(Test Bank) Understanding Economics A Contemporary Perspective, Canadian Edition

Lovewell, 8

Business

Test Bank

8th Edition

• $15.00 $50.00

---

Description

Test Bank for Understanding Economics A Contemporary Perspective, Canadian Edition, The downloadable file consists of 489 pages, and the total size of the file is 7.89 MB. Purchase now only for highly discounted price.

Author(s): Lovewell

---

---

Study Note Preview

Version 1 1 CHAPTER 1 1) The economic problem is essentially one of deciding how to make the best use of: A) unlimited resources to satisfy unlimited wants B) limited resources to satisfy unlimited wants C) unlimited resources to satisfy limited wants D) limited resources to satisfy limited wants E) free resources to satisfy expensive wants 2) Economists assume that people customarily behave rationally, meaning that people: A) virtually always weigh the personal benefits and costs of every available action and choose an action on the basis of their individual wants B) act in a rational way when buying and selling products, but not in other settings C) act rationally when they buy products, but not when they sell them D) act rationally when they sell products, but not when they buy them E) are unable to act in an irrational way 3) An economist who says that consumer wants are inexhaustible means that: A) economic resources are valuable only because they can be used to produce consumer goods B) economic resources—natural, capital, and human resources—are scarce C) consumers wants are virtually unlimited and, therefore, incapable of being fully satisfied D) the nature of consumer wants is highly unpredictable E) the nature of consumer demand varies from time to time and from country to country 4) The fundamental problem of economics is:Version 1 2 A) to establish equity between personal and business taxation B) to establish a democratic political framework for the provision of social goods and services C) to establish prices that accurately reflect the relative scarcities of products and resources D) to achieve a fair distribution of money income to reduce poverty E) the scarcity of productive resources relative to consumer wants 5) The economic problem stems from the fact that: A) the production possibilities curve bows out to the right B) resources are scarce relative to people's demand for goods and services C) people act to maximize their own welfare D) historically the production possibilities curve has been shifting down toward the origin E) the production possibilities curve bows in to the left 6) The study of economics is carried out because: A) government interferes with the efficient distribution of scarce resources B) resources are scarce in relation to consumer wants C) the market system is an obstacle to the efficient use of plentiful resources to satisfy limited wants D) resources are overly abundant as compared with wants and, therefore, a distribution problem exists E) government aids in the efficient distribution of scarce resources 7) The scarcity problem:Version 1 3 A) persists only because countries have failed to achieve continual full employment B) persists because a society's consumer wants exceed its available economic resources C) has been eliminated in all industrialized nations D) has been eliminated in affluent societies such as Canada and the United States E) is eliminated when a nation has achieved full employment 8) Because of scarcity, the efficient use of resources is: A) an important economic goal in all economies B) an important economic goal only in command economies C) an important economic goal only in market economies D) not an important economic goal E) an important economic goal only in traditional economies 9) As used in economics, the notion of scarcity means that: A) mineral deposits are available only in limited amounts B) resources are not so plentiful that all consumer wants can be fulfilled C) many resources are freely available D) the quantities available of some resources exceed the demand for them E) the demand for some resources is nonexistent 10) Stocks and bonds are not considered to be an economic resource because they: A) sometimes fall in value B) do not earn interest income C) are available in unlimited quantities D) are not free gifts of nature E) do not add to the economy's stock of real capital Version 1 4 11) The money payments made to owners of human resources are: A) wages, salaries, or interest B) wages, salaries, or rent C) interest or profit D) wages, salaries, or profit E) rent or profit 12) Economic resources do NOT include: A) natural resources B) real capital assets C) human effort D) stocks and bonds E) human ingenuity 13) Which of the following is a capital resource? A) a pair of stockings B) a dump truck C) a savings account D) a share of IBM stock E) a Bell Canada bond 14) The role of the entrepreneur involves:Version 1 5 A) waiting for leadership B) manual labour C) bearing risks D) hiring chartered accountants to make business decisions for them E) acting as a landowner 15) Economics can best be described as the study of how: A) to profitably to invest one's income in stocks and bonds B) to manage household expenses C) government policies affect businesses and labour D) to manage business enterprises for profit E) to distribute limited resources among alternative ends 16) Economics is primarily the study of: A) why resources are scarce B) how advertising and sales promotion shape consumer wants C) how to make profitable investments D) how to use scarce resources among alternative ends E) why consumer wants are unlimited 17) Microeconomics is concerned with the: A) total levels of income, employment, and