Test Bank and Solutions For Principles of Macroeconomics 8th Canadian Edition By N. Gregory Mankiw PDF

Preview

Summary

Solutions Manual, Test Bank, eBook For Principles of Macroeconomics 8th Canadian Edition By N. Gregory Mankiw, Ronald D. Kneebone, Kenneth J McKenzie ; 9780176917586 , 0176917586 + MINDTAP assignments and APLIA Quizzes Available....

Description

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce Indicatewhetherthestatementistrueorfalse. 1. Marketfailurereferstoasituationinwhichthemarketdoesnotallocateresourcesefficiently. a. True b. False a. True b. False 2. Tradeallowseachpersontospecializeintheactivitiesheorshedoesbest,thusincreasingeachindividual’s productivity. a. True b. False a. True b. False 3. Tuitionisthesingle-largestcostofattendingcollegeformoststudents. a. True b. False a. True b. False 4. Amarketeconomycannotproduceasociallydesirableoutcomebecauseindividualsaremotivatedbytheirown selfishinterests. a. True b. False a. True b. False 5. IftheaveragecostoftransportingapassengeronthebusfromPeterboroughtoTorontois$35,itwouldbe irrationalfortherailroadtoallowanypassengertorideforlessthan$35. a. True b. False a. True b. False 6. Becausetaxesaffectonlythepricepaidbythebuyer,theycannothaveanadverseimpactontheallocationof society’sresources. a. True b. False a. True b. False 7. Governmentspendingistheprimarysourceofinflation. a. True b. False a. True b. False Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 1

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 8.Equityreferstohowthepieisdivided,andefficiencyreferstothesizeoftheeconomicpie. a.True b.False a.True b.False 9.Inflationdecreasesthevalueofmoney. a.True b.False a.True b.False 10.Amarginalchangeisasmallincrementaladjustmenttoanexistingplanofaction. a.True b.False a.True b.False 11.Withcarefulplanning,wecanusuallygetsomethingthatwelikewithouthavingtogiveupsomethingelsethat welike. a.True b.False a.True b.False 12.Productivityisdefinedasthequantityofgoodsandservicesproducedfromeachhourofaworker’stime. a.True b.False a.True b.False 13.Economicsisthestudyofhowfairlygoodsandservicesaredistributedwithinsociety. a.True b.False a.True b.False 14.Thegovernmentcanpotentiallyimprovemarketoutcomesifmarketinequalitiesormarketfailureexist. a.True b.False a.True b.False

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 2

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 15.Tradewithanynationcanbemutuallybeneficial. a.True b.False a.True b.False 16.Productivityistheprimarydeterminantofacountry’slivingstandards. a.True b.False a.True b.False 17.Thecostofanactionismeasuredintermsofforegoneopportunities. a.True b.False a.True b.False 18.Equitymeanseveryoneintheeconomyshouldreceiveanequalshareofthegoodsandservicesproduced. a.True b.False a.True b.False 19.Scarcitymeansthatthereislessofagoodorresourceavailablethanpeoplewishtohave. a.True b.False a.True b.False 20.Thetenthprincipleofeconomicsshowstheshort-runtradeoffbetweeninflationandeconomicgrowth. a.True b.False a.True b.False 21.Arationaldecisionmakertakesanactionifandonlyifthemarginalcostexceedsthemarginalbenefit. a.True b.False a.True b.False Indicatetheanswerchoicethatbestcompletesthestatementoranswersthequestion. 22.Howdopeoplemakedecisionsatthemargin? a.byfollowingthebusinesscycle b.byexperience c.bycalculatingdollarcosts d.bycomparingcostsandbenefits Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 3

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 23.SupposethattheaverageincomeofanEgyptianishigherthantheaverageincomeofaNamibian.Whatmight youconclude? a.NamibiafirmsarefacedwithstrictergovernmentregulationsthanEgyptianfirms. b.TotalincomeisdividedamongfewerworkersinEgyptsinceithasasmallerlabourforcethanNamibia. c.Egypt’sclimateallowsforlongergrowingseasonsandthereforeEgyptcanproducelargequantitiesof grain. d.ProductivityinEgyptishigherthaninNamibia. 24.Whenisagoodconsideredscarceinasociety? a.whenmoreoutputofthegoodispossible b.wheneveryoneinthatsocietycannothavealltheywantofthegood c.whenthegovernmentrestrictsproductionofthegood d.whenonlytherichestpeopleintheeconomycanbuyalltheywantofthegood 25.Whatisthebestexampleofamarginalchange? a.Aftergraduatingfromuniversity,Makena’sincomeincreasesfrom$1000permonthto$5000permonth. b.In2018minimumwageinSaskatchewanincreasedfrom$11.4|0perhourto$14.00. c.Housingpricesinanareaincreasedby20%whenanewhighwayconnectedasmallcitytothe provincialcapital. d.AhardfreezewipesouthalfofthegrapecropinOntarioandthepriceofOntariowinedoubles. 26.Yourprofessorlovesherworkteachingeconomics.Shehasbeenofferedotherpositionsinthecorporateworld making25percentmorebuthasdecidedtostayinteaching.Whatmightchangeherdecision? a.ifthemarginalcostofteachingincreased b.ifthemarginalbenefitofteachingincreased c.ifthemarginalcostofteachingdecreased d.ifthemarginalcostofacorporatejobincreased 27.WhatdoestradeNOTachieve? a.increasedcompetition c.somegainsforbothcountriesinvolved

