2,
exercises
Ques1on
1:
Which
of
the
following
do
economists
o=en
use
as
a
subs1tute
for
laboratory
experiments?
a.
natural
experiments
oered
by
history
b.
eld-generated
experiments
and
simula1ons
c.
studies
conducted
by
biologists
and
physicists
d.
assump1ons
and
predic1ons
Ques1on
2:
Which
of
the
following
statements
is
most
relevant
to
the
circular-ow
diagram?
a.
Households
are
sellers
in
the
resource
market
and
the
product
market.
b.
Firms
are
buyers
in
the
product
market.
c.
Households
are
sellers
in
the
resource
market.
d.
Firms
are
sellers
in
the
resource
market.
Ques1on
3:
Which
of
the
following
statements
is
most
relevant
to
an
economy
that
is
producing
eciently?
a. In
order
to
produce
more
of
one
good,
less
of
another
good
can
be
produced.
b. More
of
both
goods
can
be
produced.
c. It
is
possible
to
produce
more
of
one
good
without
producing
less
of
another.
d. More
of
a
good
cannot
be
produced.
Ques1on
4:
Which
of
the
following
is
an
example
of
an
economist
ac1ng
as
a
policy
adviser
rather
than
a
scien1st?
a.
explaining
just
the
facts
b.
making
posi1ve
statements
c.
being
unable
to
reach
a
conclusion
d.
making
norma1ve
statements
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
5:
According
to
most
economists,
which
of
the
following
is
the
eect
of
rent
control
programs?
a.
improvement
in
the
availability
and
quality
of
rental
accommoda1on
b.
increase
in
the
eciency
of
the
housing
market
c.
reduc1on
of
the
availability
and
quality
of
rental
housing
d.
help
the
most
needy
members
of
society
very
inexpensively
Ques1on
6:
Which
of
the
following
statements
best
illustrates
the
concept
of
posi1ve
economics?
a. When
the
money
supply
grows
at
a
faster
rate,
the
average
price
level
will
rise.
b. A
system
of
wage
subsidies
should
be
used
to
reduce
poverty.
c. The
economy
should
grow
at
a
faster
rate.
d. The
rate
of
ina1on
should
be
lowered.
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
7:
Which
of
the
following
best
describes
an
economic
model?
a.
as
confusing
as
possible
b.
as
complex
as
possible
c.
a
simplica1on
of
reality
d.
designed
for
the
general
public
Ques1on
8:
Which
of
the
following
best
describes
the
primary
study
of
microeconomics?
a. how
households
and
rms
make
decisions,
and
how
they
interact
in
the
market
b. economy-wide
phenomena
c. ina1on,
unemployment,
and
economic
growth
d. the
impact
of
government
ac1ons
on
the
economy
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
9:
What
kind
of
informa1on
does
a
produc1on
possibili1es
fron1er
illustrate?
a. the
prices
at
which
alterna1ve
goods
will
be
produced
b. the
input
combina1ons
that
allow
a
country
to
produce
a
given
amount
of
output
c. the
tax
revenue
a
government
receives
at
various
tax
rates
d. the
various
combina1ons
of
two
goods
a
country
can
produce
given
the
available
factors
of
produc1on
and
the
available
produc1on
technology
Ques1on
10:
Which
of
the
following
would
be
of
concern
to
a
microeconomist?
a. The
na1on's
unemployment
rate
is
higher
today
than
in
the
past.
b. The
unemployment
rate
is
higher
in
Canada
than
in
Mexico.
c. The
rate
of
economic
growth
will
increase
in
the
future.
d. Import
restric1ons
on
sugar
will
raise
the
price
of
sugar.
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
11:
Which
of
the
following
best
explains
the
curved
shape
of
the
produc1on
possibili1es
fron1er?
a. the
fact
that
some
resources
are
be^er
suited
for
some
types
of
produc1on
than
are
other
resources
b. constant
cost
produc1on
c. scarcity
d. economic
growth
Ques1on
12:
Which
of
the
following
is
a
common
source
of
disagreement
among
economists?
a.
the
lack
of
fads
in
economics
b.
the
lack
of
dierences
in
values
c.
dierences
in
scien1c
judgments
d.
percep1ons
of
reality
are
always
correct
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
13:
What
kind
of
statements
does
posi1ve
economics
deal
with
exclusively?
a.
statements
that
favourably
describe
a
situa1on
b.
statements
that
pertain
to
facts
c.
statements
that
describe
the
past
d.
statements
that
are
always
true
Ques1on
14:
According
to
the
text,
what
are
assump1ons
used
for
in
economics?
a.
to
make
all
economic
predic1ons
relevant
b.
to
make
all
economic
predic1ons
irrelevant
c.
to
make
the
world
easier
to
understand
d.
to
shi=
the
blame
to
someone
else
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
15:
Which
of
the
following
is
part
of
the
scien1c
method?
a.
recommending
policies
to
improve
economic
outcomes
b.
using
assump1ons
in
model
building
c.
developing
theories,
gathering
data,
and
determining
whether
the
theories
are
consistent
with
the
data
d.
paying
close
a^en1on
to
the
natural
experiments
oered
by
history
Ques1on
16:
The
circular-ow
diagram
is
a
visual
model
of
how
the
government
directs
and
controls
the
economy
of
a
na1on.
True
False
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
17:
In
the
market
for
factors
of
produc1on,
households
buy
factors
of
produc1on,
and
rms
sell
factors
of
produc1on.
True
False
Ques1on
18:
Macroeconomics
is
the
study
of
economy-wide
phenomena,
including
ina1on,
unemployment,
and
economic
growth.
True
False
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
19:
A
norma1ve
statement
describes
how
the
world
ought
to
be.
True
False
Ques1on
20:
When
economists
try
to
predict
the
number
of
workers
a
rm
will
employ,
they
are
involved
in
macroeconomics.
True
False
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
21:
Answer
the
following
ques1ons
based
on
the
informa1on
in
the
table
below
for
the
economy
of
a
country
in
a
given
year.
All
gures
are
in
millions.
Combina1ons(points)
Computers(per
year)
Grain(tonnes
per
year)
A
16
0
B
14
4
C
12
7
D
9
10
E
5
12
F
0
13
a.
If
this
economy
is
producing
at
point
C,
what
is
the
opportunity
cost
of
moving
to
point
B?
b.
Supposing
this
economy
is
currently
producing
5
million
computers
and
10
million
tonnes
of
grain,
would
this
be
ecient?
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
22:
What
is
the
slope
of
a
line?
Ques1on
23:
Use
the
data
below
to
answer
the
ques1ons
that
follow:
Y
X
8
10
6
20
4
30
2
40
a.
Calculate
the
slope
for
every
change
in
the
Y
and
X
variables.
b.
What
type
of
rela1onship
is
there
between
these
two
variables?
Copyright
2014
by
Nelson
Educa1on
Ltd.
Ques1on
24:
What
is
an
economic
model?
Ques1on
25:
What
is
the
circular-ow
diagram?
Copyright
2014
by
Nelson
Educa1on
Ltd.