Download CIC3E - Making Economic Choices Mid

CIC3E – Making Economic Choices
Mid-Term Exam
1. Under normal circumstances, when the price of a commodity falls, the quantity
demanded will _______________.
a.
b.
c.
d.
decrease
increase
remain unchanged
nobody knows
2. Initially, when you consume more and more of a commodity continuously, your
TOTAL satisfaction level will increase.
a. True
b. False
3. Since human wants are unlimited and available resources are limited, what will a
rational consumer do?
a.
b.
c.
d.
Renounce all wants and lead the life of a hermit
Satisfy the most urgent needs which can be met within his/her income levels
Be resigned to unhappiness
Be jealous of the neighbours
4. When a consumer goes to market to purchase a commodity, he or she will
purchase the __________ priced commodity, provided the commodities on offer are
identical in all other respects.
a.
b.
c.
d.
Highest
Say "eenie, meenie, miney, mo" to decide which to buy
Will toss a coin to determine which one to buy
Lowest
5. Suppose you eat cakes continuously. Then the satisfaction derived from eating the
tenth cake, as compared to satisfaction derived from eating the ninth cake will be
_______?
a.
b.
c.
d.
more
less
exactly same
you don't eat cakes at all
6. A business firm tries to maximise its ________ ?
a.
b.
c.
d.
profits
revenue
sales
job retrenchment
7. When the economic activity in an economy is on the decline, then it is called a
_______ ?
a.
b.
c.
d.
boom
recession
deflation
depression
8. What usually constitutes the main source of a government's income?
a.
b.
c.
d.
Loans
Taxes and levies
Profits from business undertakings
Grants from World Bank
9. Which of the following is a primary characteristic that helps to determine the type of
economy a country has?
a.
b.
c.
d.
How many consumers and producers are in the marketplace
How educated the citizens are in that country
Voter participation levels
The amount of government involvement in decision making.
10. Which of the following is NOT a direct result of competition?
a.
b.
c.
d.
Higher quality products
Government controlled prices
More choices
Lower prices
11. Which of the following is NOT a characteristic of a free market economy?
a.
b.
c.
d.
Consumer sovereignty
Individual choice
Competition
Government ownership of resources
12. Banks, savings and loans, credit unions, and brokerage houses are examples of
what?
a.
b.
c.
d.
Partnerships
Public goods and services
Corporations
Financial institutions
13. The United States has which type of economy?
a.
b.
c.
d.
Tradition
Mixed Market
Free Market
Command
14. Which of the following is NOT an example of consumption?
a.
b.
c.
d.
Sam buys and wears new sneakers
Jody pays a plumber to fix her drain
Annie drinks coffee at the local coffee shop
Kenny sells cookies at a bake sale
15. Which three groups participate in the economic circular flow?
a.
b.
c.
d.
labor, land, capital
individuals, businesses, government
legislative, executive, judicial branches
proprietorships, partnerships, corporations
.
16. A large increase in the number of fast-food restaurants in a community is most
likely to result in:
a.
b.
c.
d.
Lower prices and higher quality.
Lower prices and lower quality.
Higher prices and higher quality.
Don't Know
17. A person who starts a business to produce a new product in the marketplace is
known as:
a.
b.
c.
d.
A manager.
A bureaucrat.
An entrepreneur.
Don't Know.
18. An increase from 5% to 8% in the interest rates charged by banks would most
likely encourage:
a.
b.
c.
d.
Businesses to invest.
People to purchase housing.
People to save money.
Don't Know.
19. For most people, the largest portion of their personal income comes from:
a.
b.
c.
d.
Wages and salaries from their jobs.
Interest from stocks and bonds they own.
Rent paid to them from property they own.
Don't Know.
20. If the price of beef doubled and the price of poultry stayed the same, people
would most likely buy:
a.
b.
c.
d.
More poultry and less beef.
Less poultry and more beef.
