Question 1

Which of the following best describes the fundamental problem that economics seeks to address?

Accepted Answer

How to allocate limited resources to satisfy unlimited wants

Question 2

Which of the following is an example of a positive incentive?

Accepted Answer

A gold star awarded to schoolchildren for good performance

Question 3

The rationality assumption in economics states that:

Accepted Answer

People do not intentionally make decisions that leave them worse off

Question 4

Which of the following statements is a normative economic statement?

Accepted Answer

The government should print less money.

Question 5

Suppose a government offers reciprocal gifts to encourage charitable donations after a natural disaster. According to the study mentioned, what is the likely outcome?

Accepted Answer

Donations will increase, but more funds will go to areas offering gifts rather than those most in need.

Question 6

Which of the following best illustrates the concept of opportunity cost?

Accepted Answer

Choosing to study for an exam instead of going out with friends

Question 7

Which of the following is NOT a basic economic question every society must answer?

Accepted Answer

Who will produce the items?

Question 8

In the context of economic systems, what is the main difference between centralized command and control and the price system?

Accepted Answer

The price system uses decentralized decision making, while centralized command and control relies on authority.

Question 9

Which of the following is an example of a microeconomic issue?

Accepted Answer

The effect of a new tax on a specific product

Question 10

Which assumption is commonly used in economic models to isolate the effect of one variable?

Accepted Answer

Ceteris paribus assumption

Question 11

A student is deciding whether to pursue an advanced degree. According to economic analysis, which factor should be considered in their decision?

Accepted Answer

The expected increase in earnings compared to the cost of education

Question 12

Which of the following best describes the difference between positive and normative economics?

Accepted Answer

Positive economics describes what is; normative economics describes what ought to be.

Question 13

Which formula best represents the relationship between education and earnings, as described in the study materials?

Accepted Answer

$$E = E_0$ 	imes (1 + 0.10)^n$$

Question 14

Which of the following is NOT considered a resource in economics?

Accepted Answer

Unlimited wants

Question 15

Which statement about economic models is correct?

Accepted Answer

Economic models are simplified representations that predict how people react.

Question 16

If a company uses AI to analyze consumer behavior and optimize prices, this is an example of:

Accepted Answer

Microeconomic analysis

Question 17

Which of the following is a real-world example of a negative incentive?

Accepted Answer

Getting a penalty for late payment

Question 18

Which of the following best describes the economic way of thinking?

Accepted Answer

A framework for analyzing solutions to economic problems in all areas of life

Question 19

Which of the following is an aggregate that macroeconomics would study?

Accepted Answer

Total output in an economy

Question 20

If a central bank uses AI to study GDP, inflation, and employment trends, this is an example of:

Accepted Answer

Macroeconomic analysis

Chapter 1: The Nature of Economic Analysis (Canadian Perspective Macroeconomics)

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