Survey of Economics
Exam Materials
Course Introduction
Survey of Economics provides an introductory overview of fundamental economic concepts and principles, including both microeconomics and macroeconomics. The course explores how individuals, businesses, and governments make decisions regarding resource allocation, and examines key topics such as supply and demand, market structures, fiscal and monetary policy, economic growth, and international trade. Emphasis is placed on understanding real-world applications of economic theory to current events and public policy, equipping students with the analytical tools necessary to interpret economic issues and trends on both a national and global scale.
Recommended Textbook
Exploring Microeconomics 3rd canadian Edition by Robert Sexton
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12 Chapters
1798 Verified Questions
1798 Flashcards
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Page 2
Chapter 1: The Role and Method of Economics
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288 Verified Questions
288 Flashcards
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Sample Questions
Q1) Trent decides to spend an hour playing basketball rather than studying. What is his opportunity cost?
A) The increase in skill he obtains from playing basketball for that hour.
B) Nothing, because he had a free pass into the sports complex to play basketball.
C) The benefit to his grades from studying for an hour.
D) Nothing, because he enjoys playing basketball more than studying.
Answer: C
Q2) Which of the following is NOT an example of a capital resource?
A) a commercial sewing machine
B) a pitch fork
C) 100 hectares of farmland in Central Ontario
D) the expertise of a computer programmer
Answer: C
Q3) What does the term "ceteris paribus" mean?
A) Everything is variable.
B) What is True for the individual is not necessarily True for the whole.
C) All variables except those specified are constant.
D) No one knows which variables will change and which will remain constant.
Answer: C
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Page 3
Chapter 2: Scarcity, Trade-Offs, and Production Possibilities
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166 Verified Questions
166 Flashcards
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Sample Questions
Q1) The opportunity cost of a particular good tends to increase with its rate of output because some resources cannot be easily adapted from the production of one good or service to another.
A)True
B)False
Answer: True
Q2) Refer to Figure 2-6. The diagram represents a trade-off in an economy between prison cells and classrooms. Which position represents the choice to allocate the greatest amount of resources to producing classrooms?
A) Point A
B) Point B
C) Point C
D) Point D
Answer: A
Q3) Refer to Figure 2-4. Currently, which point is impossible to achieve?
A) Point A
B) Point C
C) Point E
D) Point G
Answer: D
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Chapter 3: Supply and Demand
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) Which of the following will NOT increase the demand for iced tea?
A) an increase in advertising that makes drinking iced tea more appealing
B) a decrease in the price of iced tea
C) an increase in the income of consumers (assume that iced tea is a normal good)
D) an increase in the price of iced coffee, a substitute product
Answer: B
Q2) What is the result of an increase in a product's price?
A) Product supply does not change, but quantity supplied increases.
B) Product supply does not change, but quantity supplied decreases.
C) Product supply decreases.
D) Product supply increases.
Answer: A
Q3) Increasing government taxation or regulation of an industry generally increases the supply of goods.
A)True
B)False
Answer: False
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Chapter 4: Bringing Supply and Demand Together
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Suppose Canada steps up efforts to combat drug trafficking and, with the aid of the U.S. border patrol, intercepts a significant percentage of cocaine shipments. What will be the impact of this on the market for cocaine in Montréal?
A) The supply of cocaine will increase, causing the price of cocaine to increase.
B) The supply of cocaine will decrease, causing the price of cocaine to increase.
C) The demand for cocaine will increase, causing the price of cocaine to increase.
D) There will be a movement up along the supply curve of cocaine.
Q2) Refer to Table 4-2. Suppose that D and S are the demand and supply schedules for Product A. What will be the result if the government imposes a price ceiling of $10?
A) The ceiling will result in a surplus of 10 units.
B) The ceiling will result in a shortage of 4 units.
C) The ceiling will result in a surplus of 4 units.
D) The ceiling will have no impact on the quantity of Product A traded.
Q3) Markets tend toward equilibrium and, as a result, will tend to eliminate shortages and surpluses. Why?
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Chapter 5: Elasticity
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) A jeweller cut prices in his store by 20 percent and the dollar value of his sales fell by 20 percent. What is this indicative of?
A) inelastic demand
B) elastic demand
C) a vertical demand curve
D) a horizontal demand curve
Q2) A tax is imposed on wine. Under what circumstances will sellers bear the burden from this tax?
A) when the demand for wine is perfectly inelastic
B) when the demand for wine is perfectly elastic
C) when the supply curve for wine is unit elastic
D) when the supply curve for wine is perfectly elastic
Q3) Bailey's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a 15 percent decrease in the number of haircuts purchased. What is the elasticity of demand facing Bailey's Barber Shop?
A) 0.05
B) 0.10
C) 0.15
D) 3.0
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Chapter 6: Market Efficiency and Market Failure
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) Admission to Disney World is an example of a private good from which nonpaying individuals can be excluded.
A)True
B)False
Q2) Which of the following will most likely generate positive externalities?
A) a city bus
B) public education
C) an automobile
D) a hot dog vendor
Q3) Producer surplus from a unit of output is the difference between the market price and the seller's cost of producing that unit.
