"Just stop when you've got as deep as you care to go."

Really, I don't think saying "it's trivial" is such a big ordeal for students. In maths at least, they'll quickly learn to get over it. I think in the beginning I was surprised a couple of times. Then I thought about it, and then after a while I realized it is trivial. It is also a pointer for the students so they can see "I should know this".

As for passing students from first term to second term - I am not sure if I care. Why not let students enter any course they wish?