Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
Chapter 1 What Is Economics?
1.1 Definition of Economics
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.
Answer: E
Diff: 1 Type: MC
Topic: Definition of Economics
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
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
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
Answer: A
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
,Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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?
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 2 Type: MC
Topic: Definition of Economics
,Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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
Answer: C
Diff: 2 Type: MC
Topic: Definition of Economics
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
Answer: A
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 2 Type: MC
Topic: Definition of Economics
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
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: A
Diff: 1 Type: MC
Topic: Definition of Economics
, Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: C
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: A
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: C
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
Bade (All Chapters Download Link at the end of this file)
Chapter 1 What Is Economics?
1.1 Definition of Economics
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.
Answer: E
Diff: 1 Type: MC
Topic: Definition of Economics
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
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
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
Answer: A
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
,Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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?
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 2 Type: MC
Topic: Definition of Economics
,Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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
Answer: C
Diff: 2 Type: MC
Topic: Definition of Economics
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
Answer: A
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 2 Type: MC
Topic: Definition of Economics
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
Answer: E
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: A
Diff: 1 Type: MC
Topic: Definition of Economics
, Test Bank for Microeconomics Canada in the Global Environment 9e Michael Parkin, Robin
Bade (All Chapters Download Link at the end of this file)
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.
Answer: B
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: C
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: A
Diff: 2 Type: MC
Topic: Definition of Economics
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.
Answer: C
Diff: 1 Type: MC
Topic: Definition of Economics
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.
Answer: D
Diff: 1 Type: MC
Topic: Definition of Economics
