Question 1

Which of the following best describes the concept of scarcity in economics?

Accepted Answer

Scarcity refers to the inability to satisfy all our wants due to limited resources.

Question 2

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

Accepted Answer

Why are people buying more e-books and fewer hard copy books?

Question 3

In economics, what is an incentive?

Accepted Answer

A reward that encourages an action or a penalty that discourages an action.

Question 4

Which factor of production is described as the 'gifts of nature' used to produce goods and services?

Accepted Answer

Land

Question 5

If a student spends an evening studying instead of going to a concert, what is the opportunity cost?

Accepted Answer

The highest-valued alternative forgone, which is attending the concert.

Question 6

Which income is earned by the factor of production 'capital'?

Accepted Answer

Interest

Question 7

Resource use is considered efficient if:

Accepted Answer

It is not possible to make someone better off without making someone else worse off.

Question 8

Which of the following best illustrates a choice made at the margin?

Accepted Answer

Choosing to study for 30 more minutes instead of messaging friends.

Question 9

Suppose the marginal benefit of an additional hour of work is $$20 and the marginal cost is 15. $$According to rational choice theory, what should the individual do?

Accepted Answer

Work the additional hour because $$20 \u003e 15.$$

Question 10

Which statement is a positive statement in economics?

Accepted Answer

"Increasing the minimum wage will lead to higher unemployment among youth."

Question 11

Globalization is in the self-interest of which group according to the study materials?

Accepted Answer

Consumers who buy low-cost imported goods and services.

Question 12

Which of the following is NOT one of the four main factors of production?

Accepted Answer

Technology

Question 13

A rational choice is defined as:

Accepted Answer

A choice that compares costs and benefits and achieves the greatest benefit over cost for the person making the choice.

Question 14

Which of the following best describes the role of economists as policy advisers?

Accepted Answer

They use economics to compare marginal benefits and marginal costs for a given goal.

Question 15

Which skill is NOT listed as essential for economics jobs?

Accepted Answer

Physical strength

Question 16

If the opportunity cost of attending a concert is the value of the best alternative use of your time and money, which formula best represents opportunity cost?

Accepted Answer

$$Opportunity\ Cost = Value\ of\ Best\ Alternative\ Forgone$$

Question 17

Which of the following is a normative statement?

Accepted Answer

"Canada should increase spending on healthcare."

Question 18

Which of the following scenarios best illustrates a tradeoff?

Accepted Answer

A student chooses to study for an exam instead of going out with friends.

Question 19

Suppose a firm faces the following marginal benefit and marginal cost functions: $$MB = 100 - 2Q$$ and $$MC = 20 + Q$$, where $$Q is $$the quantity of goods produced. What is the optimal quantity $$Q^*$$ where $$MB = MC$$?

Accepted Answer

$$Q^* = 26.67$$

Question 20

Which of the following is a real-world example of tension between self-interest and social interest?

Accepted Answer

A multinational firm relocating production to a low-cost country, affecting local jobs.

Chapter 1: What Is Economics? (Microeconomics: Canada in the Global Environment)

Study Guide - Practice Questions

Study Guide - Flashcards