Question 1

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-Refer to Figure 1- 4.A shift of the production possibilities boundary from PPB1 to PPB2 implies

Accepted Answer

A shift from PPB1 to PPB2 implies an improvement in technology in the capital goods industry, which allows for more efficient and productive production of capital goods. This in turn increases the economy's capacity to produce both capital and consumer goods, resulting in a shift of the production possibilities boundary outward. Choices A, C, D, and E are incorrect because they do not accurately reflect the implications of a shift in the production possibilities boundary from PPB1 to PPB2.

Question 2

In general,which of the following statements is an accurate description of economists' assumptions about households? Households

Accepted Answer

Economists generally assume that households make consistent decisions, aim to maximize utility (satisfaction), and are the principal owners of the factors of production.

Question 3

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-Refer to Figure 1- 4.The production possibilities boundaries are drawn concave to the origin.What does this shape of the PPB demonstrate?

Accepted Answer

The concave shape of the PPB demonstrates increasing opportunity cost of producing more of either good. This means that as more of one good is produced, increasingly larger amounts of the other good must be given up.

Question 4

A farmer selling tomatoes and corn at a roadside,and a currency trader in Hong Kong,are each participating in

Accepted Answer

Both the farmer and the currency trader are participating in a market, where they are exchanging goods or services for money. The farmer is selling his tomatoes and corn at a roadside market, while the currency trader is participating in the foreign exchange market in Hong Kong.

Question 5

In a pure market economy,the role of government is limited to provision of : i)a basic legal and institutional structure.
Ii)intervention in the allocation of resources in some areas of the economy.
Iii)redistribution of income.
Iv)stabilization of economic conditions generally.
Which of the above points is true?

Accepted Answer

In a pure market economy, the government's role is primarily limited to providing a basic legal and institutional framework to allow the market to operate efficiently. Other roles like intervention in resource allocation, income redistribution, and economic stabilization are minimal or non-existent in a pure market setup.

Question 6

The table below illustrates that,in one day,Tristan can produce either 12 fishing lures or mow 3 lawns,while Thomas can produce either 6 fishing lures or mow 6 lawns. $$\begin{array} { | l | r | r | } 
\hline & \text { Fishing Lures } & \text { Mowed Lawns } \
\hline \text { Tristan } & 12 & 3 \
\hline \text { Thomas } & 6 & 6 \
\hline
\end{array}$$ TABLE 1- 1
-Refer to Table 1- 1.What is Thomas's opportunity cost of producing one mowed lawn?

Accepted Answer

Thomas's opportunity cost of producing one mowed lawn is one fishing lure because he can produce 6 fishing lures or mow 6 lawns in a day, so each lawn mowed costs him the production of one fishing lure.

Question 7

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-Refer to Figure 1- 4.If Country X is currently producing at point A,it could move to point B if

Accepted Answer

The answer of The diagram below shows two production possibilities...

Question 8

Economics can best be described as

Accepted Answer

Economics is concerned with the study of how individuals and societies allocate scarce resources among competing wants and needs. This involves understanding the production, distribution, and consumption of goods and services. The central problem of economics is scarcity, meaning that resources (such as land, labor, and capital) are limited in relation to the unlimited wants and needs of individuals and society as a whole. Therefore, economics is about making choices and trade-offs to maximize the benefits from the limited resources available.

Question 9

Madeleine allows herself $100 per month for purchasing coffee.The diagram below illustrates the choices available to her.
  FIGURE 1- 3
-Refer to Figure 1- 3.For Madeleine,the opportunity cost of one latte is

Accepted Answer

The opportunity cost of one latte is the value of the next best alternative given up, which is 4 regular coffees. Therefore, Madeleine should choose to purchase 4 regular coffees instead of one latte in order to maximize her coffee consumption within her budget.

Question 10

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination)for use in classrooms.
 
-Refer to Figure 1- 2.What is the price of a laptop computer in this example?

Accepted Answer

The answer of Figure 1- 2 With a budget of...

Question 11

The table below shows that,in one day,Claire can complete either 3 chemistry or 2 biology lab reports,while Sam can complete either 4 chemistry or 3 biology lab reports. $$\begin{array} { | l | c | l | } 
\hline & \text { Chemistry Lab Reports } & \text { Biology Lab Rep orts } \
\hline \text { Claire } & 3 & 2 \
\hline \text { Sam } & 4 & 3 \
\hline
\end{array}$$ TABLE 1- 2
-In practice,the term "centrally planned economy" refers to an economy in which

Accepted Answer

The answer of The table below shows that,in one day,Claire...

Question 12

An insight first fully developed by Adam Smith is that

Accepted Answer

Adam Smith believed that individuals pursuing their own self-interest in a free market system would lead to economic prosperity and growth. He argued that the pursuit of profit incentivized individuals to innovate, invest in capital, and produce goods and services demanded by consumers. This insight is known as the "invisible hand" and is a cornerstone of classical economics. However, Smith did not believe that individuals were solely motivated by self-interest and recognized the importance of benevolence and moral values in society.

