Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ECO 1102 > Exam > Flashcards

Exam Flashcards

1
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Sam’s opportunity cost of making one mini-sandwich is ___ melon appetizer

A

1/2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Sam’s opportunity cost of making one melon appetizer is ____ mini-sandwiches

A

2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Suppose the reception has been postponed, and Sam has an extra 4 hours to prepare. The opportunity cost of making one mini-sandwich is now ___ melon appetizer

A

1/2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Suppose the reception has been postponed, and Sam has an extra 4 hours to prepare. The opportunity cost of making one melon appetizer is now ___ mini-sandwiches

A

2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Suppose Sam’s friend Chris helps by preparing the melon slices, increasing Sam’s productivity to 300 mini-sandwiches or 300 melon appetizers per hour. The opportunity cost of making one mini-sandwich is now ___ melon appetizer

A

1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and 6 hours in which to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

Suppose Sam’s friend Chris helps by preparing the melon slices, increasing Sam’s productivity to 300 mini-sandwiches or 300 melon appetizers per hour. The opportunity cost of making one melon appetizer is now ___ mini-sandwich

A

1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The concepts of specialization and gains from trade explain:

A

both international trade and the choices individuals make.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

A production possibilities frontier is a line or curve that:

A

shows all the possible combinations of outputs that can be produced using all available resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A realistic production possibilities curve:

A

is more concave than one assuming increasing opportunity costs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Choosing to produce at any point within a production possibilities frontier:

A

is inefficient, meaning the society would not be using all its available resources in their best possible uses.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

A

shift out.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Suppose that, given the same number of workers, Canada can produce five times as many computers or 10 times as many airplanes as Mexico. Which of the following statements is true?

A

Canada has an absolute advantage in the production of both airplanes and computers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

If a country possesses the absolute advantage in the production of one good:

A

it can produce more of that good given the same resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Suppose a Canadian worker can make 20 pairs of shoes or grow 100 apples per day. An American worker, on the other hand, can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

a) Canada has the absolute advantage in the production of both shoes and apples.
b) The U.S. has the absolute advantage in the production of both shoes and apples.
c) Canada has the absolute advantage in the production of shoes and the U.S. has the absolute advantage in the production of apples.
d) The U.S. has the absolute advantage in the production of shoes and Canada has the absolute advantage in the production of apples.

A

a) Canada has the absolute advantage in the production of both shoes and apples.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Suppose England has a comparative advantage over Canada in producing tea. If this is true, then:

A

England should produce more tea than it wants and sell the rest to Canada.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Lululemon is a Canadian company, but its yoga pants are put together in China. The sale of each yoga pant then is counted in GDP as:

A

Im, an import.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The balance of trade is the value of:

A

exports minus the value of imports.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

When a country imports more than it exports, it has a:

A

trade deficit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

A country that typically runs a trade surplus is:

A

China.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

A country that typically runs a trade deficit is:

A

the United States.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The investment when a firm runs part of its operation abroad or invests in another company abroad is called:

A

foreign direct investment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Suppose total Canadian exports in the month of June were $122.9 billion and total imports from foreign countries were $192.4 billion. What was the balance of trade?

A

$-69.5 billion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Suppose the new CEO of Lululemon Inc. decides to produce all the company’s products in Canada instead of China.

The supply of Canadian dollars will shift to the ____

A

left

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Suppose the new CEO of Lululemon Inc. decides to produce all the company’s products in Canada instead of China.

The demand for Canadian dollars will shift to the ____

A

right

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Suppose the new CEO of Lululemon Inc. decides to produce all the company’s products in Canada instead of China.

The value of the Canadian dollar will ________

A

appreciate

26
Q

In March 2009, the Canadian dollar was worth $0.78 U.S. dollars. In April 2011, the Canadian dollar was worth $1.06 U.S. dollars. What effect would this increase have on the trade balance between the United States and Canada?

A

Canadian imports will rise and Canadian exports will fall, so the Canadian trade balance will fall and the U.S. trade balance will rise

27
Q

The net capital outflow is the:

A

net flow of funds invested outside of a country.

