QUESTION 1 Community surplus is maximized (i.e. Pareto optimality is achieved) when:

A.a market is imperfectly competitive (e.g. a monopoly).

B.a market is in equilibrium.

C.the producer surplus is greater than the consumer surplus.

D.a price floor is established.

QUESTION 2 With regards to macroeconomic growth, the most common goal is to achieve:

A. high unemployment

B. a fast and significant increase in GDP in a short amount of time.

C. an increase in GDP without consideration for negative externalities.

D. a gradual/progressive increase in GDP.

QUESTION 3 Real GDP is a useful measurement because:

A. it helps us to track actual variations in economic activity/production from year to year regardless of changes to average prices.

B. it accounts for depreciation.

C. it shows us the real difference between the domestic economy and foreign economies.

D. it provides us with an accurate picture of a country's standard of living.

QUESTION 4 All of the following represent problems with measuring economic growth except:

A. the existence of black markets.

B. models informed by data can help with policy-making.

C. human error.

D. externalities.

QUESTION 5 Economic development is typically intended to:

A. increase a country's GDP.

B. ignore poverty.

C. empower a country's population.

D. simply accept that income inequality is unavoidable.

QUESTION 6 All of the following are ways in which economic expansion (i.e. a shifting out of AD) will most likely occur except for:

A. the upwards surge in the stock market.

B. a nationwide tax cut.

C. an increase in consumer and business confidence.

D. a raising of interest rates.

QUESTION 7 The main determinant of Aggregate Supply is:

A. government spending.

B. consumption.

C. nationwide production costs.

D. unemployment.

QUESTION 8 With regards to market failures, public goods are unlikely to be provided in a free market economy because:

A. they are rivalrous and excludable.

B. no one demands them.

C. of a lack of profit incentive from consumers unwilling to pay for them.

D. they are always too expensive.