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ECON 208 Multiple Choice Questions || 100% CORRECT ANSWERS!!
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The fundamental problem of economics is, in short correct answers the scarcity of resources relative to wants. Scarcity is a problem that correct answers exists due to finite amounts of resources and unlimited human wants. Which of the following is not an example of a factor production? corre...

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  • August 19, 2024
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  • 2024/2025
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  • the fundamental problem of economics is in short

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  • ECON 208

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ECON 208 Multiple Choice Questions || 100% CORRECT
ANSWERS!!
The fundamental problem of economics is, in short correct answers the scarcity of resources
relative to wants.

Scarcity is a problem that correct answers exists due to finite amounts of resources and
unlimited human wants.

Which of the following is not an example of a factor production? correct answers a haircut.

Opportunity cost measures correct answers the amount of one good forfeited to obtain a unit
of another good.

If a DVD costs $20 and a videocassette costs $10, then the opportunity cost of five DVD's is
correct answers 10 videocassettes.

Assuming that the alternative is employment, the opportunity cost of a university education is
correct answers tuition costs plus book costs plus forgone salary.

A downward-sloping production possibilities boundary that is also a straight line implies
correct answers constant opportunity costs.

Which of the following causes an outward shift in the production possibilities boundary?
correct answers An increase in the productivity of all factors of production.

Putting currently unemployed resources to work can be illustrated by correct answers moving
from a point inside the boundary to a point on it.

One of the great insights of Adam Smith was that correct answers by acting in their own self-
interest, people produce a spontaneous economic order.

Which of the following is one of the main characteristics of a market economy? correct
answers Private property.

Broadly speaking, a major reason why a relatively efficient economic order arises in a market
economy is that correct answers prices to respond to overall conditions of scarcity or plenty.

In economics, the term market economy refers to correct answers a society where individuals
specialize in productive activities and enter voluntary trades.

In a barter economy, individuals correct answers trade goods directly for other goods.

The introduction of production lines where individuals specialize in performing specific tasks
is known as correct answers the division of labour.

Economic theory assumes that individuals correct answers make choices to maximize their
utility.

,A central assumption in economic theory regarding firms is that they correct answers seek to
maximize profits.

Individual consumers maximize their well-being by correct answers buying more of a good
for which the marginal benefit exceeds the marginal cost.

The two major types of markets in the circular flow of income are correct answers markets
for goods and markets for services.

The circular flow of income and expenditure shows the flow of correct answers payments for
goods and services from consumers to firms.

The use of money when buying and selling correct answers makes exchange easier.

Specialization of labour leads to a more efficient allocation of resources because of correct
answers the principle of comparative advantage.

The market in which an individual sells labour services is called correct answers a factor
market.

A major cause of the recent move toward globalization is correct answers a big reduction in
the costs of transportation and information.

The process of globalization tends to correct answers create greater similarity of consumer
tastes among countries.

Which of the following would be a source of similarity among alternative types of economic
systems? correct answers The need to determine what is to be produced and how to produce
it.

In the Canadian economy, the majority of decisions on resource allocation are made by
correct answers consumers and firms through the price system.

Complex economic plans for many sectors of the economy are most associated with correct
answers a command economy.

There is general agreement among economists that government intervention in modern
market economies correct answers is appropriate when private markets create externalities
and fail to produce public goods.

Normative statements correct answers concern an individual's beliefs about what ought to be,
are based on value judgements, cannot be subjected to empirical scrutiny, and cannot be
deduced from positive statements.

"Capital punishment deters crime" is an example of correct answers a positive statement.

"Capital punishment should be reintroduced in Canada" is an example of correct answers a
normative statement.

, Which of the following is probably the main reason why economists are often seen to
disagree in public discussion? correct answers Different economists make different value
judgements.

If the assumptions imposed in an economic theory are unrealistic, then the theory correct
answers may nonetheless predict than any alternative theory.

The role of assumptions in theory is NOT to correct answers represent the world accurately,
improve understanding of a complex world by reasonably abstracting from reality, avoid
simplifications of the real world, or ensure that the theory considers all features of reality, no
matter how minor.

A theory would not contain correct answers a normative statement expressed as a functional
relation.

Direction of causation refers to correct answers the effect of an exogenous variable on an
endogenous variable and the effect of a variable determined outside the theory on the value of
a variable determined within the theory.

The statement that the quantity produced of a commodity is positively related to its price is
correct answers a testable hypothesis.

Statistical analysis in economics correct answers must use techniques that take account of
simultaneous changes in many variables.

Economic predictions are intended to correct answers forecast the behaviour of groups of
individuals.

The theory that extraterrestrials exist and visit Earth in flying saucers correct answers has not
been scientifically proved, but can't be disproved.

If a particular index number in 2013 is 159 and the base year is 2010, the the index shows an
increase of correct answers 59 percent between 2010 and 2013.

Index numbers are useful because correct answers identifying trends is easier using relative
rather than absolute numbers, each component can be weighted to reflect its relative
importance, and they can all be given the same value in the base year.

Last year's crime rates for all Canadian cities correct answers is an example of cross-sectional
data.

Observations drawn repeatedly from successive months are correct answers time-series data.

A scatter diagram can be used to plot correct answers either cross-sectional or time-series
data.

The slope of a straight line is correct answers constant.

Suppose that economic analysis estimates the following relationship between imports (IM)
and national income (Y): IM = 100 + 0.15Y. This means that correct answers other things

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