b.equalgainsforbothcountriesinvolved d.greaterproductionefficiency

28.Ifeducationproducesexternalbenefitsforsociety,whatmightNOTbeanappropriatepolicyforsocietyto establishregardingeducation? a.taxincentivesforschooling b.mandatoryminimumlevelsofeducation c.programsthatpromotethehiringofhighschooldropouts d.freebussingtolocalhighschools 29.Whichofthefollowingisanexampleofafirmwithmarketpower? a.acoffeeshopinHalifax b.ahotdogvendorinVancouver c.Canada’sWonderlandthemeparkinToronto d.anelementaryschoolinSt.Johns Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 4

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 30.WhatwasinflationinCanadainthe1990s? a.Itwasalmostzero. b.Itwasabout2percentperyear. c.Itwasapproachingdoubledigits. d.Itwasabout10percentperyear. 31.TheStudents’Uniononcampusprovidesfreepopcorntoallstudentswhoattendtheirannualmeeting.Inthis instance,howwilltheprincipleofscarcityapply? a.Itwillonlyapplytostudentswhomissclasstoattend. b.Itwillapplyintermsofthetimegivenuptoattend. c.Itwillnotapplybecausethepopcornisfree. d.Itwillnotapplybecausenotradeoffsareinvolved. 32.Russellhasspent$10,000purchasingandrepairingaLandRoverDefender,whichheexpectstosellfor $14,000.Hediscoversthatheneedsanadditionalrepair,whichwillcost$4400.HecanselltheLandRover Defenderasitisnowfor$3600.Whatshouldhedo? a.Heshouldtakethe$3600. b.Heshouldneversellsomethingforlessthanitcost. c.HeshouldcompletetherepairsandselltheLandRoverDefender. d.Itdoesn’tmatterwhichactionhetakes;theoutcomeisthesameeitherway. 33.Whichbusinessmostlikelyhasmarketpower? a.afurniturestoreinKingston b.avineyardintheOkanaganValley c.amaplesugarcandystoreinSherbrooke,Quebec d.ahockeyarenainthesmalltownofInvermere,BritishColumbia 34.Whichoftheseconsumptionactivitieswillmostlikelyimposeanexternalcost? a.anexecutiveplaysavigorousgameofgolf b.astudentinadormplaysaYouTubevideoat120decibelslateatnight c.ayoungmotherexercisestoayogavideo d.aconstructionworkereatsasandwichduringhislunchbreak 35.InthenationofDictatorland,farmerstraditionallyfeedgraintotheirlivestock.Centralplanners,however, decidedtoincreasethepriceofgraintomakegrainfarmershappyandtoreducethepriceofbreadmadefrom thatgraintomakecitydwellershappy.Nowthepriceofbreadislowerthanthepriceofgrain.Whatmightwe nowexpect? a.farmerstocontinuetofeedgraintotheirlivestock b.farmerstostartfeedingbreadtotheirlivestock c.citydwellerstostartbuyinggraintomakebreadtoeat d.citydwellerstostartbuyinggraintomakebreadtosell