A)True
B)False
Q4) What is the term for the benefit that your neighbour receives when you landscape your front yard?
A) a positive externality
B) an external cost
C) a social externality
D) social efficiency
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Chapter 7: Production and Costs
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) Refer to Figure 7-1. When does marginal product begin to diminish?
A) with the first worker hired
B) with the second worker hired
C) with the third worker hired
D) with the fourth worker hired
Q2) What is the term for the change in total cost resulting from a one-unit increase in production?
A) average fixed cost
B) average opportunity cost
C) average variable cost
D) marginal cost
Q3) What will a new (superior) technology cause in the short run?
A) a decrease in MC, AVC, and ATC
B) an increase in AFC and a decrease in AVC
C) a decrease in MC and an increase in ATC
D) a decrease in both MC and AVC
Q4) How short is the short-run production period?
Q5) When marginal cost is increasing, average total cost must be increasing.
A)True
B)False
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Chapter 8: Perfect Competition
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) Refer to Figure 8-7. When the market price equals P , what output should the firm produce?
A) Q5, operating at a loss
B) Q4, earning an economic profit
C) Q5, earning a normal profit
D) Q4, operating at a loss
Q2) If a perfectly competitive firm is operating in the short run and seeks to maximize profit, what action should the firm take?
A) Choose the output where per-unit profit is greatest.
B) Increase output whenever price exceeds marginal cost.
C) Increase output whenever marginal revenue is less than marginal cost.
D) Increase output whenever marginal cost is less than average total cost.
Q3) Which of the following describes the horizontal demand curve facing an individual firm in a perfectly competitive market?
A) It is a reflection of the inelastic demand for its product.
B) It is maintained only with the help of high barriers to entry.
C) It is a reflection of the firm's small size relative to the total market.
D) It violates the law of demand, which states that demand curves slope downward.
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Chapter 9: Monopoly
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) Which of the following best describes the role of the Canadian government in the monopoly market?
A) It encourages the permanent monopolization of all markets in which the monopolist has technical superiority over potential competitors.
B) It forbids the creation of legal impediments to entry into any market.
C) It intervenes to prevent the monopolization of any market.
D) It intervenes to prevent the monopolization of some markets and actively encourages the monopolization of others.
Q2) Which of the following describes a monopoly, but does NOT describe perfect competition?
A) A profit-maximizing firm will shut down if price falls below the average variable cost.
B) Total revenue is the product of price times the quantity sold.
C) Firms can potentially earn economic profits in the short run.
D) Firms can potentially earn economic profits in the long run.
Q3) Monopoly profits cannot persist in the long run, because there are barriers to entry.
A)True
B)False
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Chapter 10: Monopolistic Competition and Oligopoly
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) In what way is monopolistic competition like monopoly?
A) They are both protected by a barrier to entry.
B) They are both comprised of many sellers.
C) They both have unique products.
D) They are both price searchers.
Q2) What would regulating monopolistically competitive firms to set price equal to marginal cost result in?
A) firms shutting down since price would be less than AVC
B) firms exiting the industry since price would be less than the long run AC
C) an increase in MC as firms try to comply with the new regulations
D) few firms entering the industry since price would be greater than AC
Q3) Burger King charbroils their burgers and Wendy's makes their burgers with square patties. The price of the two burgers is NOT the same. What is this an example of?
A) price discrimination
B) product differentiation
C) barriers to entry
D) patent protection
Q4) Explain how a monopolistically competitive firm choose their price and output decision.
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Chapter 11: Labour Markets and the Distribution of Income
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188 Verified Questions
188 Flashcards
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Sample Questions
Q1) While unions represent only a fraction of the unskilled workers in the Canadian labour market; any wage increase won by unionized workers is most likely shared with nonunion, unskilled workers.
A)True
B)False
Q2) As more workers are hired to harvest grapes in a vineyard, the fields become overcrowded. As a result, the marginal product of labour is likely to diminish.
A)True
B)False
Q3) Which of the following best describes the impact of unionization on given occupations?
A) It results in ease of entry and tends to lead to an increase in wage rates.
B) It results in ease of entry and tends to lead to a decrease in wage rates.
C) It results in barriers to entry and tends to lead to a decrease in wage rates.
D) It results in barriers to entry and tends to lead to an increase in wage rates.
Q4) Explain why an increasing divorce rate tends to increase the inequality of income.
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Page 13
Chapter 12: The Environment
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) In the last 30 years, what has happened to environmental legislation and pollution levels?
A) Legislation has been getting weaker, and pollution levels have been getting higher.
B) Legislation has been getting tougher, and pollution levels have been getting lower.
C) Legislation has been getting tougher, and pollution levels have been getting higher.
D) Legislation has been getting weaker, and pollution levels have been getting lower.
Q2) Refer to Figure 12-1, which represents a hypothetical market for steel. To internalize the externality, what is the per unit amount that the firms would have to pay society equal to?
A) OH
B) ACB
C) FHAC
D) HF
Q3) The Province of Ontario has recently banned the use of cellular telephones in automobiles. Do cellular phones create a negative externality?
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