The same amount of poultry and beef.
Don't Know.
21. If the Canada stopped importing automobiles from Country X, who would be most
likely to benefit?
a.
b.
c.
d.
Automobile manufacturers in Country X
Consumers in the United States
Automobile manufacturers in the Canada
Don't Know.
22. If your city government sets a maximum amount landlords can charge in rent,
what is the most likely result?
a. There will be more apartments available than people want to rent.
b. There will be fewer apartments available than people want to rent.
c. The number of apartments available will be equal to the number of
people that want to rent.
d. Don't Know.
23. In Canada, who determines what goods and services should be produced?
a.
b.
c.
d.
Producers and government
Consumers and government
Producers, consumers, and government
Don't Know.
24. Mexico grows fruits and vegetables and Argentina produces beef. If Mexico
voluntarily trades fruits and vegetables in exchange for Argentinean beef,
a.
b.
c.
d.
Both Mexico and Argentina benefit from the trade.
Both Mexico and Argentina lose from the trade.
Mexico benefits and Argentina loses from the trade.
Don't Know.
25. The manufacturers of XYZ winter sportswear have their manufacturing plants
running night and day, but they are unable to produce enough sportswear to satisfy
demand. If XYZ manufacturers cannot increase production and demand continues to
increase, the price of XYZ winter sportswear will:
a.
b.
c.
d.
Increase.
Decrease.
Stay the same.
Don't Know.
26. The resources used in the production of goods and services are limited, so
society must:
a.
b.
c.
d.
Make choices about how to use resources.
Try to obtain additional resources.
Reduce their use of resources.
All of the above.
27. The stock market is an example of an institution within our economy that exists to
help people achieve their economic goals. The existence of this institution:
a. Results in an increase in the price of stocks.
b. Brings people who want to buy stocks together with those who want to
sell stocks.
c. Helps predict stock earnings.
d. Don't Know.
28. When a person rents an apartment, who benefits from the transaction?
a.
b.
c.
d.
Only the person renting the apartment.
Only the landlord.
Both the person renting the apartment and the landlord.
Don't Know.
29. When deciding which of the two items to purchase, one should always:
a.
b.
c.
d.
Choose the item that costs less.
Choose the item with the greatest benefits.
Choose an item after comparing the costs and benefits of both items.
Don't Know.
30. When governments supply products and services, these products and services
usually benefit:
a.
b.
c.
d.
More than one person at a time whether they have paid for it or not.
Only the people who pay for these products and services.
Business at the expense of consumers.
Don't Know.
31. When the federal government's expenditures for a year are greater than its
revenue for that year, the difference is known as:
a.
b.
c.
d.
The national debt.
A budget deficit.
A budget surplus.
Don't Know.
32. Which of the following would be most likely to accelerate innovation in the
computer industry?
a.
b.
c.
d.
Placing a tax on all new inventions in the computer industry.
Increasing government regulation of the computer industry.
Investing in more research and development in the computer industry.
Don't Know.
33. Which one of the following statements about the function of money is wrong?
a.
b.
c.
d.
Money makes it easier to save.
Money makes trading goods and services easier.
Money holds its value well in times of inflation.
Don't Know.
Short Answer:
1. Expand upon the idea that Economics is a Social Science. (3)
2. Contrast needs and wants as it relates to making economic choices. (3)
3. In class, the benefits of Canada’s social programming was discussed as it related
to our mixed economy. Identify how this can also be a hindrance to our economy. (3)
4. First, briefly explain the three purchase methods listed below. Secondly, identify
the best option and explain why. (10)
a. Credit Card
b. Buy Now, Pay Later
c. Layaway
5. When creating a budget for yourself, why is it important to limit your budget to 90%
of your net income? (3)
6. Explain the Relationship between Supply and Demand as it relates to price. (5)
Multiple Choice
_____/ 33
Short Answer
_____/ 27
Total
_____/ 60