output B) behaviour of individual participants in various markets C) causes of inflation and unemployment D) overall view of the operation of the economic system E) way governments can stabilize the economy Version 1 6 18) Which of the following is a microeconomic statement? A) Total economic output increased by 2.5 percent last year. B) Unemployment was 9.8 percent of the labour force last year. C) The price of wheat declined last year. D) The general price level increased by 4 percent last year. E) Business investment decreased by 2 percent last year. 19) Macroeconomics approaches the study of economics from the viewpoint of: A) individual producers B) governmental units C) specific product and resource markets D) individual consumers E) entire economic sectors 20) Which of the following is a macroeconomic statement? A) The total value production in was $850 billion last year. B) The price of smartphones increased by 10 percent since last year. C) Boeing's profits substantially decreased since last year. D) The productivity of Canadian steelworkers increased by 1 percent last year. E) The prices of all social media stocks rose by 25 percent last year. 21) Economic models:Version 1 7 A) are useless because they are not based upon laboratory experiments B) deal with a multitude of details C) are generalizations of economic reality D) are abstractions of reality and are, therefore, of no use to economists E) are more effective the more complex they are 22) Economic models: A) are of limited use because they cannot be tested empirically B) are limited to variables that are directly related to one another C) emphasize basic economic relationships by abstracting from the complexities of the real world D) are unrealistic and are, therefore, of no practical consequence E) are often illogical, but are sometimes useful 23) Which of the following is a correct statement? A) Economics is concerned only with explaining the way that economies actually operate and not with how they should operate. B) Though not quantitatively exact, economic laws are useful because they allow us to predict and, therefore, to control or to adjust to events. C) Economics is as scientific as physics and chemistry because economic laws are as quantitatively precise as the laws of physics or chemistry. D) Because economics is concerned with questions of "ought," it is a branch of applied ethics and not scientific. E) Economics is concerned with how economies should operate and not with how they do operate. 24) An economic model usually includes:Version 1 8 A) neither independent nor dependent variables B) only a dependent variable and no independent variables C) the proposition that no relationship exists between various factors D) only an independent variable and no dependent variables E) two or more factors that have measurable values 25) Which of the following statements is correct? A) The value of the independent variable is determined by the value of the dependent variable. B) The value of the dependent variable is determined by the value of the independent variable. C) The dependent variable designates the "cause" and the independent variable the "effect." D) There is no cause and effect relationship between an independent and dependent variable. E) There is only a cause and effect relationship between two dependent variables. 26) If we say that two variables are directly related, this means that: A) the relationship between the two is purely random B) an increase in one variable is associated with a decrease in the other variable C) an increase in one variable is associated with an increase in the other variable D) an increase in one variable is associated with no change in the other variable E) there is no relationship between the two variables 27) If we say that two variables are inversely related, this means that:Version 1 9 A) there is no relationship between the two variables B) an increase in one variable is associated with a decrease in the other variable C) an increase in one variable is associated with an increase in the other variable D) an increase in one variable is associated with no change in the other variable E) the resulting relationship can be portrayed by a straight line parallel to the horizontal axis 28) Consider the following table: After-Tax Income Consumption $1000 $900 2000 1800 3000 2700 4000 3600 5000 4500 These data suggest that: A) consumption varies inversely with after-tax incomes B) consumption varies directly with after-tax incomes C) consumption and after-tax income are unrelated D) a tax increase will increase consumption E) a tax decrease will decrease consumption 29) If an inverse relationship exists between x and y, then a(n): A) increase in x will not affect y B) decrease in x will cause y to decrease C) increase in y will cause x to increase D) increase in x will cause y to decrease E) an increase in y will not affect x Version 1 10 30) Ceteris paribus means that: A) if event A precedes event B, A has caused B B) economics deals with facts, not values C) if event A happens then event B cannot happen D) prosperity inevitably follows recession E) all other things remain the same 31) The basic purpose of the ceteris paribus assumption is to: A) isolate the relationship between two variables by assuming all other factors remain constant B) allow one to focus upon micro variables by ignoring macro variables C) allow one to focus upon macro variables by ignoring micro variables D) determine whether x causes y or vice versa E) determine whether two variables are directly or inversely related 32) Suppose an economist says "Ceteris paribus, the lower the price of the breakfast cereal, Wheaties, the