economic growth leads to social and political stability.

Question 40

______ is being considered when looking at the choices of goods and services that can be produced in an economy

Answer 40

What to produce

Question 41

In economics, what does the term scarcity mean?

Answer 41

The desire for goods is much greater than our ability to produce them with limited available resources

Question 42

The law of increasing marginal costs is driven by ______.

Answer 42

resources that are not equally productive in the production of different goods or interchangeable the fact that as a the economy increases the output of one product the per unit costs of that product rise

Question 43

Normative economics is ____.

Answer 43

based on subjective or value judgments

Question 44

Productive ______ is measured in terms of the ratio of outputs produced to inputs used.

Answer 44

efficiency

Question 45

Producing the right combination of products is called allocative efficiency.

Answer 45

True

Question 46

What is the definition of a positive statement?

Answer 46

Measurable or verifiable statements.

Question 47

Which of the following correctly supports the statement "globalization only benefits large multinational corporations, not ordinary people"?

Answer 47

When it comes to environmental and labour regulations, there is a race to the bottom. Globalization leads to big companies moving jobs to countries where the wage rate is lower.

Question 48

Canada produces both sweaters and shoes and suppose the technology used for the production of shoes improves. How will this be represented on a production possibilities curve diagram?

Answer 48

The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same

Question 49

When a country wants to economically grow more in the future it must:

Answer 49

produce more capital goods.

Question 50

Which of the following will shift the production possibilities curve outward?

Answer 50

Discovery of a new efficient way of producing computers. Improved infrastructure. A better educated workforce.

Question 51

______ is concerned with how the major components of the economy

Answer 51

Macroeconomics or Macro

Question 52

The law of increasing costs states that as production of a particular good ______, the opportunity cost of producing an additional unit ______.

Answer 52

rises; rises

Question 53

Technology involves the combination of the four factors of . (Enter one word in the blank.)

Answer 53

production

Question 54

Which of the following describe the concept of laissez-faire capitalism?

Answer 54

The role of government includes to ensuring the appropriate operation of the market system. The role of government includes protecting private property.