28
Q

Countries that have a trade surplus have a:

A

positive net capital outflow.

29
Q

Portfolio investment can generally travel across borders _________ foreign direct investment can.

A

more quickly than

30
Q

Portfolio investment can generally travel across borders quickly because it usually involves:

A

transfers between two bank accounts.

31
Q

Foreign portfolio investment is sometimes called hot money because:

A

it can be withdrawn from a country very quickly.

32
Q

The balance of payments:

A

is the accounting of trade in goods and capital.

33
Q

The balance-of-payments identity is an equation that shows that the value of:

A

net exports equals the net capital outflow.

34
Q

In a closed economy S = I, so in an open economy:

A

S = I + NX.

35
Q

People in an open economy who wish to invest can either:

A

Invest at home or abroad.

36
Q

When people invest at home, it is called _____, and when they invest abroad it is called _______.

A

I; NCO

37
Q

If Bob in Victoria buys bonbons made in France for $25, and the French chocolatier buys stock in RIM for $25, then the French:

A

net exports and net capital outflow both equal $25.

38
Q

When interest rates in Canada increase, we could expect:

A

more foreigners investing in Canadian assets.

39
Q

If people have a sudden decrease in confidence in the open economy of Canada and no longer want to invest there, the:

A

NCO increases, and the demand for loanable funds curve would shift right.

40
Q

When the Canadian government runs a deficit, the savings in the market for loanable funds:

A

shifts left, increasing interest rates and decreasing NCO.

41
Q

The “crowding out” effect refers to:

A

the reduction in domestic investment caused by governments running a deficit.

42
Q

The exchange rate is the:

A

value of one currency expressed in terms of another currency.

43
Q

If $1 is worth 10 yen, then 1 yen is worth:

A

$0.10.

44
Q

When the value of a currency experiences exchange-rate appreciation, it’s value:

A

increases relative to the value of another currency.

45
Q

When the value of one currency increases relative to the value of another currency, it has experienced:

A

exchange rate appreciation.

46
Q

Who is most likely to benefit when the U.S. dollar appreciates against the euro?

A

U.S. buyers of foreign goods

47
Q

When the Canadian dollar appreciates against a foreign currency, Canadian goods become:

A

more expensive to people abroad, and we expect net exports to decrease.

48
Q

When the Canadian exchange rate appreciates, the trade deficit will:

A

usually rise, too.

49
Q

The demand for Canadian dollars will increase in foreign-exchange markets if:

A

Canada is perceived to be a safer place for investment relative to other nations.

50
Q

If the dollar appreciates in the foreign exchange market:

A

net exports will decrease.

51
Q

When the Bank of Canada decides to enact expansionary monetary policy, the supply of loanable funds:

A

increases, while the demand for loanable funds decreases.

52
Q

When the Bank of Canada lowers the interest rate:

A

both investment and net exports increase.

53
Q

If a country has a floating exchange rate, it means their currency:

A

can be freely traded and their value is determined by the market.

54
Q

In an economy with a fixed exchange rate, an increased demand for foreign goods would increase the supply of local currency, and the government would have to buy:

A

local currency in the foreign-exchange market to prevent the currency from depreciating.

55
Q

A speculative attack:

A

can occur to currencies with fixed exchange rates.

56
Q

In order to maintain a fixed exchange rate:

A

a country cannot change its money supply.

57
Q

When multiple countries are trying to boost their economies by lowering their interest rates, it causes a situation referred to as:

A

competitive devaluation.

58
Q

The real exchange rate:

A

is the nominal exchange rate adjusted for purchasing power parity.

59
Q

If the cost of a typical basket of goods in Canada is $100 and in China it is 500 yuan, and the nominal exchange rate is 10 yuan per dollar, what is the real exchange rate?

A

2.

60
Q

The institution that is responsible for maintaining international monetary stability is:

A

the International Monetary Fund.

61
Q

If the cost of a typical basket of goods in Canada is $100 and in Germany it is 200 euros, and the nominal exchange rate is.7 euro per dollar, what is the real exchange rate?

A

0.35.

ECO 1102 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions