Study Guides (238,107)
Canada (114,926)
Economics (379)
ECON 102 (105)

Econ102 Midterm 1 Package.doc

9 Pages
Unlock Document

University of Waterloo
ECON 102
Maryann Vaughan

CHAPTER 1: TEN PRINCIPLES OF ECONOMICS Multiple Choice Identify the choice that best completes the statement or answers the question. 1. For most students, the largest single cost of a college education is a. the income given up to attend school. b. the cost of tuition, fees, and books. c. the cost of room and board. d. transportation, parking, and entertainment. 2. One effect of a government-imposed seat belt law has been a. a reduction in the number of pedestrian deaths. b. safer driving practices. c. an increase in the number of accidents. d. a decrease in the number of accidents. 3. Benefits from trade would NOT include a. the ability to specialize. b. an increase in the variety of goods and services available. c. reduced competition. d. lower prices. 4. In a market economy, economic activity is guided by a. consumers that only buy what they want. b. businesses that control production. c. central planners in government agencies. d. prices as incentives to both buyers and sellers. 5. The income of a typical worker in Canada is most closely linked to which of the following? a. our population b. the productivity of our workforce c. the number of labor unions d. government policies 6. The value or cost of a good or service that is given up by choosing one alternative over another is called a. an explicit cost b. an opportunity cost c. a historical cost d. an accounting cost 7. Government regulation of the economy may not be beneficial because of a. special-interest groups b. an imperfect political process c. insufficient information among policy-holders d. all of the above 8. Scarcity arises because of a. a finite amount of resources b. Poverty c. too little money in an economy d. all of the above 9. Market failure means that a. the market fails to allocate resources efficiently b. people fail to know what they like c. the government fails to provide the goods and services voters want d. producers fail to earn high profits 1. A 2. C 3. C 4. D 5. B 6. B 7. D 8. A 9. A 10. A 11. C 12. C 13. D 14. C CHAPTER 2: THINKING LIKE AN ECONOMIST Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Economists often substitute for laboratory experiments by using a. natural experiments offered by history. b. computer-generated experiments and simulations. c. studies conducted by sociologists and other behavioural scientists. d. All of the above. 2. In the circular-flow 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. 3. If an economy is producing efficiently 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 the other. d. more of a good cannot be produced. 4. You know an economist has crossed the line from scientist to policy adviser when he or she a. explains just the facts. b. makes positive statements. c. can't reach a conclusion. d. makes normative statements. 5. Almost all economists agree that rent control programs a. improve the availability and quality of rental accommodation. b. increase the efficiency of the housing market. c. reduce the availability and quality of rental housing. d. is a very inexpensive way to help the most needy members of society. 6. Which statement best illustrates the concept of positive 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 inflation should be lowered. 7. An economic model is a. designed to be as confusing as possible b. better the more complex it is c. designed to simplify reality d. a device that economists use to ensure that the general public does not understand basic economic issues 8. Microeconomics is the study of a. how households and firms make decisions and how they interact in the market b. economy-wide phenomena c. inflation, unemployment, and economic growth d. the impact of government actions on the economy 9. A production possibilities frontier shows a. the prices at which alternative goods will be produced b. the input combinations 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 combinations of two goods a country can produce given the available factors of production and the available production technology 10.Which of the following would be of concern to a microeconomist? CHAPTER 5: MEASURING A NATION’S INCOME Multiple Choice Identify the choice that best completes the statement or answers the question. 1. When GDP falls, a. income and expenditure must both fall. b. income and expenditure can both rise. c. income must fall, but expenditure may rise or fall. d. expenditure must fall, but income may rise or fall. 2. Income equals expenditure because a. firms always pay out all their revenue as income to someone. b. each time a sale is made, there is a buyer and a seller. c. households own the factors of production used to generate incomes. d. All of the above are correct. 3. If a province makes the production and sale of illicit drugs legal, then GDP a. must increase. b. must decrease. c. wouldn't change. d. may increase or decrease. 4. When a government provides su
More Less

Related notes for ECON 102

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.