BUAD 113: Economics – Flashcards

The economic problem is essentially one of deciding how to make the best use of: Select one: a. unlimited resources to satisfy unlimited wants b. limited resources to satisfy unlimited wants c. unlimited resources to satisfy limited wants d. limited resources to satisfy limited wants e. free resources to satisfy expensive wants

Economists assume that people customarily behave rationally, meaning that people: Select one: a. virtually always weigh the personal benefits and costs of every available action and choose an action on the basis of their individual wants b. act in a rational way when buying and selling products, but not in other settings c. act rationally when they buy products, but not when they sell them d. act rationally when they sell products, but not when they buy them e. are unable to act in an irrational way

Because of scarcity, the efficient use of resources is: Select one: a. an important economic goal in all economies b. an important economic goal only in command economies c. an important economic goal only in market economies d. not an important economic goal e. an important economic goal only in traditional economies

Stocks and bonds are not considered to be an economic resource because they: Select one: a. sometimes fall in value b. do not earn interest income c. are available in unlimited quantities d. are not free gifts of nature e. do not add to the economy's stock of real capital

The money payments made to owners of human resources are: Select one: a. wages, salaries, or interest b. wages, salaries, or rent c. interest or profit d. wages, salaries, or profit e. rent or profit

Which of the following is a capital resource? Select one: a. a pair of stockings b. a dump truck c. a savings account d. a share of IBM stock e. a Bell Canada bond

Which of the following is a microeconomic statement? Select one: a. Total economic output increased by 2.5 percent last year. b. Unemployment was 9.8 percent of the labour force last year. c. The price of wheat declined last year. d. The general price level increased by 4 percent last year. e. Business investment decreased by 2 percent last year.

Macroeconomics approaches the study of economics from the viewpoint of: Select one: a. individual producers b. governmental units c. specific product and resource markets d. individual consumers e. entire economic sectors

Economic models: Select one: a. are useless because they are not based upon laboratory experiments b. deal with a multitude of details c. are generalizations of economic reality d. are abstractions of reality and are, therefore, of no use to economists e. are more effective the more complex they are

Which of the following is a correct statement? Select one: a. Economics is concerned only with explaining the way that economies actually operate and not with how they should operate. b. Though not quantitatively exact, economic laws are useful because they allow us to predict and, therefore, to control or to adjust to events. c. Economics is as scientific as physics and chemistry because economic laws are as quantitatively precise as the laws of physics or chemistry. d. Because economics is concerned with questions of "ought," it is a branch of applied ethics and not scientific. e. Economics is concerned with how economies should operate and not with how they do operate.

Ceteris paribus means that: Select one: a. if event A precedes event B, A has caused B b. economics deals with facts, not values c. if event A happens then event B cannot happen d. prosperity inevitably follows recession e. all other things remain the same

The basic purpose of the ceteris paribus assumption is to: Select one: a. isolate the relationship between two variables by assuming all other factors remain constant b. allow one to focus upon micro variables by ignoring macro variables c. allow one to focus upon macro variables by ignoring micro variables d. determine whether x causes y or vice versa e. determine whether two variables are directly or inversely related

Which of the following is a positive statement? Select one: a. The humidity is too high today. b. It is too hot to jog today. c. The temperature is 22°C. d. I enjoy summer evenings when it cools off. e. I dislike humid nights.

Which of the following is a normative statement? Select one: a. The temperature is high today. b. The humidity is high today. c. It is too hot to play tennis today. d. It will cool off later this evening. e. I think it will be hot today.

Utility refers to the: Select one: a. extent to which a product can be used as a capital resource b. opportunity cost of a product c. relative scarcity of a product d. usefulness of a product e. satisfaction that a consumer derives from a good or service

Which of the following expressions best states the idea of opportunity cost? Select one: a. "A penny saved is a penny earned." b. "He who hesitates is lost." c. "There is no such thing as a free lunch." d. "All that glitters is not gold." e. "Watch the pennies, and the pounds will look after themselves."

The production possibilities curve illustrates the basic principle that: Select one: a. the production of more of any one item will in time require smaller and smaller sacrifices of other items b. an economy automatically seeks that level of output that employs all of its resources c. if all the resources of an economy are fully used, more of one item could be produced only if less of another item is produced d. any production point below the curve reflects high opportunity cost e. any production point above the curve reflects low opportunity cost

Modern mixed economy refers to an economy: Select one: a. with both product and resource markets b. that engages in both domestic and international trade c. with both private and public sectors d. that functions primarily on the basis of custom and tradition e. that operates on the basis of central planning

The unemployment rate includes: Select one: a. pensioners b. homemakers c. brewery workers who have been laid off recently d. students working part-time at a grocery store e. young children

The Kyoto Protocol: Select one: a. aims to increase emissions of so-called greenhouse gases, in particular carbon dioxide b. was signed by over 170 countries, including Canada c. ensures that all countries in the world cut greenhouse gases until 2012 d. requirements will be met by Canada, but by few other countries e. imposes a global carbon tax

Laissez-faire suggests that: Select one: a. land and other natural resources should be privately owned but capital should be owned by the government b. land and other natural resources should be owned by the government but capital should be privately owned c. government should not interfere with the operation of the economy d. government action is necessary if the economy is to achieve full employment e. government policies are needed to deal with environmental damage