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 5

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 36.Georgereceives$50asabirthdaygift.Indecidinghowtospendthemoney,henarrowshisoptionsdownto fourchoices:A,B,C,andD.Eachoptioncosts$50,butGeorgevalueseachoptiondifferently.Finally,he decidesonC.WhatistheopportunitycostofC? a.$50 b.$100 c.thevaluetohimofoptionsA,B,andDcombined d.thevaluetohimoftheoptionhewouldhavechosenifCwasnotavailable 37.Whydotaxesadverselyaffecttheallocationofresourcesinsociety? a.becausetheydonotalwaysfallmoreheavilyontherich b.becausethetaxescollectedarenotenoughtofinancegovernmentspending c.becausenoteveryonepaystaxes d.becausetheydistortpricesandthusthedecisionsofhouseholdsandfirms 38.AtypicalworkerinFrancecanproduce48unitsofproductinaneight-hourday,whereatypicalworkerin Romaniaproduces50unitsofproductina10-hourday.Whatcanweconclude? a.WorkerproductivityinRomaniaishigherthaninFrance. b.ThestandardoflivingwillbehigherinFrancethaninRomania. c.ProductivityfortheRomanianworkerissixunitsperhourandfiveunitsperhourfortheFrenchworker. d.TherewillbenodifferencebetweenthestandardoflivinginFranceandRomania. 39.Whatisanexternality? a.theimpactofoneperson’sactionsonthewell-beingofabystander b.theimpactofaperson’sactionsonthatperson’swell-being c.theimpactofsociety’sdecisionsonthewell-beingofanothersociety d.theimpactofsociety’sdecisionsonthewell-beingofonepersoninthesociety 40.Aimeedecidestospendthelasttwohoursofthenightbeforehereconomicsexamstudyinginsteadofsleeping ForAimee,whatwouldhertradeoffbe? a.nothing,becausenodollarvaluecanbeputonsleep b.nothing,becausestudyingwouldbemorebeneficialthansleep c.thesixhoursofsleepshecouldhavehadifshehadgonetobedbeforemidnight d.thetwohoursofrestshewouldhavegotten 41.Whatistheincomeofatypicalworkerinacountrymostcloselylinkedto? a.population b.productivity c.thenumberoflabourunions

d.governmentpolicies

42.Toincreaselivingstandards,whatshouldpublicpolicydo? a.ensurethatworkersarewelleducatedandhavethenecessarytoolsandtechnology b.makeunemploymentbenefitseasiertoobtain c.moveworkersintojobsdirectlyfromhighschool d.ensurethatworkershaveaccesstounionmembershipandbenefits

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 6

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 43.Whatdoesthesaying“Thereisnosuchthingasafreelunch”mean? a.Evenpeopleonwelfarehavetopayforfood. b.Thecostoflivingisalwaysincreasing. c.Togetsomethingwelike,weusuallyhavetogiveupanotherthingwelike. d.Allcostsareincludedinthepriceofaproduct. 44.Whatistheprimarydeterminantofacountry’sstandardofliving? a.theabilitytoreduceforeigncompetition b.theabilitytoproducegoodsandservices c.thetotalsupplyofmoneyintheeconomy d.theaverageageofthecountry’slabourforce 45.WhatdoesNOTresultwhenseatbeltlawsalteradriver’scost–benefitcalculation? a.Fewerdriversarekilled. b.Morepedestriansarekilled. c.Driversdrivefaster. d.Moreaccidentsoccur. 46.Whatistheeffectofanincreaseinthemoneysupplyintheeconomy? a.Itincreasesunemploymentintheshortrun. b.Itincreasesinflationinthelongrun. c.Itincreasesinflationintheshortrun. d.Itincreasesunemploymentinthelongrun. 47.Overthepastcentury,howmuchhastheaverageincomeinCanadarisenby? a.twofold b.fivefold c.eightfold

d.tenfold

48.Inamarketeconomy,whatdopricesreflect? a.thepopularityofagoodinsociety b.thecosttosocietyofmakingthegood c.thequantitysocietywillultimatelychoosetoproduce d.thelevelofwealthinsociety 49.Toimprovelivingstandards,whatshouldpolicymakersdo? a.imposerestrictiononforeigncompetition b.formulatepoliciesdesignedtoincreaseproductivity c.imposetougherimmigrationpolicies d.providesubsidizedchildcaretolow-incomefamilies 50.Whichtermreferstoasingleentitythathastheabilitytoinfluencemarketprices? a.competition b.marketpower c.efficiency d.productivity

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 7

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 51.Fromwhichofthefollowingistheword“economy”derived? a.onewhoconsumesgoods b.onewhomanagesahousehold c.onewhoparticipatesinamarket

