CHAPTER 1: TEN PRINCIPLES OF ECONOMICS
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
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
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
CHAPTER 2: THINKING LIKE AN ECONOMIST