Economics: Canada in the Global Environment, Chapter 1: What Is Economics?

The flashcards cover key terms and concepts from Chapter 1 on what Economics is, including definitions, concepts related to micro and macroeconomics, and important principles regarding opportunity cost, scarcity, and economic models.

1) In a world characterized by scarcity A) all goods are free. B) opportunity cost is zero. C) we are not limited by time. D) individuals need not work to obtain goods. E) people must make choices among alternatives.

E

2) Which of the following is the best definition of economics? A) the study of how a provincial government allocates tax dollars B) the study of how consumers spend their income C) the study of how producers decide what inputs to hire and what outputs to produce D) the study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices E) the study of how consumers and producers meet each other at the market

D

3) Which of the following is a microeconomic topic? A) the reasons why a consumer buys less honey B) the reasons why the average price level in a country falls C) the cause of increasing unemployment D) the effect of the government budget deficit on inflation E) the reasons why the labour force in a country decreases

A

4) The study of how wages are set for New Brunswick teachers is classified as A) a macroeconomic topic. B) a microeconomic topic. C) economics of social interest. D) economics of private interest. E) normative economics.

B

5) Which of the following newspaper headlines concerns a macroeconomic issue? A) Why are people buying more SUVs and fewer minivans? B) How would a tax on e-commerce affect chapters.indigo.ca? C) How would an unexpected freeze in Oxford, Nova Scotia change the price of blueberries in the Maritimes? D) Why is Japan's economy stagnant? E) Why do grain producers purchase less pesticides?

D

6) The branch of economics that studies the choices of individuals and businesses is A) macroeconomics. B) microeconomics. C) positive economics. D) normative economics. E) social economics.

B

7) Each of the following would be considered a macroeconomic topic except A) the reasons for a decrease in the unemployment rate. B) the cause of recessions. C) the effect of the government budget deficit on inflation. D) the determination of aggregate income. E) the selection of production techniques.

E

8) Complete the following sentence. Macroeconomics A) is primarily concerned with the operation of individual markets in the economy. B) deals mainly with the economic behaviour of households. C) is the only part of economics to deal with government decisions. D) is primarily concerned with the behaviour of the stock market. E) is the study of the performance national economy and the global economy.

E

9) The determination of prices in individual markets is primarily a concern of A) positive economics. B) negative economics. C) macroeconomics. D) microeconomics. E) descriptive economics.

D

10) Which one of the following topics does macroeconomics study? A) decisions of individual firms B) effects of government safety regulations on the price of cars C) the performance of the global economy D) prices of individual goods and services E) effects of taxes on the price of gasoline

C

11) Which one of the following topics does microeconomics study? A) reasons for a fall in the price of orange juice B) the effect of a rise in the Canadian dollar on Canada's exports C) effect of interest rates on national economic growth D) effect of the government budget deficit on employment E) determination of total production in a country

A

12) Complete the following sentence. Microeconomics is A) not concerned with factors of production. B) concerned with normative issues only. C) concerned with the size of the total amount of income earned by all households in an economy. D) the branch of economics that studies the choices of individuals and businesses. E) concerned exclusively with the role of the government in the economy.

D

13) Which of the following would be considered a microeconomic topic? A) the severity of a recession B) the cause of unemployment in the economy C) the effect of the government budget deficit on inflation D) the determination of aggregate income E) the study of how wages are set for mine workers

E

14) The branch of economics that studies the performance of the national economy and the global economy is A) macroeconomics. B) microeconomics. C) Keynesian economics. D) positive economics. E) normative economics.

A

15) The fact that human wants cannot be fully satisfied with available resources is called the problem of A) opportunity cost. B) scarcity. C) normative economics. D) marginal cost. E) the big tradeoff.

B

16) The problem of scarcity exists A) only in economies that lack incentives. B) only in economies that have incentives. C) in all economies. D) only when people are unemployed. E) now but will be eliminated with economic growth.

C

17) The inescapable economic fact is that A) there are unlimited wants and limited resources. B) there are unlimited resources, and we just have to decide how to allocate them. C) capitalists are always exploiting the workers. D) unions are always exploiting firms. E) capitalists and unions cannot work together.

A

18) An incentive A) could be a reward but could not be a penalty. B) could be a penalty but could not be a reward. C) could be either a reward or a penalty. D) is the opposite of a tradeoff. E) occurs in the macroeconomy but not in the microeconomy.

C

19) Scarcity confronts A) neither the poor nor the rich. B) the rich but not the poor. C) the poor but not the rich. D) the rich and the poor. E) families with incomes less than $25,000 a year.

D

20) The problem of scarcity applies A) to all countries, regardless of their level of development. B) only in industrially developed countries because resources are scarce in these countries. C) only in developing countries because resources are scarce in these countries D) only in countries that are over-populated E) only in countries that use natural resources in most of their production processes

A

21) Which of the following statements is correct? A) Canada produces more manufactured goods than services. B) Canada produces more agricultural goods than services. C) Canada produces more services than goods. D) The percentage of the Canadian population that produces goods is greater than the percentage of the Chinese population that produces goods. E) Canada produces more agricultural goods than manufactured goods.

C