d.onewhogovernsacountry

52.Afriendofyoursasksyouwhymarketpricesarebetterthangovernment-determinedprices.Whatdoyousay? a.Becausetheygenerallyreflectthevalueofagoodtosociety,butnotthecostofmakingit. b.Becausetheygenerallyreflectthecosttosocietyofmakingagood,butnotitsvalue. c.Becausetheygenerallyreflectboththevalueofagoodtosocietyandthecostofmakingit. d.Becausetheygenerallyreflectneitherthevalueofagoodtosocietynorthecostofmakingit. 53.Whathappenswhenthegovernmentpreventspricesfromadjustingnaturallytosupplyanddemand? a.Itstabilizestheeconomybyreducingmarketuncertainties. b.Itadverselyaffectstheallocationofresources. c.Thereisanimprovementinequitythatjustifiesthereductioninefficiency. d.Thereisanimprovementinefficiencythatjustifiesthereductioninequity. 54.Whatwouldhappeniftheworld’sresourcesweretosuddenlydouble? a.Thescarcityprinciplewouldstillapply. b.Thescarcityprinciplewouldnotberelevant. c.Everyone’swantswouldbemet. d.Notradeoffswouldbeneeded. 55.IntheformerSovietUnion,producerswerepaidformeetingoutputtargets,notforsellingproducts.Under thosecircumstances,whatweretheeconomicincentivesforproducers? a.toproducegoodqualityproductswhichlastlongersooutputtargetscanbereduced b.toconserveoncosts,soastomaintainefficiencyintheeconomy c.toproduceenoughtomeettheoutputtarget,withoutregardforqualityorcost d.toproducethoseproductsthatsocietydesiresmost 56.Whatdoeseconomicsstudy? a.finance b.howsocietymanagesitsscarceresources c.centralplanning d.governmentregulation 57.Inwhichsituationwouldeconomistsusethewordequity? a.Eachmemberofsocietyhasthesameincome. b.Societyisgettingthemostitcanfromitsscarceresources. c.Thoseinsocietywhohavetheleastwillreceivethemost. d.Thebenefitsofsociety’sresourcesaredistributedfairlyamongsociety’smembers. 58.AccordingtoAdamSmith,whatisthesuccessofdecentralizedmarketeconomiesprimarilydueto? a.thebasicbenevolenceofsociety b.society’sjustice(legal)system c.individuals’self-interest

d.basichumansurvivalinstincts

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 8

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 59.Whatisonecomponentnecessaryformarketstowork? a.governmentintervention b.anon-profitsectorofsociety c.propertyrights

d.abundantresources

60.Whichsituationbestillustratesamarginalchange? a.Nancyretiresandtakesapart-timejob.Shewasworking40hoursperweek,butnowworks10hours perweek. b.ProvincialUniversityhasannouncedthatduetoprovincialbudgetdeficits,tuitionmustriseby25%next year. c.AdammovedfromEdmontontoTorontoandnowpays40%moreforrentthanbefore. d.Banff,whichusuallyreceives600cmofsnowperyear,received620cmlastyear. 61.Whatdoweknowaboutcollege-ageathleteswhodropoutofcollegetoplayprofessionalsports? a.Theyarenotrationaldecisionmakers. b.Theyarewellawarethattheiropportunitycostofattendingcollegeisveryhigh. c.Theyareconcernedmoreaboutpresentcircumstancesthantheirfuture. d.Theyunderestimatethevalueofacollegeeducation. 62.Stanbuysa1966Mustang,whichheplanstorestoreandsell.Heanticipatesthatthecostofthecarandthe repairswillbe$15,000andthathecansellitfor$19,000.Whenhehasspent$15,000,hediscoversheneedsto replacetheengine,whichwillcost$4000.Hecansellthecarwithoutthenewenginefor$9000.Whatshould Stando? a.Heshouldcompletetherepairsandsellthecarfor$13,000. b.Heshouldsellthecarnowfor$9000. c.Heshouldnevertrysuchanexpensiveprojectagain. d.Heshouldbetotallyindifferentbetweenfinishingtheprojectandsellingthecarnow. 63.Whatistheopportunitycostofgoingtouniversity? a.thetotalspentonfood,clothing,books,transportation,tuition,lodging,andotherexpenses b.thevalueofthebestopportunityastudentgivesuptoattenduniversity c.zero,forstudentswhoarefortunateenoughtoattendonascholarship d.zero,becauseacollegeeducationwillallowastudenttoearnalargerincomeaftergraduation 64.Havecountdownsignalsatcrosswalksmadepeoplesafer? a.yes,becausedrivers’attentionisnowmorefocusedonthecrosswalksandtheyaremoreawareof peoplecrossingtheroad b.yes,becauseeveryoneisbetterinformedofthechanginglights c.no,becausepeoplearebeingmoreaggressivewiththeadditionalinformation d.no,becausedriversmusttakemoretimeprocessingtheinformationandarenotfocusingondriving

Copyright Cengage Learning. Powered by Cognero.

For Full Chapters : [email protected]

Page 9

For All Chapters --> [email protected] Name:

Class:

Date:

Chap01_8ce 65.Whendoesscarcityexist? a.whenthereislessthananinfiniteamountofaresourceorgood b.whensocietycanmeetthewantsofeveryindividual c.whenthereislessofagoodorresourceavailablethanpeoplewishtohave d.whenthegovernmentfailstoproducegoods 66.In2018,whatwastheaverageCanadianincome? a.$30,000 b.$50,000 c.$70,000

d.$90,000

67.Whatdoeseconomicsstudy? a.howsocietymanagesitsscarceresources b.thegovernment’sroleinsociety c.howtoincreaseproduction d.howfirmsmakeprofits 68.Whatisamarginalchange? a.along-termtrend b.alarge,significantadjustm...