Unit 1 Fundamentals of Economics

Canada has a universal healthcare system, providing government-funded medical services to all citizens. However, the vibrant private sector helps to push an economy that is one of the world's most successful. Intense and frequent trade with the United States provides the country with great wealth.

These facts provide evidence that Canada has a

• mixed economy

• market economy

• traditional economy

• command economy

Juan realizes that if he studies an extra hour for his test, he will score five points higher. For each extra hour spent studying, he is getting one hour less sleep. When deciding whether to spend an additional hour studying or sleeping, Juan is engaged in what economic activity?

• bartering

• marginal analysis

• market transactions

• trade negotiations

In college, people can major in a wide variety of fields including medicine, journalism, business, and design among others. This is an example of the concept of

• scarcity

• specialization

• elastic demand

• progressive taxation

Which characteristic of the private sector BEST explains why a market economy is unable to reliably address environmental concerns and requires government regulation?

• profit motive

• obligation to shareholders

• independent management

• reliance upon commercial loans

Competition and free enterprise are most common in which type of economic system?

• market

• command

• planned

• traditional

What are governments MOST LIKELY attempting to do when they increase unemployment benefits, implement more welfare programs, and rearrange tax brackets?

• resolve market failures

• redistribute income

• invest in technology

• protect property rights

Investing heavily in new capital equipment and technology is MOST related to

• economic freedom

• supply and demand

• economic growth

• opportunity costs

Economics growth is often tied to investment in machinery, new technology, and education of the population. This is because

• the only way to measure economics growth is to observe changes in these factors

• investment in these items are the sole determinant of output

• all of these items improve capital

• these items lead to a greater productivity of inputs

When two people engage in trade, both sides will benefit if the trade meets which two requirements?

• voluntary and non-fraudulent

• non-voluntary and fraudulent

• free and international

• rational and marginal

In what way does specialization increase productivity?

• Specialization reduces scarcity

• Specialization reduces the costs of production

• Specialization increases the demand for a product

• Specialized workers are generally more highly educated