Question 13

The table below shows that,in one day,Claire can complete either 3 chemistry or 2 biology lab reports,while Sam can complete either 4 chemistry or 3 biology lab reports. $$\begin{array} { | l | c | l | } 
\hline & \text { Chemistry Lab Reports } & \text { Biology Lab Rep orts } \
\hline \text { Claire } & 3 & 2 \
\hline \text { Sam } & 4 & 3 \
\hline
\end{array}$$ TABLE 1- 2
-Refer to Table 1- 2.What is Sam's opportunity cost of completing 1 chemistry lab report?

Accepted Answer

The answer of The table below shows that,in one day,Claire...

Question 14

FIGURE 1- 5 
-Refer to Figure 1- 5.Which production possibilities boundaries exhibit decreasing opportunity costs?

Accepted Answer

Boundary A only exhibits decreasing opportunity costs, which is typically represented by a concave shape towards the origin in a production possibilities boundary.

Question 15

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-In recent years,several large Canadian- owned mining and resource companies have been sold to foreign owners.The immediate effect on Canada's production possibilities boundary is

Accepted Answer

The sale of Canadian-owned companies to foreign owners does not directly affect the country's production capacity or resources, so the production possibilities boundary remains unchanged.

Question 16

Which of the following represents a typical "real" flow (as opposed to a financial flow)in the circular flow of income?

Accepted Answer

A typical "real" flow in the circular flow of income refers to the flow of goods and services between the households (consumers) and firms (producers). Therefore, goods going from producers to consumers represent a typical "real" flow.

Question 17

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination)for use in classrooms.
 
-Refer to Figure 1- 2.For the school board,what is the opportunity cost of one additional laptop computer?

Accepted Answer

The opportunity cost of one additional laptop computer is the number of textbooks that could have been purchased instead. Since the school board can choose to purchase either 20,000 textbooks or 2,000 laptop computers, the opportunity cost of one additional laptop computer is 10 textbooks (20,000 textbooks divided by 2,000 laptops). Therefore, the best choice for the school board depends on their priorities and needs in the classroom. If they value having modern technology, they may choose to purchase more laptops, but if they prioritize having enough textbooks for every student, they may choose to purchase more textbooks instead.

Question 18

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination)for use in classrooms.
 
-The key decision makers in a market economy are

Accepted Answer

The key decision makers in a market economy are households, firms, and government. In this scenario, the school board must decide between purchasing textbooks or laptops for use in classrooms. This decision will ultimately be made by the school board, which is a government entity. However, the decision is based on the needs and preferences of the households (students and teachers) and the costs and benefits of each option for the school board (a firm). Therefore, the best choice is E.

Question 19

Consider Canada's production possibilities boundary.Suppose a scientific breakthrough leads to a lower- cost method of producing battery- operated cars in Canada.The likely effect would be to move Canada's current production

Accepted Answer

The scientific breakthrough leading to a lower-cost method of producing battery-operated cars will increase Canada's efficiency in production and increase the potential output. This will result in a shift in Canada's production possibilities boundary outward. This means that Canada can now produce more goods and services than before the breakthrough, including battery-operated cars, without requiring additional resources or an increase in technology. Therefore, Canada's production possibilities boundary will shift outward.

Question 20

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-Comparison of economic systems indicates that

Accepted Answer

The diagram does not provide enough information to determine the economic system of Country X, but it does suggest that the country has the ability to produce a variety of goods and services, indicating a mixed economy. The other answer choices are not supported by the information provided in the diagram.

Quiz 1: Economic Issues and Concepts

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 4 -Refer to Figure 1- 4.A shift of the production possibilities boundary from PPB1 to PPB2 implies

In general,which of the following statements is an accurate description of economists' assumptions about households? Households

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 4 -Refer to Figure 1- 4.The production possibilities boundaries are drawn concave to the origin.What does this shape of the PPB demonstrate?

A farmer selling tomatoes and corn at a roadside,and a currency trader in Hong Kong,are each participating in

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 4 -Refer to Figure 1- 4.If Country X is currently producing at point A,it could move to point B if

Economics can best be described as

Madeleine allows herself $100 per month for purchasing coffee.The diagram below illustrates the choices available to her. FIGURE 1- 3 -Refer to Figure 1- 3.For Madeleine,the opportunity cost of one latte is

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination) for use in classrooms. -Refer to Figure 1- 2.What is the price of a laptop computer in this example?

An insight first fully developed by Adam Smith is that

FIGURE 1- 5 -Refer to Figure 1- 5.Which production possibilities boundaries exhibit decreasing opportunity costs?

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 4 -In recent years,several large Canadian- owned mining and resource companies have been sold to foreign owners.The immediate effect on Canada's production possibilities boundary is

Which of the following represents a typical "real" flow (as opposed to a financial flow) in the circular flow of income?

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination) for use in classrooms. -Refer to Figure 1- 2.For the school board,what is the opportunity cost of one additional laptop computer?

Figure 1- 2 With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination) for use in classrooms. -The key decision makers in a market economy are

Consider Canada's production possibilities boundary.Suppose a scientific breakthrough leads to a lower- cost method of producing battery- operated cars in Canada.The likely effect would be to move Canada's current production

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 4 -Comparison of economic systems indicates that