larger the amount of Wheaties purchased." This statement indicates that: A) the quantity of Wheaties purchased determines the price of Wheaties B) all factors other than the price of Wheaties (for example, consumer preferences and incomes) are assumed to be constant C) economists can conduct controlled laboratory experiments D) one cannot generalize about the relationship between the price of Wheaties and quantity purchased E) the price and quantity demanded of Wheaties are directly related 33) A positive statement is one that:Version 1 11 A) outlines a direct relationship between two variables B) outlines an inverse relationship between two variables C) is subjective and is, therefore, based upon a value judgement D) is necessarily true E) is objective and is, therefore, based upon facts 34) Which of the following is a positive statement? A) The humidity is too high today. B) It is too hot to jog today. C) The temperature is 22°C. D) I enjoy summer evenings when it cools off. E) I dislike humid nights. 35) Which of the following is a positive statement? A) To me, the temperature along with the humidity today makes it feel like it is over 45 degrees. B) Recent scientific research in nutrition science is very interesting and will likely have a positive impact on at least 75% of the population. C) The development of artificial intelligence to predict online consumer purchasing behaviour is very concerning. D) I believe that 100 percent of my staff at my law firm are only interested in the facts of any particular case. E) Data from a nationwide opinion survey revealed that 60 percent of the population puts a high value on hard work. 36) Normative statements are concerned with:Version 1 12 A) facts and theories B) what ought to be C) what is D) rational choice involving costs and benefits E) what can never be 37) Which of the following is a normative statement? A) The temperature is high today. B) The humidity is high today. C) It is too hot to play tennis today. D) It will cool off later this evening. E) I think it will be hot today. 38) Which of the following is a normative statement? A) Tabulations from data collected in a recent government survey show that 10 percent of adults in the population think that social media ought to be heavily regulated. B) Social media is detrimental to the current generation. C) French fries are not really French. D) The Toronto Raptors have signed Cameron Payne, a guard who played last season with Chicago and Cleveland. E) A random sample of a population is a necessary condition in order to obtain unbiased statistics. 39) A product has utility if it:Version 1 13 A) takes more and more resources to produce successive units of it B) can be produced in unlimited quantities C) satisfies consumer wants D) is useful E) is available in only limited quantities 40) Utility refers to the: A) extent to which a product can be used as a capital resource B) opportunity cost of a product C) relative scarcity of a product D) usefulness of a product E) satisfaction that a consumer derives from a good or service 41) To maximize utility, a consumer who derives greater satisfaction from writing music than from studying drama will choose to: A) study music B) study drama C) write plays D) write music E) both write music and study drama 42) Which of the following expressions best states the idea of opportunity cost?Version 1 14 A) "A penny saved is a penny earned." B) "He who hesitates is lost." C) "There is no such thing as a free lunch." D) "All that glitters is not gold." E) "Watch the pennies, and the pounds will look after themselves." 43) The notion of opportunity cost: A) applies to consumers, but not to businesses B) applies to businesses, but not to consumers C) is relevant to economies of all ideological persuasions D) would disappear if we were able to eliminate poverty E) does not apply to governments 44) The concept of opportunity cost: A) is irrelevant in command economies because of central planning B) suggests that resources are often unlimited in quantity C) is irrelevant if the production possibilities curve is shifting to the right D) suggests that inexhaustible wants can be fulfilled E) suggests that the use of resources in any particular line of production means that alternative outputs must be forgone 45) Which of the following is not an illustration of the notion of opportunity cost?Version 1 15 A) A growing economy can produce more ice cream and more ice cream cones at the same time. B) If I buy a pizza, I will not be able to afford a movie. C) Resources devoted to the production of computers are not available for the production of computer software. D) The land on which a Saskatchewan farmer plants wheat is not available for barley production. E) The more time it takes to commute to work, the less time is available for other activities. 46) The notion of opportunity cost is best defined as: A) the monetary price of any productive resource B) the amount of labour that must be used to produce one unit of any product C) the monetary price of any product D) the utility that could have been gained by choosing an action's best alternative E) the number of units of a product that are available to be purchased 47) Which of the following best describes your opportunity cost of downloading a free app on your smartphone? A) The utility you get from using the app. B) The time spent by the programmer in order to develop the app. C) The different alternative uses of the app. D) The time you spent downloading and registering the app. E) The remaining storage space on your phone after the app is installed. 48) The production possibilities curve illustrates the basic principle that: