Exam (elaborations)
Chapter 1 Economic Issues and Concepts (Ragan)
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Chapter 1 Economic Issues and Concepts (Ragan)
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13) The barter system of exchange is inefficient becauseA) "fair" values cannot be defined without the use of money.
B) bargaining power is unequal between rich and poor.
C) the double coincidence of wants may not exist.
D) markets do not exist.
E) exchange partners need to know each other.
Answer: C
Diff: 2
Topic: 1.2c. division of labour, specialization and trade
Skill: Applied
Learning Obj.: 1-3 Explain how specialization gives rise to the need for trade, and how trade is facilitated by money.
User2: Qualitative
14) Which of the point(s) below is (are) true of money?
1) Money eliminated the need for barter.
2) Money allowed for specialization of labour and expansion of trade.
3) Money facilitated the development of a market economy.
4) Trade did not take place before the introduction of money.
A) only 1.
B) only 1 and 2
C) Only 1 and 4
D) Only 1, 2, and 3.
E) All of the points are true.
Answer: D
Diff: 2
Topic: 1.2c. division of labour, specialization and trade
Skill: Recall
Learning Obj.: 1-3 Explain how specialization gives rise to the need for trade, and how trade is facilitated by money.
User2: Qualitative
15) Money facilitates trade and specialization by
A) allowing an efficient barter system to develop.
B) increasing the value of gold.
C) eliminating the need for barter.
D) reducing the shift of resources between uses.
E) providing employment for coin makers.
Answer: C
Diff: 1
Topic: 1.2c. division of labour, specialization and trade
Skill: Recall
Learning Obj.: 1-3 Explain how specialization gives rise to the need for trade, and how trade is facilitated by money.
User2: Qualitative
, 16) With reference to the circular flow of income, how is the allocation of resources largely decided?
A) by central authorities only
B) by central authorities and firms only
C) by firms and households acting independently
D) by political parties and firms only
E) by individuals only
Answer: C
Diff: 1
Topic: 1.2b. circular flow of income and expenditure
Skill: Recall
Learning Obj.: 1-4 Identify the economy's decision makers and see how their actions create a circular flow of income
and expenditure.
User2: Qualitative
17) The key decision makers in a market economy are
A) households, firms, and government.
B) individual citizens, non-profit organizations, and the Bank of Canada.
C) governments and all institutions under government control.
D) large corporations and labour organizations.
E) corporations and governments.
Answer: A
Diff: 1
Topic: 1.2b. circular flow of income and expenditure
Skill: Recall
Learning Obj.: 1-4 Identify the economy's decision makers and see how their actions create a circular flow of income
and expenditure.
User2: Qualitative
18) Economists usually assume that households and firms, respectively, maximize
A) income and sales.
B) savings and profits.
C) wages and revenues.
D) utility and profits.
E) expenditures and profits.
Answer: D
Diff: 2
Topic: 1.2b. circular flow of income and expenditure
Skill: Recall
Learning Obj.: 1-4 Identify the economy's decision makers and see how their actions create a circular flow of income
and expenditure.
User2: Qualitative
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