1. Suppose Doug doubles the number of workers, the amount of ingredients and all the other inputs he uses to make donuts. If the number of donuts produced in his donut shop goes up by 80%, which of the following best describes his production function?

Select one:

a. it has decreasing returns to scale

b. it does not have returns to scale

c. it has increasing returns to scale

d. it has constant returns to scale

2)Suppose the price of a box of donuts rises from $10.00 to $11.00 and the price of a packet of cookies rises from $2.00 to $2.50. If the Consumer Price Index (CPI) rises from 100 to 120, what will people likely buy?

Select one:

a. more donuts and fewer cookies

b. fewer donuts and more cookies

c. more donuts and more cookies

d. fewer donuts and fewer cookies

3) As a result of measures of offset the economic impact of the Covid-19 pandemic, the Canadian government has gone from a surplus to a deficit. Assuming other things remain the same, what does this change mean?

Select one:

a. that the demand for loanable funds shifted inwards

b. that the supply of loanable funds shifted inwards

c. that the demand for loanable funds shifted outwards

d. that the supply of loanable funds shifted outwards

4) When Doug uses dollars to record the revenue and costs at his Donut Shop, how is he using money?

Select one:

a. as a store of value

b. as a medium of exchange

c. as a means of payment

d. as a unit of account