Question 1.

Economists assume that "people customarily engage in rational behaviour".

1. Define what is meant by rational behaviour (.5 mark)
2. Why have consumers have exhibited "irrational" behaviour during the pandemic. (2 marks)

Question 2.

Sandra at the age of 21 decided to give up her full time job and go back to school. What economic risk(s) and what economic benefit (s) should she have considered in making this decision. (2 marks)

Question 3.

1. Define what a market economy is. ( .5 mark)
2. Is there any country that is a pure market economy? Why or why not? ( 2 marks

Question 4.

1. What is meant by "inelastic" demand? ( .5 mark)
2. At the onset of the pandemic did toilet paper exhibit inelastic demand? Why or why not? (1 marks)
3. Based on you r answer to c).....as grocery shopping returns to "normal", do you think toilet paper will continue to exhibit the same type of demand ( 1 marks)

Question 5.

1. When discussing production, there are 3 main sectors in an economy, state them. (.5 mark)
2. Which sector is the Canadian economy primarily based on and why? ( 1 marks)
3. Looking ahead a decade, will your answer to b) be the same? Why or why Not? ( 2 marks)

MCQ's on the next page

1. EACH MCQ is Worth .5

6. A product has utility if it: A.takes more and more resources to produce successive units of it B.can be produced in unlimited quantities C.satisfies consumer wants D.is useful E.is available in only limited quantities

7. The demand curve for chocolate shifts to the right if: A.the price of chocolate increases B.medical studies conclusively find that chocolate helps fight migraines C.consumers expect the price of chocolate to fall in the future D.the government imposes a new tax on milk E.the price of chocolate decreases

8.Digital music players and digital music are: A.free products B.substitute products C.independent products D.inferior products E.complementary products

9.The law of supply: A.reflects the amounts businesses will demand at each price in a series of prices B.is reflected in a downward-sloping supply curve C.shows that the relationship between price and quantity supplied is inverse D.reflects the amounts consumers will supply at each price in a series of prices E.reflects the direct relationship between price and quantity supplied, ceteris paribus

10.If a business can sell 3000 units of a product at $10 per unit and 5000 units at $8 per unit, its demand is: A.elastic B.perfectly elastic C.inelastic D.unit-elastic E.perfectly inelastic

11. Which of the following statements best expresses the law of diminishing marginal returns? A.Because large-scale production allows the realization of increasing returns to scale, the costs of production vary directly with the level of output. B.Population growth automatically adjusts to that level at which the average product per worker will be at a maximum. C.As successive amounts of one resource (labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline. D.The same percentage increase in all inputs will result in a lower percentage increase in total output. E.The same percentage increase in all inputs will result in a higher percentage increase in total output.

(2 Marks)

What major economic reason was involved in your decision to immigrate to Canada?