Microeconomics 14th Canadian Edition Test Bank

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ExamName___________________________________MULTIPLE CHOICE.Choose the one alternative that best completes the statement or answers the question.1)The economic concept that serves as the basis for the study of economics is:1)_______A)scarcity.B)inflation.C)unemployment.D)money.2)As a consequence of the condition of scarcity:2)_______A)there is always enough of everything.B)individuals and communities have to make choices among alternatives.C)production has to be centrally planned.D)things which are plentiful have relatively high prices.3)In every economic system, choices must be made because resources are:3)_______A)unlimited, but economic wants are limited.B)limited, and so are economic wants.C)finite, but economic wants are insatiable.D)infinite, but economic wants are finite.4)Opportunity cost is best defined as:4)_______A)the money cost of an economic decision.B)marginal cost minus marginal benefit.C)the value of the best foregone alternative.D)the time spent on an economic activity.5)Tammie makes $150 a day as a bank clerk. She takes off two days of work without payto fly to another city to attend the concert of her favourite music group. The cost oftransportation for the trip is $250. The cost of the concert ticket is $50. The opportunitycost of Tammie's trip to the concert is:5)_______A)$300B)$500C)$450D)$6006)When a provincial government chooses to build more roads, the required resources areno longer available for spending on public education. This dilemma illustrates theconcept of:6)_______A)full employment.B)opportunity cost.C)full production.D)marginal analysis.7)Specialization and trade are beneficial to society because:7)_______A)a division of labour lowers prices for products.B)the output of economic goods may be increased with no increase in resources.C)scarce resources are utilized more efficiently.D)all of the above are correct.8)When economists describe "a market," they mean:8)_______A)information networks that allow individuals to keep in touch with each other.B)a place where stocks and bonds are traded.C)a mechanism which coordinates actions of consumers and producers to establishequilibrium prices and quantities.D)a hypothetical place where the production of goods and services takes place.

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