Quiz 3 Part 1

1.

1 point

Opportunity cost as defined in Economic theory as:

the cost of making no purchase at any price and receiving no benefit

the cost of not recognizing an opportunity when one is presented

the cost of not taking a deal when it is the best deal avilable

the cost of taking a deal then finding a better deal afterwards

the cost of not selecting the "next-best" alternative

2.

1 point

Unregulated monopolies for essential goods and services result in:

none of the above

stimulation of other areas of the economy

higher consumer surplus

increased producer efficiency

lower consumer prices

3.

1 point

When a particular good/service is seen to be essential it is termed "inelastic". When a particular good is seen to be optional or a luxury it is termed to be relatively. Which of the following statements are true?

An increase in price will result in a decrease in TR demand is elastic

An increase in price will result in an increase in TR when demand is inelastic

unregulated monopolistic producers can charge more to an elastic consumer than inelastic consumer

regulated monopolistic producers benefit most from inelastic consumers

a and b

4.

1 point

A nation`s standard of living depends most on:

its productivity

its form of government (democracy is best)

the security of its currency

its commitment to the environment

its values and history

5.

1 point

Competition expanded markets work to:

increase market efficiency

lower costs

increase consumption

increase savings

a, b, and c

6.

1 point

Inflation causes:

an increase in prices

an increase in the actual value of debt

a short-term increase in unemployment

a long term decline in unemploment

a and d

7.

1 point

In Economics, the consumer is assumed to:

maximize GDP

minimize cost

maximize benefit

b and c

none of the above

8.

1 point

The PPC curve is a graphical depiction of:

none of the above

the Price Principle curve

Product Production Cost

the law of supply and demand

the marginal opportunity cost

9.

1 point

Trade should only occur if:

both parties have a monopoly on different products

both parties practice democracy

each party has a trade advantage in at least one product

none of the above

one party has an absolute trade advantage in both products

10.

1 point

Free trade increases the global output and consumption of goods in all participating nations.

True

False

11.

1 point

From Figure 1, which of the lines is generated by the Consumer and which by the Producer?

lines S and D are both independent of consumers and producers

both lines (S and D) are generated by both consumers and producers

Consumers - S and Producers - D

none of the above

Consumers - D and Producers - S

12.

1 point

With reference to figure 1, if the y axis is in dollars per item, what is the cost of the 10 items at market equilibrium?

$20.00

$30.00

$60.00

$5.00

$10.00

13.

1 point

When the marginal utility of a product is less than zero, the consumer should:

sell commodities, but buy equities

stop consuming the product

continue production, but only at the level identified by set costs

shut down the production facility

stockpile the product as long as the marginal utility remains less than zerio

14.

1 point

"Value in use" versus "value in exchange" is an explanation for:

why Karl Marx was wrong and Adam Smith was right

why home mortgages are safer investment than commodities

why commodities that have some real value are safer options for investment than securities

why governments typically spend more than they take in from tax revenues

why gold is more valuable than water

15.

1 point

The main reason monopolies are better than competition for consumers is:

monopolies create a more efficient market place

monopolies are not better for consumers

monopolies provide stable platforms for research and development that benefit the consumer in the long term

monopolies are not subject to mood swings from consumers

monopolies are too big to fail and thus provide more stability to consumers

16.

1 point

From the above figure what distinguishes monopolies from perfect competition?

monopolies have a smaller consumer surplus

monopolies have a larger producer surplus

monopolies reduce the combined + producer surplus

a and b only

a, b and c

17.

1 point

Which of the above figures shows a perfectly elastic demand curve

A

B

both A and B

neither A nor B

not possible to say with information provided

18.

1 point

LAND

peofit

wages

taxes

rent

interest

19.

1 point

labor

profit

wages

taxes

rent

interest

20.

1 point

Entrepreneurial Endeavor

profit

wages

taxes

rent

interest

21.

1 point

Capital

profit

wages

taxes

rent

interest

22.

1 point

Government

profit

wages

taxes

rent

interest

23.

1 point

Fifty items are produced at a total cost of $200.00. If the total variable cost (TVC) is $190.00, what is the average fixed cost (AFC)?

4

0.2

3.8

none of the above

10

24.

1 point

A firm profits are maximized when:

MR

MR=MC

MR+delta TR/ delta Q

MR = P

MR>MC

25.

1 point

Most world output is produced by monopolies and oligopolies

True

False

26.

1 point

What is the Herfindahl Index for Canada's oil refining sector?

795

12480

1523

5280

288

27.

1 point

Based on the Herfindahl score, Canada's oil refining sector so best described as:

perfect competition

monopoly

highly competitive

moderately competitive

highly concentrated

28.

1 point

Petro-Canada Herfindahl Index:

0

1000

10,000

100

not enough information

29.

1 point

Best description of the nationalized oil-refining sector:

not-for-profit

monopsony

monopoly

socialism

imperfect competition

30.

1 point

Miss Cheng could spend two hours at a concert or tutoring a student at $100 per hour. She could use the time on painting instead and earn a total of $120. If the price of the concert ticket is $250, what is the opportunity cost of her choice of going to the concert?

$450.00

$350.00

$250.00

$170.00

$420.00

31.

1 point

Mary has accumulated 20 Coupons. What is the opportunity cost (alternative users) to her if uses them exchange for one camera?

3 cups

cup or bag

bag

cup

cup and bag

32.

1 point

A good example of an externality that can affect the marketplace is:

scarcity of goods

consumer choice

more efficient production

government regulations and subsidies

diversity among the ability of consumer to pay

33.

1 point

Which of the following are opportunity costs of attending school?
1) Poor examination results
2) Wage income forgone
3) School fees
4) Expenditure on dinners

1 and 4 only

2 and 3 only

1 and 3 only

2,3 and 4 only

3 and 4 only

34.

1 point

Which of the following statements is/are false?

A higher expected future price will increase current demand

A lower expected future price will decrease current demand

A higher expected future income will increase the demand for all normal goods

A lower expected future income will reduce the demand for all normal goods

none of the above

35.

1 point

Economics is:

the manner by which national policies are developed to ensure equity and fairness among buyers and sellers in the market place

the means by which rich industrialists and capitalists control and profit from the professional and working classes

a confused and arcane set of contrived "principles" that fail to describe market behaviour at local, national, or global levels

a historical field of study that is no longer relevant because of globalization and government regulation of trade

is how society manages its scarce resources

36.

1 point

Societies that do not have scarce resources are termed:

socialist

equitable

egalitarian

agrarian

resources are scarce in all societies

37.

1 point

The figure below demonstrates that

over-spending by government results in public debt that effects all other government services

An increase in the interest rate results in a reduction in the quantity of capital sold

Capital increases as the demand for good increases

The supply of capital is a function of the demand for capital

the demand for capital declines as the interest rate diminishes

38.

1 point

The figure below refers to the economics of non-renewable resources. What might cause the shift from the 2000 supply curve to 2010 curve?

the resource is being used up

a decline in the marginal factor cost of production

a decline in the fixed cost of production

both b and c

an increase in the labor cost of production

39.

1 point

The fraction of Canada's annual health care budget that goes to people over 60 years old is:

55%

90%

75%

35%

<10%