Question 20

A provincial government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price elasticity of demand is:

Question 20 options:

	unity
	greater than one
	less than one
	infinity Topic: Revenue Test of Elasticity

Question 21(1 point)

In a world characterized by scarcity

Question 21 options:

	resources are unlimited
	opportunity cost is zero
	we are not limited by time
	people must make choices among alternatives Topic: Spending public money

Question 23(1 point)

A surplus of any given commodity can be expected whenever the:

Question 23 options:

	prevailing price of the good is below the equilibrium price
	prevailing price of the good is above the equilibrium price
	prevailing price of the good is equal to the equilibrium price
	None of the above Topic: Price Elasticity

Question 25(1 point)

When the Federal government chooses to build an entertainment district, the required resources are not available for spending on public hospitals. The dilemma illustrates the concept of

Question 25 options:

	Marginal analysis
	economic perspective
	opportunity cost
	None of the above Topic: Meaning of capital

Question 26(1 point)

Which of the following is not correctabout externalities?

Question 26 options:

	Externalities occur when producing or consuming a good causes an impact on third parties not directly related to the transaction.
	Making furniture by cutting down rainforest leads to negative externalities to other people in the neighboring area.
	A farmer who grows apple trees makes positive externality as he provides nectar for a nearby bee keeper who gains increased honey as a result of the farmer's orchard.
	Markets function efficiently when externalities are present.

Question 27(1 point)

"If the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower." This statement describes:

Question 27 options:

	an inferior good
	the rationing function of prices
	the substitution effect
	the income effect Topic: Shift in demand

Question 28(1 point)

The term physical capital

Question 28 options:

	refers to funds used by businesses to acquire goods and services
	refers to equipment and machinery used in production
	refers to the process of raising funds through the stock market
	defines the stock of merchandise already produced Topic: Macroeconomics versus Microeconomics

Question 29(1 point)

A demand curve which is parallel to the horizontal axis is:

Question 29 options:

	perfectly inelastic
	perfectly elastic
	relatively inelastic
	relatively elastic Topic: Elasticity and Revenue

Question 30(1 point)

The demand curve for a product might shift as the result of a change in:

Question 30 options:

	consumer tastes
	consumer incomes
	the prices of related goods
	all of the above Topic: Normal good 19 . A normal good is one: A) which all people like B) which all normal people like C) for which demand increases when price decreases *D) for which demand increases when income increases Topic: Relationship between goods

Question 31(1 point)

Price elasticity of demand is greater, the larger the number of substitutes available

Question 31 options:

	True
	False

Question 32(1 point)

When a farmer decides to harvest tomatoes using machines instead of migrant workers, the farmer is answering the question.

Question 32 options:

	"what"
	"how"
	"who"
	"where" Topic: Market System

Question 33(1 point)

Assumethat a fungus has infested the coffee beans sothat morethan half of the coffee bean harvest could not be used for coffee making in coffee shops. What will be the impact of this on the market for coffee at coffee bars such as Tim Hortons, Starbucks and Second Cup?

tea leaves

Question 33 options:

	The demand curvewill shift to the left.
	The demand curve will shift to the right.
	The supply curve will shift to the right.
	The supply curve will shift to the left.

Question 34(1 point)

Which one of the following concepts is illustrated by a production possibilities frontier?

Question 34 options:

	barter exchange system between a seller and a buyer
	the tradeoff between producing one good versus another
	current consumption level versus current level of investment
	investment activity in the economy
	monetary exchange Topic: Shape of PPP

Question 35(1 point)

If the price elasticity of demand for gasoline is -2:

Question 35 options:

	the demand for gasoline is linear
	a rise in the price of gasoline will reduce total revenue
	a 10 percent rise in the price of gasoline will decrease the amount purchased by 20 percent
	a 10 percent fall in the price of gasoline will increase the amount purchased by 20 percent Topic: Demand and Elasticity

Question 36(1 point)

Assume that Ontario has experienced an extremelycloudy andwet spring and summer 2017 which set records with respect to total rain. What will be the impact in October on the market for corn grown in Ontario?

Question 36 options:

	The demand curve will shift to theright.
	The demand curve will shift to the left.
	The supply curve will shift to the right.
	The supply curve will shift to the left.

Question 37(1 point)

Statements about "what ought to be" are called

Question 37 options:

	positive statements
	normative statements
	economic statements
	scientific statements Topic: Economic Principles

Question 38(1 point)

If the income elasticity of demand for margarine (vegetable based fat)is -3.00, this means that:

Question 38 options:

	as income increases people buy moremargarineas it is a luxury good
	margarine is a normal good
	margarine is an inferior good
	more margarine will be purchased when its price rises Topic : Consumer Surplus

Question 39(1 point)

What will be the impact on the market for corn at harvest time if the price of gasoline used to power farm machinery and the price offertilizer used to grow corn has increased by 75%?

Question 39 options:

	The demand curve will shift to the left.
	The supply curve will shift to the left.
	The demand curve will shift to the right.
	The supply curve will shift to the right.

Question 40(1 point)

The "invisible hand" concept suggests that:

Question 40 options:

	market failures imply the need for a national economic plan
	big businesses are inherently more efficient than small businesses
	The prices that consumer express in the market are invisible to producers
	given competition, private and public interests will tend to coincide Topic: Demand curve

Question 41(1 point)

If the percentage change in quantity demanded is 50% and the percentage change in price is 25%, then which of the following is (are) correct

Question 41 options:

	Price elasticity of demand is 2
	Price elasticity of demand is elastic
	Cross price elasticity is one-half
	Both A and B are correct Topic: Cross price elasticity

Question 42(1 point)

The magazines and newspaper articles about the benefits of eating increased amounts of yogurt to helpthe digestive system by increasing the amount of probiotics. What will be the impactof these reports on the market for yogurt and cheese?

Question 42 options:

	The demand line will shift to the left
	The demand line will shift to the right.
	The supply line will shift to the left.
	The supply line will shift to the right.

Question 43(1 point)

Which of the following is (are) associated with macroeconomics?

Question 43 options:

	the annual financial statement for a specific company, such as Apple Computers
	an empirical investigation of the general price level and unemployment rates in the 1990s
	a study of Canada's key economic healthindicators such as GDP, unemployment rate and inflation rate
	both b and c above Topic: Making statements